Some customers you don’t want
Financial Advice & Practice Management & Sales & Marketing for Professional Services & Strategic Issues

Some customers you don't want

August 22, 2022

by Tony Vidler  CFP logo   CLU logo  ChFC logo

clients-you-don't-wantSome customers you just don’t want, because not all customers are good customers for us.  Even some of those who look like they commercially viable customers we just don’t want. 


There are some who can use our help..want our help…but that doesn’t mean they are good clients for us.  Most of us would agree that we should contribute to the greater good of society, and engage in pro bono work to help some of those who can’t afford us, but we are ARE running commercial enterprises and need to think about who we take on as ongoing clients.

Broadly speaking there are two groups of potential clients:

1. Transactional focus

2.  Relationship based

The engagement, or “sales”, process is quite different for each group.  The value sought by each is quite different.  The value they bring is quite different too…


Traditionally most advisers have been trained to deal with the transactional customer which is hardly surprising given that most of today’s advisers were trained by product manufacturers in the past whose sole concern really was selling products.  Surprise, surprise; they trained advisers to sell products. The modern professional has shifted, or is in the process of shifting, to selling their expertise and time rather than products.  While there are often product solutions involved they are not at the centre of the advisers’ value to the customer, but are an outcome of the advice process.


The customers with a transactional focus are pretty much focused on short term decision making.  They are essentially driven by price, or immediately perceived value for the price they have to pay, or perhaps convenience.  In the absence of exceptional value in relation to other potential suppliers of advice or product solutions, they will focus on price alone.


Their greatest concern is not paying more than they think they should right now.  As such, they will compare potential suppliers, or advisers.  They will haggle and express dissatisfaction at ANY price in a bid to get the best price-value they can.  They will question every recommendation, conduct their own research, ignore the commercial value supplied to them in time and effort by advisers, and be swift to complain of any perceived shortcomings.  In short; they see the adviser as just another retailer.


Why would you deal with them if you are a professional adviser?  The very thing that differentiates you and adds value lies within your expertise and skills.  The core adviser value is not in the products you happen to suggest at any given time – and it is certainly not in the price of those products (which you cannot control much of the time in reality anyway).  And any customer who comes to you because you happened to have the best price at a moment in time will leave when they find a better price.


You are renting business from them. Not gaining a client, and not gaining serious long term value for your practice.


The customer with a relationship focus may not articulate their needs in this way – they don’t go around saying that they are looking for an adviser they can have a relationship with.  They do however understand that today’s advice or product solution is simply a step in a much longer or larger process for them.  That is, they anticipate needing ongoing advice, service or solutions.  As such, their greatest fear is making a wrong choice.  What they are essentially looking for is guidance and help.  That is quite a different motivator and underlying need that must be addressed and resolved.


The type of prospect, or customer, that you attract from your marketing efforts will primarily be driven by how you try to appeal to the market.

 Those with an emphasis upon product as their core offering will naturally attract transactional customers – with all the haggling, stress and tyre-kicking that comes with that.  Advisers tend to do this when the focus of their marketing and advice process is on that non-consumer-friendly process of “selling & closing”.  They have built a transactional business.

Those who focus their marketing and positioning on engagement and building trust with customers will attract those who value the ability to help them avoid making wrong choices.  They are the ones whom you can have a much longer and more valuable business relationship with.


In the group of customers that seek relationship-based advice, there is significant lifetime customer value for the the adviser business.  Those who seek transactional solutions focused on price are not really the clients for individual advisers of the future.  They will be the customers of the institutions or online offerings where financial services are commoditised and not overly personalised. The focus is upon product solutions being delivered at the cheapest price possible.


It is possible of course to build offerings for both within a practice.  There is no reason why a practice cannot emulate the transactional processes for a proportion of the market who want it, if the practice decides that it wishes to do so.  Simultaneously the practice can be delivering value-added advice services to a different set of customers.  Doing this successfully requires that a practice understands it is dealing with 2 different types of customers and building two different delivery and service systems though.



If you want to run a production line which process a serious volume of transactions based around product sales, then there is undoubtedly a good business to be built.  But if you are doing that you can’t afford to waste time and resources dealing with relationship-focussed customers.  You don’t want them really, as the cost of servicing them kills the profit margin when the business was designed to move product as efficiently and profitably as possible.



If you want an advisory business which focusses upon helping people over the medium to long term in achieving their goals, then you cannot afford to deliver high touch service to transactional customers.  



It is critical to understand what sort of business you want to be running, because regardless as to whether it is transactional or relationship-focused, there will be some customers you don’t want.


You might also be interested in this related article:
Make Your Marketing A Money Machine
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