Are your clients spreading the word?

Consider this: you run a small business that recognises the importance of developing enduring and profitable relationships with your customers.

To that end, you work hard to produce quality products and/or services, offer outstanding service delivery and cultivate a friendly, professional rapport with your clients.

So what’s the problem? Why isn’t your business moving forward the way you expect? Despite your best efforts, why are long-term relationships proving so elusive? Why aren’t the referrals coming in at the rate you would like?

Realistic outcomes, long-term business relationships and ongoing profitability, are within your grasp.

Put yourself in their shoes

Firstly, think of the values that you would seek before making a commitment to someone in a business relationship.

It would probably be one where you felt the provider was listening to — and understanding — your needs and requirements. It goes without saying that you would be concerned about the provision of quality service that went beyond the norm.

The essence of strong business relationships is the ability to consistently deliver beyond the expectations of your customers.

In particular, financial services professionals must deal with the normal concerns that people have about keeping money matters confidential. Here, the need to build the relationship over a comfortable period will determine the ability to market it successfully.

Therefore, it is important to realise that a service-focused business is all about dealing with feelings and perceptions. People aren’t buying the ‘hard’ product so much as the ‘soft’ service that goes with it. The basic needs of the other party in such a relationship are for reliability and longevity of support services.

The customer is king

Many customers are currently choosing service providers that, no doubt, will be servicing their needs beyond the current decade.

Top of their minds will be those providers that have established strong relationships with their clients. Clearly, the successful provider is going to reap long-term benefits.

Understanding businessactivities

The first step towards building these sorts of relationships is to recognise, and understand, the following touchstones of business development. These can be grouped as follows:

• marketing and promotion;

• referral psychology;

• relationship management;

• implementation management; and

• evaluation.

All of these hold the key to managing the client while they are in the buying cycle.

Relationship managementculture

Once the initial approach has been made it is your responsibility to manage the relationship with the client.

This may include setting a pattern for reviews and further exploration of their product and/or service needs. Most financial planning firms include this in their systems already.

However, it is worth repeating that the focus of the relationship is to establish with the client a demonstration of capability in delivering service and creating a high degree of satisfaction in that service.

This in turn will create the level of customer loyalty that drives the long-term growth and profit to your business.

Managing the relationship means interacting with the client at times when you are not asking him/her to buy from you but indeed talking about issues from which their personal business will derive benefit. Don’t call on your customer or communicate with them only when you are selling your services.

Referral culture

One of the most critical tasks in making a client your business developer is to condition the client into a ‘referral framework’ where it becomes spontaneous for them to tell others about the value of your services.

Trusting relationships facilitate referrals, which are still the best way to acquire new business whatever your service environment.

This is even more important in sectors such as financial planning services, where there is little room for product differentiation.

The best way to move the client into a referral framework is to create a high level of intimacy in the relationship backed by a sense of empathy for their needs and wants.

Most clients will boast of their special place in your service matrix and if they come to believe that they are special in that relationship, and the time seems right, it shouldn’t be a problem for you to be more direct by eliciting the names of potential clients.

Implementation management

Implementing the strategy for a sound referral and relationship marketing culture in your business means continuously repeating practices that win your clients’ respect for you as a reliable provider of services.

It begins when it has:

1. clearly identified a vision for itself that values the importance of referral business;

2. identified all relationships having an impact on client retention, development, acquisition, and focuses on strengthening those relationships; and

3. put into place behavioural and procedural strategies with your staff for building relationships that create a referral culture.

Evaluation

Your business must constantly evaluate what you are doing and question its relevance to your clients’ needs and wants. Don’t be afraid to benchmark your service against that of a leading competitor. Moreover, be pragmatic: whenever necessary, change your approach to gain that service advantage that differentiates your firm from the rest.

A word about the 70/30 rule

Product quality and business expertise are certainly requirements for building a business relationship and creating a relaxed scenario for referral business. Yet, many practitioners in financial services rely wholly on these two factors to provide future business growth. In so doing, they ignore the 70/30 rule; they fail to spend at least 30 per cent of their time marketing their ability to meet the expectations of their customers.

This imperative applies equally to large organisations as much as it does to business owners.

How does this all equate to the management of a more profitable business?

The answer is that if you follow some of the more basic rules there is no doubt that your customers will see increasing value in their long-term relationship with your organisation and will tell others about it.

Max Franchitto is the managingprincipal of MGF ConsultingGroup.