Getting by with a little help from your friends

The following is based on one of The Covenant Group’s clients. All of the names and telling details have been changed.

After ten years as an advisor, Joe Lee was poised to take his business to the next level, but something stubborn was holding him back.

Joe was introduced to The Covenant Group because he met our founder and CEO, Norm Trainor, on a plane ride back from a conference in Atlanta. Joe had heard Norm's keynote address on practice development and wanted to pick his brain on how to improve his business.

Prior to becoming an advisor, Joe ran the printing business he’d inherited from his father. Running it was like getting his MBA, Joe said. But the printing business didn’t thrill him and he sold it. What he did love was anything to do with investing and financial planning. He decided to make that his profession.

When he started out as an advisor, he picked up clients wherever he could find them.

Within a few years, he had a motley clientele, which included young graphic designers, food service salespeople, a limousine driver, a few chiropractors, the owner of window-cleaning service. His clients differed wildly in their careers, ages, financial success, and life goals. A few years ago, he began to think more strategically about his business, and decided to focus on small business owners. He enjoyed working with business owners, and knew that his own experience with the printing business gave him a keen understanding of their issues.

By focusing on business owners he significantly increased his revenue, but he still felt he wasn’t even close to realizing his potential.

When Norm asked Joe what was holding him back, he said his time was maxed out.

“Joe,” Norm explained, “time is a problem for advisors of all levels. Average advisors and top performers are equally busy. We’re all working with the same twenty-four hour clock. So what separates the top performer from the average performer?”

Joe answered, “Better use of their time.”

Norm: “Yes, but there’s more to it than that. What underlies their success is how they view time. High-performers see time as one of many resources available to them. To them, time is equivalent to capital, intellectual capital, their staff, technology and external resources, such as suppliers and collateral professionals. They do a great job of juggling all these resources so that they are working at or close to their optimum level as much as possible. They know the value of their time: for some that might be $500/hour or $700/hour. They make sure others are doing the $20/hour tasks.

Joe: “It’s easy to see how sensitive your revenue line is to the amount of time you spend working at your optimal level. If you were to replace only one hour a week of $20/hour work with $500/hour work your revenue would increase by over $20,000 annually.

Norm asked Joe what he thought his highest level activity was.

Joe: “That’s obvious – meeting with business owner prospects or working with my business owner clients.”

Norm: “Actually, I’d put that at number two. Your highest-level activity is what we call working on the business: planning, developing your strategy. In fact, I’d include the time we’re spending together talking about your business in this category. It’s deceptive, because you don’t directly get paid for planning your business, but it has the greatest impact on your revenue.

“For you, Joe, growing your business means making time for planning and for working as much as possible with your ideal clients. So we need to look at what is keeping you from these activities.”

“Working with clients who don’t fit my ideal client profile.”

“Joe, you are at a stage every successful advisor eventually gets to. Your potential for growth is huge, but your original clients are holding you back. Finding the right solution is the key to your next growth spurt. We already know that spending your time servicing these clients is not the most efficient solution. We can explore more efficient methods of servicing these clients, but first we need to address the strategic issue of what you want to do with these clients. Do you even want to keep them?”

Norm: “That’s an emotional response, and it’s an important one. We’re all in this business because we care, but is it the only reason? Is there any strategic benefit to keeping them as clients?”

Joe: “A lot of these clients are young, and many of them have the potential to grow into my ideal client profile.”

Norm: “So, we have two strong reasons for keeping them, or at least many of them, but are you doing the best job of retaining them. Are you providing the best service you can for them?”

Joe: “That’s what’s killing me. I’m trying to grow my business with my business-owner clients, but I’m running hard to keep up the service work for my original clients.”

Norm: “If it’s not worth your time to service them, might it be worth someone else’s time?”

Joe: “I had thought of hiring a junior advisor, but I’m not ready yet.”

Norm: “We never feel ready to hire someone. Most advisors hire too late, after they’ve been pushed to the limit for months or even years. Hiring too late means missing opportunity along the way. You won’t know when you should make a hire unless you do a thorough business plan.”

Joe told Norm he had recently revisited his business plan and financials. Unfortunately, a new hire didn’t make financial sense. The service work was enough to bog him down, but not enough to keep someone else busy.

Norm: “You might be right, Joe. The answer isn’t always a new hire, but neither is the answer continuing with the status quo. However, there are other resources you can utilize. In fact, Walter, an advisor I know who was in the same situation as you found his answer in a service provided by one of his supplier companies.

“One thing I notice with many advisors is they don’t take advantage of all the resources available to them from their supplier companies, whether those are marketing or servicing resources. Walter’s company had partnered with a policy-holder marketer and Walter signed up for the service, which now conducts regular mailing and telemarketing to a select group of his clients”.

Joe interrupted, “I don’t like the idea of someone else dealing with my clients. There’s no way I’m handing over control like that. I’d rather struggle along and wait until I can hire someone in-house.”

Norm: “I appreciate your concern,” I said. “Walter felt the same way. But he recognized that if he wanted to keep his clients he had to find a way to service them. The risk of not doing so, from many standpoints – compliance and protection from competing advisors among them – was too great. Fortunately, the marketing service does not compromise his control over his clients. The service is customized and fully integrated to Walter’s business; the client perceives the service as coming from Walter and Walter controls all aspects of the service. At the touch of a button Walter can see exactly what is going on with his clients – he knows who has received what and what services they have purchased. Furthermore, he can review telephone logs to see if there are other issues that warrant Walter’s direct involvement. In this way, Walter is able to service a block of his ‘non-ideal’ clients in a matter of minutes. This was a perfect resource solution for Walter: it met the level of service he wanted for these clients, it cost him considerably less than a new hire, and it freed him up to work more consistently with his ideal clients.”

Joe agreed that Walter’s solution might work for him and promised to look into it.

A few weeks after their plane ride Norm received a call from Joe telling him he had signed up with a marketing-service organization his company had recently partnered with.

A few months after that, Norm received another call from Joe letting him know that the service had paid off. He was now spending 30% more time working with people who fit his ideal client profile and his revenue had grown similarly.

Lessons Learned

Joe learned four important lessons about taking his business to the next level:

• Because your original clients don’t always fit your current ideal-client profile, trying to service them on your own can drag your business down.
• Cutting those clients loose is not usually a satisfactory answer. Many advisors are attached to clients who have stuck with them from the beginning, and feel that many of them have the potential to evolve into ideal clients.
• Hiring a junior advisor to service the block of original clients is not always feasible.
• Many organizations have marketing services available to advisors to help service a block of clients. Integrating these services within your practice will allow you to meet the service demand and free you up to work at your highest level.

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The Covenant Group is referred to by many as where entrepreneurs go to become Business Builders. They are considered to be thought leaders and authors of the best-selling books, The 8 Best Practices of High-Performing Salespeople, The Entrepreneurial Journey, and The Business Builder.