"If your client sees you as a cost, your services ought to be cut; if they see you as someone who can help them to run a better business, they need you now more than ever." - Mark Jenkins, CEO, The Gap
In challenging economic times, most business owners look at ways to reduce costs. Advisory services are often considered (by most business owners) a ‘nice to have’ as opposed to a ‘must have.’ The result is a potentially damaging disconnect where, at a time when business owners need more support from their advisors, they’re working with advisors less.
To close the disconnect, we need to understand the client's perspective, adjust our advisor perspective, and uncover the value gap for our clients. Once our clients understand the value gap and see the advisor as having the solutions to close the gap, they are more likely to invest in the help they need.
By adjusting our advisor perspective, dialling up our empathy, and engaging with our clients more, we can help clients see that the solutions to many of their problems can be found in the advisory services we offer:
From the table above we can see two common themes; clients either don’t believe they’ll get the required return on investment from advisory (the Price / Value Gap), or they’re not aware / confident their Advisor can help them (the Knowledge / Communication Gap).
To close the Price / Value Gap Advisors need to reduce the price and increase the value to your clients. This might sound like a paradox, but it can be done with a Cashflow and Profit Improvement meeting (or CPIM). A CPIM is a 90-minute meeting that showcases the impact small changes in key metrics (such as debtor days, inventory days, customer retention, average transaction value, or gross profit margin) will have on cashflow and profit. Often a 5 or 10-day reduction in debtor days will free up thousands in cash. Likewise, a 2 or 3% lift in gross profit percentage can lift profit significantly.
By offering a CPIM for a low price (say $495 / £245) you can show your clients a huge return on their investment with you. The lift in cashflow or profit is then the ‘size of the project’ that you can help them to implement with forecasting, management reporting and accountability meetings. You might move from solving the debtor issue to the next project which might be margin improvement, transaction value improvement, or client retention strategy.
To close the Knowledge / Communication Gap, advisors need to engage with clients more, ideally face-to-face. Offering a no-cost service such as the Complimentary Client Review meeting eliminates any lingering price / value gap. The purpose of the meeting is to discuss:
One thing to remember is that your clients will not wake up in the morning and want to buy advisory services from you. That doesn’t mean they don’t need help from you; what they need to see is how your services will solve the challenges they have in a way that the value they’ll receive is so much greater than the investment they’ll be making with you.
Watch this 2min video from one of your peers on tips to get started!
"People don’t know what they need until you show it to them" - Steve Jobs