How to get more from less

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

By focusing her efforts, Kathleen increased her income.

Kathleen Richards is a financial advisor who works in a well-defined market. She has been in the business for twelve years and has established her expertise in helping women plan their financial futures. She has a large client base built up of female business owners, women entrepreneurs, and successful female professionals. She originally started her career as an insurance advisor, but over time has broadened the scope of her business to include all forms of financial planning. She now provides first-class advice for all of her clients’ accumulation, retirement and protection needs. In particular, she has made a point of helping women who have gone through a trauma - who are left to manage their own funds after the death of their partner, or a divorce.

When she was first introduced to The Covenant Group, Kathleen was ready to get off the prospecting treadmill and maximize the revenue she derives from her existing clients and network. She didn’t want to suffer through the same ordeal as last year when she tried to keep in touch with all 300 of her clients. Her remarkable service effort had produced a career year - she grossed over $400,000. But, come Christmas, she was exhausted from the effort and missing her initial enthusiasm for the business.

She obviously wasn’t challenged by trying to turn prospects into clients. Her problem was more subtle. We asked her to indulge us in a little experiment that may just restore her enthusiasm while increasing her income significantly.

When she heard what we had in mind for her, her initial reaction was complete disbelief. To her, it sounded like we were asking her to ignore 90% of her clients and revenue. However, as we explained, we wanted Kathleen to prepare a list of her top 20 relationships. She should still service her other clients but needed to make her top 20 a priority. In my experience, up to 80% of a financial advisor’s income is derived from just 20 key relationships. Not 20 percent of your relationships, but 20 actual people. And those 20 people needn’t be only clients, they can also be people who are centres of influence. We weren't asking her to ignore her other clients. We just wanted her to spend more time on her top 20 and try some new approaches with them.

It took some convincing, but eventually, Kathleen agreed to our plan. Kathleen was anxious but excited about the potential. We spent the next hour going through her client list and contact manager to choose the 20 people she was going to target, then she left to plan her strategies for maximizing her income from those 20 people.

In six months we would know if she had been successful.

If Kathleen was going to make her top-20 list work she needed to determine how she was going to make more than $400,000 from just twenty people. The best place for her to start was with the woman right at the top of her list - Rachel Leish, the 42-year old owner of a growing advertising business in Vancouver. In the year that had just passed her company had grown from 20 to 30 million dollars in revenue. Rachel worked long days and what time she had left she devoted to her 8-year-old daughter who she supported after divorcing her husband five years earlier.

Kathleen knew that Rachel was the driving force behind her business and had a net worth of over $3 Million. Kathleen managed some of Rachel’s money, but not all. Kathleen knew that if the experiment was to be successful she needed to do more with Rachel. In addition to managing Rachel’s investments, Kathleen recognized that Rachel needed more life insurance. She wanted to insure Rachel’s daughter, the key people at her company and do the group insurance for her employees. As well as finding a way to sell Rachel more products and services, Kathleen also realized that she needed to use Rachel as a centre of influence. As the owner of a vibrant company, Rachel was well respected and well connected. Kathleen knew that if she could gain Rachel’s trust, Rachel could introduce her to many other business owners.

To do this Kathleen determined to provide first-class customer service and find ways to add value beyond just dispensing financial advice. The first step in giving Rachel first-class customer service was to clear a day and take Rachel out to lunch. This wasn’t to be any ordinary lunch. Kathleen would prepare meticulously for her meeting. She wanted to position herself to take over all of Rachel’s investment and protection needs as well as to find a way to help Rachel outside their financial relationship. Kathleen was excited about this vital meeting but had no idea that it would transform her business dramatically.

The next time we saw Kathleen she was a changed woman. She seemed more confident, less frazzled and worn down. We asked her how the experiment was working out and she grinned and said, “I can’t believe how right you were.”

Kathleen told us that as a result of just one lunch with Rachel she was already way ahead of last year’s revenue curve. Our coach laughed, thinking she must be exaggerating. Even we had trouble believing that one lunch could have been so profitable. But Kathleen described how wrong we were.

The first thing Kathleen did over lunch was to remind Rachel of how she had successfully helped her in the past. Then she began to explore Rachel’s current situation, and where she wanted to be in a few years time. The gap between those two states told Kathleen what Rachel needed, and as she suspected there was a lot of business that had been unaddressed. During the lunch however, Rachel had left the table a couple of times and returned looking worried. The third time Rachel returned she was almost in tears. She told Kathleen that her daughter had developed a serious lung problem in the last month. She was being treated by doctors at the hospital but her condition was deteriorating.

As a mother, Kathleen could understand what Rachel was going through. In fact, one of her other clients had treated Kathleen’s son for bronchitis several years ago. Suddenly, Kathleen realized that she could help Rachel. She quickly explained that she had a client who was a top-notch lung specialist. Normally Rachel would be put on a waiting list for an appointment, but Kathleen was sure that she could make an introduction and get her to see Rachel’s daughter almost immediately.

Sure enough, an appointment was set up, treatment began and, eventually, Rachel’s daughter recovered. Rachel was extremely thankful. So much so, that she suggested they sit down and discuss some of the investment solutions Kathleen had proposed at their lunch.

Because of her one lunch with Rachel, Kathleen had managed to put more assets under management, put key person insurance on two employees and secure the group life business. As well, Rachel had introduced Kathleen to two new high net-worth clients. And, she found that those clients were a source of introductions as well. To date, her revenue had increased by 25% and she was only 6 months into the year. She already called the experiment a success.

Lessons Learned

Kathleen’s experience shows the potential contained in your top 20 relationships.

In order to streamline her efforts and increase her revenue, Kathleen had to prepare her top 20 list and work those high-value relationships. She stopped wasting time on service activities that produced low revenue and instead found ways to better serve her top clients. She wanted to find ways to sell Rachel more products and services, as well as obtain introductions to similar prospects. To do this she had to find a way to provide value to Rachel beyond financial advice. Kathleen was able to build client capital by tapping into her network of clients and advisors. Introducing Rachel to the specialist, showed that Kathleen cared about more than just Rachel’s finances. Rachel saw Kathleen as an advisor with a lot more to offer than just a big return on a dollar. 

In the end, Rachel introduced Kathleen to 6 other business owners - two of whom became clients. To increase the income you derive from your existing network, create your own top 20 list and focus your efforts.

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