There is little doubt that revelations emerging from the Royal Commission into Misconduct in the Banking, Superannuation and Financial Services Industry will drive significant changes in the coming years.
It’s incumbent on industry participants to do all they can to help raise the level of public trust and confidence. There’s speculation from the industry as to what actions should be taken. Chances are you’re also speculating what actions you should take.
Earlier this year we ran an initiative that demonstrated current financial planning clients trusted their planner (based on 846 responses). They were satisfied with the service and felt the planner acted in their best interests. But if you’re focused on growth it’s not your current clients you need to establish trust and confidence with — it’s your prospective and inactive clients.
In a 2015 survey, only 24 per cent of Australians said they trusted financial planners. Since then, the Australian Securities and Investments Commission (ASIC) has entered into 71 Enforceable Undertakings (EUs).
Unfortunately, this small fraction of the industry — and the poor reputation they have created when it comes to trust and confidence — is having a disproportionate and unfair impact on the rest of the planning community.
It’s my belief that one of the best courses of action you can take now is to collect feedback from your current clients and use their insights to present authentic social proof to prospective clients. This is something most of the industry is not doing.
A recent piece of research indicated that less than 30 per cent of the financial planning industry uses technology to collect feedback from clients.
What this represents is a fundamental disconnect between the pervasive marketing narrative used by industry professionals about putting their clients first, without having authentic evidence to support those assertions. Saying you are client-centric, then not asking your clients how you are performing, is tantamount to setting a budget then not looking at your bank balance.
When was the last time you booked a hotel or restaurant without first checking out online reviews? Do you find access to feedback from your peers useful when making purchase decisions? Chances are that you, like most people, look for evidence from others that will justify making a buy decision for pretty much everything.
The internet enables the collection of, and access to, a wide range of feedback and reviews. Online research figures heavily in customer decision-making — whether they’re in the market for financial advice, a new car, or a bottle of wine.
If you’re not collecting client feedback, why not? Do you need help understanding how it can be leveraged to improve your business? Are you concerned about the potential negatives that may flow from the whole feedback process? Do you need help developing your strategy i.e. what questions should you ask? Who will you survey? How will you encourage clients to respond? How will you address negative responses?
These issues are easily overcome with the right service, particularly if the data collected is confidential and visible only to you.
Instead, I encourage you to think about the positives and the tangible benefits that client feedback will bring to your business:
Demonstrate you’re truly client-centric. Collecting, sharing and acting on your clients’ opinions and feelings is a tangible demonstration that you are focused on improving their experience and outcomes. Just the act of requesting feedback can have a positive impact on client retention and your bottom line.
Use your clients to sell your services. Affirmative quotes, narratives and stories should be used to promote your business on your website, social media pages, in advertising, and on marketing collateral. New customers look for tangible, credible evidence about your services, often before they’ve even spoken to you. Client feedback also ensures your messaging stands out from the generic content of your competitors.
Stay top of mind. Surveying your clients three to four times per year escalates your services in the client’s mind. If they’ve not heard from you for nine-plus months, what’s the likelihood that they’ll recommend you to their network on a regular basis? Will your business come to mind when someone mentions an issue that you could help with?
Improve your response rate. Use a third party to collect feedback and do so in a manner that doesn’t put the client on the spot. Most of us don’t like confrontation so collecting feedback in a neutral manner, at a time and in an environment that the client is most comfortable with, will lead to more honest and upfront feedback. I don’t recommend collecting it anonymously as it limits your ability to act.
Focus on the relationship. Clients’ behaviours and attitudes are based on their experiences. The strength of this relationship determines whether you’ll retain them as a client, and whether they’ll advocate for your business. It will ultimately drive bottom-line performance, particularly if you can link it to client lifetime value and implications of any changes in key client relationship drivers such as trust, satisfaction, retention and advocacy.
Get your team singing from the same hymn book. Everyone in your business is responsible for fostering strong relationships with your clients. Regularly collecting feedback — and monitoring performance — is a good way to remind your employees that their diligence and client focus is paramount. Client feedback represents the experience of using your business, enabling you and your team to assess and address any performance issues much more quickly and effectively.
Keep your finger on the pulse. As businesses grow, senior managers may become isolated from what is happening on the front line. A well-implemented client feedback strategy provides key stakeholders with the information and insights needed to make confident decisions designed to improve performance and deliver increased value.
Manage risk. Did you know a dissatisfied client tells an average of 16 people about their poor experience? Do you want to risk harm your business’s reputation? Collecting feedback regularly ensures you can nip this in the bud quickly, minimising negative effects on lifetime value, market share, profits, and business valuation.
Get proactive about attrition. Let’s face it — some clients are going to stop doing business with you and often you find out when it’s too late. Suddenly you find yourself hastily seeking a new client/s to fill that revenue gap. A situation such as this can be managed when feedback is requested on a regular basis. Forewarned is forearmed.
Continuously improve. Better understand your clients’ needs and concerns. Identify how you are performing, and what you need to focus on to build a more successful practice — without the guesswork. Exceed client expectations, develop loyalty and generate referrals.
Asking for client feedback can provide extremely valuable insights and other benefits for your business. There’s a lot to be gained and absolutely nothing to lose. In the current regulatory and media environment, it’s a very smart move to help you cope with the inevitable changes that will sweep through the industry in the coming years. All you have to do is ask!
Do you collect feedback from your clients on a regular basis? If not, what’s holding you back?
Dr Ray McHale is the founder of MyNextAdvice, a cloud-based service that collects client feedback for financial planning practices and finance brokerages.