Success formula for IFAs: R=V+S

How do you compete in a market where the product you sell (mutual fund) is the same as what hundreds and thousands of other sellers are offering in your city, where the product is also available online and is also being sold directly by manufacturers cheaper? Yes, we know that service and advice quality are the differentiators – but a prospective client has not yet gained from your advice and has not yet seen your ongoing service. What then can be the success formula for IFAs to stand out in a crowded field and win new clients?

Boost the ability to compete

Responsiveness is one of the keys that helps businesses win in competitive markets. Even for big business giants like IBM, responsiveness can be a challenge. In 2013, a Wall Street Journal article reported on about how responsiveness was seen as a major concern by CEO Virgina Rometty as poor responsiveness was sapping their ability to compete.

In an internal video to employees, Rometty decried the absence of a sense of urgency among IBM employees in responding to prospects and customers and that the company had been guilty of not being sufficiently proactive in engaging with prospects and customers, to get them the information they need and to answer their questions. In response to customer complaints and dissatisfaction, Rometty unleashed a new rule where employees were asked to respond to customer's questions or concerns within 24 hours.

So what exactly is responsiveness? Value and speed are the two components that form responsiveness and if one of these elements is below par, then responsiveness can be seen as poor. In sales terms, it is defined this way:

Responsiveness = Value + Speed (R=V+S).

Advisors may be providing a valuable service to their clients but how fast are they responding? Given the busy schedules of people nowadays, time is of the essence for everyone. However, do you consider the time of your prospects and customers as important and something you can reduce? If the time customers invest in paperwork formalities to be completed is shorter, would that increase their rating of your service? Consider the perspective from the customer's point of view. How long do they have to wait to get access to your service?

With focus on the pipeline, many advisors are quick to respond to inquiries but what is the value they are providing? Within responsiveness, value is determined as the information that a prospect can use to move forward in their buying process. Advisors may be quick to respond to a client's email but is the information they are providing adequate? Or do clients have to engage with a long email chain with your firm in order to get the value they need? In the absence of value, speed is not a virtue in sales.

Most of us are accustomed to poor responsiveness. Therefore, many advisors fail to recognize how essential responsiveness is to their efforts to build trust and credibility with prospects. Responsiveness, at every stage of interaction with the customer creates the foundation for true differentiation. Good responsiveness helps develop a level of credibility and trust and this can be used to build a tangible and sustainable competitive advantage and leverage to expand your customer base. When customers are happy with the service, they are willing to recommend an advisor's services to their friends and family.

Increasing responsiveness

So how can advisors make their firms more responsive?

Step 1: Make responsiveness a priority ~ Like IBM's CEO, the urgency for responsiveness must come from the top before it can trickle down through the firm. Advisors need to establish expectations for responsiveness within the team. Like IBM chief executive who spelled out to employees what she expects from employees, specific standards for responsiveness need to be created so that everyone has an understanding of what to do. Whether it is employees that engage with customers or the back office support staff, all have to be trained on how to be responsive.

A common mistake is to not realize that responsiveness requires a personal touch. For example, there is a huge difference between an auto-generated email that states “We will get in touch shortly” and a personal email from a team member assuring the client that their request is being looked at.

Step 2: Define responsiveness metrics ~ Most firms pursue responsiveness as an idea in general terms. However, without defining the metrics, how can a firm know whether they are truly responsive? How long should it take to follow up a sales lead? How long should it take to respond to a customer email? How long should it take to provide a quote to a prospect?

So how can these metrics be defined? Advisors can use a flow-chart for example to document their existing sales processes and all of the steps required to close a sale. Once the process has been mapped, then metrics can be established for how long each of these steps should take. Team members can then be evaluated against these metrics on how fast they respond. By breaking down the sales process and reading the metrics, advisors will be able to see where the gaps in service lie and work towards proactively improving their service.

Step 3: Arming with knowledge ~ It is important for advisors to train staff especially those who are more likely to engage with customers and given them sufficient knowledge about the products. If clients have queries, do front office staff have enough knowledge to answer basic questions?

Step 4: Exceed customer expectations ~ Think from a perspective of a client – what would be your expectations for a financial advisor? Are you doing enough to give clients an excellent experience so that they would recommend your service to others? If you are late in responding to client's inquiry, do you apologize? Raise the bar so that you are a step ahead of competition.

For advisors, responsiveness is a quick, easy and cost-effective way to stand apart in the crowd. By instilling a culture of responsiveness within the team, advisors can maximize the value they deliver to prospects and clients and reap expansions in their client base.

Share this article