by Tony Vidler
Here’s a wild thought for financial services providers: maybe you should stop selling service. Sell your products by all means. Sell advice and the different outcomes it can create. Sell time…but maybe stop selling service.
Professionals sell time and knowledge primarily, but with many financial advisers finding they are unable or unwilling to sell units of time or price based upon their knowledge or expertise, and also being less comfortable with getting paid from product placement, they are resorting to selling “service”.
In fact the concept of being obliged to provide ongoing “service” has become so entrenched that even regulators seem to hold a view that an initial engagement with a consumer creates an obligation of ongoing service on the part of the financial adviser. So the “service” of providing ongoing advice, or at least the availability of ongoing advice, becomes part of the initial “sale”.
Now there is nothing wrong with selling service – I am all for it. But think about separating the ongoing service from the initial engagement, or advice component. Apart from the good commercial reasons for doing so (pricing appropriately and practice profitability!), it also improves your chances of creating satisfied clients. The reason for that is it is difficult for clients to appreciate and value something they are yet to experience. We promise an ongoing service…
In order to convince clients that our service is indeed valuable and worth paying ongoing retainers or annual fees we create expectations – or promises – of the additional value we will provide over and above the value already delivered and paid for. That creates an additional and even bigger problem for financial advice firms as there is a continual mismatch between service level expectations and our ability to change our business offering.
In general terms consumers expectations of speed of service are shifting faster than we can deliver professional services. Influenced by social media and the speed of interaction that it encourages, together with gadgets with ever increasing processing speed and memory and functionality, and a strong shift to businesses being available 24/7 and we are faced with exponentially increasing customer service expectations. Everyone has been trained by Google to expect answers and options in seconds, right? Everyone has been repeatedly coached to believe that the customer is king and can have anything in whatever flavour/colour/price point they want.
That’s a problem in professional services generally.
Even if we continue to deliver our ongoing services precisely as promised originally, and there is no deterioration of service delivery on our part, there is a continual widening of the gap. Increasing expectations result in the perceptions of our service as being inadequate – even though it is exactly what was promised.
This is further exacerbated by the consumers definition of “service” being constantly subject to change. Service historically meant being able to provide specialised knowledge on demand (which they now pretty much have on the phones). Or it was competing on convenience (we’ll drive to you in the evening and meet in your home), or filtering market choice to determine appropriate product selection, such as in investment advisory or insurance broking fields. There are now apps and online services that fulfil these functions far more quickly, affordably and efficiently. The key point of course is that what was considered “good service” 15 years ago is not what was considered good service 10 years ago or 5 years ago.
I am by no means certain that I know what the solution is to this selling service dilemma, as I can only see the gap widening further as the world gets faster with its proliferation of apps, boutique services, crowd-sourced labour solutions and breaking down of knowledge silo’s.
I am convinced though that trying to compete on “service” differentiation will be a significant challenge for professional services firms. Not impossible by any means, especially in tight niches or with high net worth and more discerning clients, but it will be difficult with the general consumer population or for the holistic planner or adviser. At the very least it suggests that for any financial adviser there needs to be a very clear definition of what services are being delivered for an ongoing client, and it makes sense to manage client expectations in that respect right at the outset. Any other course of action will create disappointment in time.
The one area which seems to continually standout as an opportunity for human beings who provide professional services for their livelihood to excel in this fast-changing environment is to be great human beings that others want to be involved with. Technical competency matters of course, as does having a business structure which can cater to the functional needs of the client – like handle their transactions and communicate with them continually. But it is the individual human with all the faults, foibles, fun and familiarity that another human is attracted to sticking around with for a while. Everything else in our world today is becoming pretty much disposable isn’t it?
Relationships are what gets held onto.
I suspect that rather than focussing on trying to manage consumers expectations of how wonderful our future service will be, and why they should pay a premium for that, professionals will be better served by investing more time in developing tighter and better personal relationships with clients. Becoming a person who is part of their tribe, their trusted circle, will be more valuable than written reports with pie charts delivered quarterly. Sinmply obtaining access…time and atttention….IS the service.
It is unlikely however that a client will pay you a hefty fee just to be their friend – especially not before they know whether they want you as one of their friends. So charging a friendship fee in advance is not really what I am proposing.
However I have a few professional colleagues who are superb at keeping in touch with me, and it is very much a mix of social and professional – we enjoy each others company, although don’t live in each others life every weekend either. But every 10-12 weeks we seem to catch up for a glass of something or a game of golf or a football game. We know about each others families and interests, and we laugh at each other and talk about lots of things other than business.
I also happen to value them and their knowledge and I pay them fees for advice. And I find myself doing it several times per year at least.
BECAUSE I know them well and like them and trust them, and BECAUSE they are part of my tribe, and BECAUSE they work at making sure we have developed relationships that extend beyond mere professional positioning, I give them business. I am also mighty hard to shake away it must be said….they would have to do something wrong, rather than someone else promise to do something right, in order for me to move on from those professional relationships.
Actually, I don’t care whether they are “the best” in their field either if I am honest. I care that they are very good at what they do. I care that they understand me and how I work – and that they can fit in with that. I care that they are fair with me. But mostly, I care that they care, and I care that they “are there”.
Relationships matter a lot more than their service promise, and I don’t judge them or decide to retain their counsel on the basis of the firm’s customer service process.
Developing relationships to that level is far more promising in the evolving world we have than building a better service promise I suspect.