The problem these days with selling any product or service is that there are always plenty of other firms trying to do the same thing.
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For decades a key marketing buzzword has been ‘differentiation’ – making your proposition stand out from the crowd. In the motor industry, for example, it’s easy to see how manufacturers are differentiating their products with distinctive styling, the latest technology and lots of extras. However, in financial services it’s far more difficult, especially for brokers who are selling the same products. How do you ‘differentiate’ your proposition when you’re selling exactly the same two-year fixed rate as the broker up the road?
Service
One solution has been to focus on service. The logic is that if clients are given a great service they will be more inclined to keep on coming back. True enough, and difficult to argue against. As every broker knows, providing a high quality service is essential to their future survival.
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Unfortunately, great service does not automatically guarantee success, because service is something which has to be experienced before it has any meaning. Every company in the UK promises good service, but we all know that some will deliver it and some will not. It is only when you have gone through the buying experience that you know if a company provides a good service. Once you have bought a product, a service proposition has meaning. However, for potential clients who have not used you before or heard good things from one of your clients, a service proposition is nothing more than hot air.
Another problem is that, increasingly, excellent service is being taken as the norm. A broker who can provide clients with competitive products supported by a faultless service has every reason to expect a loyal client base, but the harsh reality is that, for many clients, that is simply what they expected in the first place and is not necessarily a guarantee that they will go back again in the future. Although you may still be on their short list, they may still want to shop around the next time, just to make sure they’re getting a good deal.
You can hardly blame consumers, really. Think of your own experience. When you last purchased car, travel or home insurance – did you get a competitive product and was the service fast and efficient? It most probably was. But when your car insurance came up for renewal, did you still shop around to check that you were getting the best deal? The answer is probably yes. It wasn’t that you were dissatisfied the last time, it’s just you simply feel the need to double-check you’re still getting the best deal. The truth is the magnificent service you received was not enough, by itself, to automatically guarantee your custom.
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Don’t get me wrong at this point; I’m not saying that service is unimportant. Quite the opposite – if you don’t provide a good service you’re not even in the ball park, but providing service excellence will not, by itself, guarantee loyal customers.
Making clients sticky
So what else can you do to make your clients ‘sticky’? Try embracing a concept called ‘essential partner’. The idea is straightforward; it is to work with clients in such a way that they view you as an essential partner – someone they simply must consult with on issues to do with their finance. It sounds simple, but takes commitment to work effectively. If you can pull it off, it can create a tight bond between you and your clients.
Let me give you an example of how it works in another market. A friend of mine likes buying dilapidated houses, doing them up and selling them for a profit. An essential ingredient for success is a good architect. He uses an architect who is not only skilled at his job and provides excellent service, but who has become an ‘essential partner’. How has the architect done it? He goes beyond what is expected of him. He lets my friend know when he hears about suitable properties coming on the market, tells him about the latest techniques in restoration, takes him on courses which build his knowledge of planning issues – in short, my friend would not consider undertaking a restoration job without the support of his favourite architect. He is an essential partner.
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Can brokers hope to engender the same sense of loyalty and partnership with their clients? Yes, but in order to do so you need to acknowledge that you have to go beyond simply sending clients an annual Christmas card and a newsletter. In fact you have to stop thinking of clients as an homogenous group and treating them all in the same way.
The opposite approach
The challenge is to take the opposite approach and start thinking of clients at an individual level. For example, it goes without saying that a buy-to-let client is going to be very different to a first-time buyer who will be different again to a non-conforming client. They all have different needs and different expectations. You need to be able to anticipate what those expectations will be and then surpass them.
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If you get your approach right you will, over a period of time, be acknowledged by your clients as an essential partner; someone who they must consult before making key financial decisions. If you’re getting it really right they will feel afraid to make these decisions without consulting you first. You may be nodding your head as you read this, as I am sure many of you have clients who fit this description already.
As with many marketing theories, it sounds easy but is more challenging to put in practice and get right. However, the reward for success is a client base that is truly loyal. That has to be worth working towards.
