The way you describe your approach to customer service may be constraining your growth, limiting your referrals, and creating a succession problem you don’t realize.
Are any of these statements similar to how you describe your firm?
“We are a boutique financial services firm.”
“We provide highly personalized services for that small company feel.”
“We give you the attention you will not receive at a big Wall Street firm.”
If so, you may be working to impress people with your level of service. You may be working on setting yourself apart from banks and national brokerage firms. You may be using it as shorthand to describe the kind of intimate relationship you establish with clients. You may also be creating problems for yourself inadvertently.
Let’s deconstruct propositions like this and see the deliberate and accidental messages that are being communicated. What is it you are promising clients when you talk like this?
- Personal service
- Customized advice
- Personal attention
You are promising to know a lot about them. And that this knowledge will enable you to fulfill all of their explicit financial needs and anticipate many of the unspoken ones.
And that you can accomplish this because you are a small firm.
Your size means that every individual client is important. It means that the owners can have personal relationships with all of the families the firm serves. It means that no one will be reduced to a number or be lost in the system.
So what’s the problem? To oversimplify, it implies a promise not to grow and never to leave. The implication is that the firm will be overly reliant on the principals. The challenge is that to deliver on these promises over the long run, a firm must grow. And the company needs to be in a position to outlive the owner. I have seen the inherent conflict play out in client advisory board meetings. Clients want you to succeed. In some way, they equal weight your success with theirs. And at the same time they have concerns about you bringing on new clients. They believe, probably with some justification, that if you have more clients than you will have less time for them. For most firms, clients will still refer their friends but there may be some level of discomfort about it. Keep in mind clients do not refer to help you but rather to help the friend who has a need you can solve. But if they refer several people or if they hear that you have been bringing on lots of new clients, they will begin to worry about whether their service will suffer. In at least one unusual case, I observed an outright reluctance to provide referrals because of that fear.
The problem arises from the way the value proposition is framed. The flaw in the logic is in equating high levels of service with a small organization. Great service, including personal service, can come from any size organization provided a system is in place to deliver it.
Unique service can come from a boutique firm. Boutique implies small. But, according to my Merriam-Webster’s collegiate dictionary, it also implies “a small company that offers highly specialized services or products.” So if your firm only deals with real estate or private equity you may be a boutique. If your firm offers customized service to institutions, nonprofits, business owners, families and individuals, you are not a boutique.
I know small advisory firms that pride themselves on delivering Ritz Carlton service. But Ritz Carlton is not a small company. They own 89 hotels and have 35,000 employees. That high level of personalized service is clearly not limited to the realm of small companies.
Some advisors believe they can offer superior service because of how much they know about each individual client. Of all the companies that serve me, want to guess who knows me best? Amazon. It knows a fair amount about what I eat, about what I wear, and it certainly knows my interests based on what I read. I know it is not a person who is going through all that information and making helpful suggestions. As long as it helps me find what I’m looking for and gives me ideas occasionally about things I am happy to hear about and had not thought of myself, the fact that it is the system as opposed to a human never even occurs to me.
The fact that large, national companies (banks, for example) provide impersonal service is not because they are big. It is a policy decision. It’s a choice. Those organizations could build a system for personalizing service and creating a great customer experience, like Amazon has, and they have chosen to give other strategic objectives priority. They don’t provide lousy service simply because they are big and you don’t provide great service simply because you are small.
So let’s get “small” and, yes, even “boutique” out of our value propositions. Here is a better way to approach it. If your firm delivers great service, be specific about what defines that service. Draft policies and procedures and manage to them so that everyone in the organization is in agreement on what great service is and their performance is measured against those standards.
If you provide customized service, how do you tailor it to specific clients? I am confident that it is not simply a free-for-all where you give every client whatever they might want. You probably have specific ways you will adjust what you do for clients to conform to specific kinds of preferences. Let prospective clients know about those processes.
Tell prospective clients what they can expect if they sign up with you. Describe the experience of being a client. And then have processes to make sure you deliver on them.
In the end, these specific descriptions of what you do and how you will do it are more powerful than simply saying “customized” or “personalized.” One benefit to you is that you can make sure you carry through on what you promise. A bigger benefit is that you can then train everyone you hire to deliver that same experience. At that point, anyone who becomes a client of the firm will get that same great service. They will not need to rely on having access to the owner. The firm becomes scalable. Growth is not as scary a prospect to clients because the organization can grow and still deliver on its promises. And you can implement a succession plan that is less terrifying or traumatic to your clients.
Heck, you might even be able to take a vacation without checking email.
Offering a “small-company feel” can be great if you run a delicatessen or a neighborhood bar. For investment advisors, it is better to have a series of processes, designed with your target client preferences in mind, that systematically deliver on a client experience.