RIA Compliance and Practice Management Blog

How an RIA Firm Can Implement a Client Success Program (Part 2 of 3)

Posted by RIA in a Box

Jul 31, 2017 10:00:00 AM

Steps RIA firms can take to increase client retention with better client engagement

Previously, we've discussed the business need for a registered investment adviser ("RIA") to be obsessively focused on client retention. And in part 1 of this series, we introduced the concept of "client churn" and further discussed the economics related to client retention. In this second post, we look to provide some more tactical guidance on the steps an RIA firm can take to begin to implement a client success program.



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First, you need to deliver exceptional advice and guidance.

First and foremost and never to be forgotten, you must provide an exceptional product. No matter how great the customer experience is, no one is going to recommend a restaurant that serves a dry, flavorless steak when there’s another establishment in town that’s serving up an exquisitely juicy ribeye. Another example that comes to mind is the best pizza joint in town that has the seemingly curt, or sometimes altogether rude, staff. They know you’re there for the best pizza for a hundred miles, “so let’s keep the line moving, people!” With that said, there’s no better dining experience than the restaurant that serves the best with the best service. The restaurant that makes you feel like you’re welcome and where each staff member treats you like a friend and not a stranger, to the point where you feel like you may be a regular there even though it’s your first time. Smiles aside, your clients are here for good advice and guidance – but they’d prefer to receive advice from an amicable individual as opposed to an individual who sounds like they’d rather not be in a conversation with them.

So let’s assume you’re already doing what was just described. How do you increase retention? Why, with a client success program! That’s how! Since starting a new program or launching a new strategy is often difficult or otherwise time-consuming, here are three simple steps to begin your own in-house client success program at your RIA firm:

  1. Engage with Your Clients

Measure how your clients feel about you and your RIA firm.

“It is important to always take the pulse of your customer through win-loss and onboarding programs, surveys, direct contacts and certain events where you can collect appropriate data," Sue Duris, Director of Marketing and Customer Experience, M4 Communications. It's very challenging to begin to implement a client success program before first being able to organize your clients into actionable groups.

Initiate contact with clients that you have not heard from in a while or that you think may not be satisfied with your service.

These are the clients that you may be at risk of losing. If you don’t reach out to them now and they ultimately terminate your service, you are less likely to have the valuable opportunity to learn why they were dissatisfied enough to leave. In addition, if you have not proactively reached out prior to their decision to leave, you will most definitely be faced with the near impossible task of retaining them as a client since they will likely be committed to severing the relationship.

If you speak to them before the “point of no return,” you may learn that a lack of contact on your part was about to be a factor in their termination and they will appreciate your initiative. Additionally, if they’re dissatisfied with the service you’re currently providing, whether it’s portfolio performance or otherwise, you may have the chance to initiate a dialogue to alleviate the dissatisfaction before they ultimately leave.

Reach out to clients who hold you in high esteem.

“…a happy and satisfied customer is not enough. A customer who is willing to tell everyone they can how great your brand is, is a lifetime brand advocate, and the only customer you should be focusing on," Sue Duris, Director of Marketing and Customer Experience, M4 Communications

As detailed above, perhaps your happiest clients shouldn’t be the only clients you focus on, but these are the clients that are most willing to tell others about their great experience with your firm. Prospects referred by clients are terrific leads that are likely to convert to a client at a much higher frequency compared to prospects from more traditional marketing campaigns.

  1. Develop Educational Resources for Your Clients

Create materials that will benefit or empower your clients.

These don’t have to marketing materials in the traditional sense. Instead, focus on developing resources that allow your clients to more easily achieve their goals. These can take many forms and again, it's important to poll your clients in regards to what information or content would be most helpful to them. Perhaps it's content related to applying for student loans for their children or alternatively, how to budget properly for unexpected healthcare expenses? The right client content for your firm is likely to vary widely depending on your client niche.

Blogs and webinars are a great way to interact with your clients on a larger scale. Some conversations that you have had or think you will have with one client may be a concern of another client. By creating materials that address topics you know you’ll be addressing multiple times, you be both saving your own time, preempting questions that your clients may have, and advancing your clients knowledge so that your next conversation is more fruitful.

  1. Offer Clients Simple and Reliable Technology

Your clients want to know what’s happening to their investments on their own schedule.

Many clients have designated you to be their adviser because they perhaps lack the time to manage their own investments or lack the knowledge or confidence to manage their own investments. It may be a combination of these circumstances, or it may be one or more of a plethora of other reasons. You may not know why, and you may never know why. What you can know for certain, though, is: your clients do not want to be kept in the dark about what’s happening to their assets.

Providing technology that empowers your clients to easily monitor their investments, including investment performance, transactions, and current holdings, allows them to bridge a proverbial knowledge gap. They hired you for a reason specific to them, and in so doing have entrusted you to responsibly manage their life savings. Simple piece of mind can be provided by offering transparency. Furthermore, advancements in client-facing advisor technology continue to make this piece of mind easier to deploy.

You might be thinking, “that’s all well and good, but my clients know I’m doing good work. Why should I add additional costs for technology to give them only a slight boost in knowledge?” The answer is: technology is “sticky.” Clients who have grown accustomed to your user-friendly technology offering – in addition to your outstanding service – are less likely to change to a competitor and be forced to get up to speed on new technology.

One step at a time!

All three of these recommendations don't need to be implemented at the same time. Take the time to ensure that each new segment of your client success program is launched with thoughtfulness and purpose. Remember that the ultimate goal is to be proactive about client retention. In the next post of this series, we’ll move from shifting gears to cruise control; from what you did to start your client success program, to what you’ll do to keep it moving at high-speed.

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Lexington Compliance and RIA in a Box LLC are not law firms, investment advisory firms, or CPA firms. Lexington Compliance and RIA in a Box LLC do not provide legal advice or opinions to any party or client. You should always consult your relevant regulatory authorities or legal counsel if applicable.

Topics: RIA Operations, RIA Technology

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