Putting business first in your client relationships
The following is based on one of The Covenant Group’s clients. All of the names and telling details have been changed.
When we first met Janos Nagy, his income had stalled out at $100,000 – he was frustrated and confused. He’d spent the past year implementing an aggressive marketing campaign, which generated a lot of appointments with good prospects; unfortunately, Janos turned very few of them into clients. On the phone, before our first meeting, he told us he was mystified by his inability to close new business.
The first time we met, Janos told us he’d listened to a talk by Norm Trainor, our CEO, and remarked about his reference to a football career. Janos himself had been drafted to a pro-team and played half a season before getting injured. He and Norm reminisced about football days until Norm glanced at the clock and noticed that twenty minutes had gone by. Norm tried to steer the conversation toward business, but Janos seemed content to share stories and chat. Norm was beginning to suspect why Janos’s business was suffering. He interrupted their conversation and asked Janos to give him some background.
Seven years ago, Janos traded in a career as an engineer for a career as a financial advisor, because he was tired of the long, lonely days chained to a computer. He’d wanted to work in a people business, and had always been interested in financial planning. He quickly tapped a core group of well-off friends and family members, which continued to serve as his client base. But he was having trouble growing beyond them. He had appointments, but couldn’t close any business.
Norm asked Janos for a specific example.
“My brother-in-law introduced me to Gordon Lowell, owner of a chain of dry cleaners. His business is growing like crazy, but he’s got all of his money tied up in the business. We’ve gone to dinner a few times, to football games. He’s got his eye on acquiring one of his competitors, and he’s told me that as soon as the deal’s closed, we’ll sit down to talk about putting together a plan for him. A number of other prospects have also told me they’ll work with me in the future.”
Norm explained to Janos, "one of the buzz words in our business today is ‘relationships’”.
Janos nodded, “That’s why I became an advisor.”
Norm commented, “You have great people skills, Janos. But the problem you’re having – and many advisors have this problem – stems from a misunderstanding of what we mean by ‘relationships’. Our ability to develop deep relationships enables us to do our job of helping our clients achieve their goals, but we can’t omit the word ‘client’ from the phrase ‘client relationship’. Certainly, some clients become friends and that’s a bonus, but you’re not in this business to make friends.
“Unfortunately, Gordon’s not a client or prospect; he’s your friend”
“What do you mean?” Janos asked.
“You haven’t set the context of your relationship in terms of your business.”
“But Gordon’s talked about giving me business after he completes his deal.”
“Gordon doesn’t need you then, he needs you now. His personal financial position is too dependent on his business, and his business is susceptible to all kinds of threats….”
“I know all this,” Janos said.
“But have you demonstrated the risks to Gordon?”
Janos fell silent.
“There’s an irony here,” Norm explained. “Were something to happen to Gordon’s business you would feel bad - as his friend. But as his advisor, it’s your role to help him protect himself against this contingency. So in some sense, as a true friend and as an advisor, you’re letting Gordon down.”
“I see what you’re saying, but I don’t like being pushy.”
“Closing business isn’t a matter of being pushy; closing isn’t some magical moment that happens at the end of a sales cycle. Closing is simply the inevitable result of a process that begins with setting the right context upfront. You’re setting the context for a friendship, not a business relationship, and you’re quite successful at closing your prospects on being your friend. You just need to set a different context.”
“How?”
“Explain that you want to earn their business, and build a relationship that will help you solve their financial problems.”
“But I don’t think that’s my style. I don’t want to put people off, to have them think that all I’m after is their money.”
Janos was getting himself in trouble here. We needed to step back a bit. Norm asked Janos why got into this business.
He reiterated his desire to work in a people business. “Janos,” Norm explained, “I know that part. But I want to know why you got into this business. What inspired you to choose this business?”
Janos thought for a moment and then began to tell Norm a story about an uncle of his, to whom he had given investment advice. Janos had shown him the power of investing small amounts over a long period. After a few years, his uncle’s daughter got ill, and the uncle, with his savings to support him, was able to take a year off work to spend time with his daughter. His uncle believes that spending this time contributed to his daughter’s eventual recovery.
We often lose sight of why we are in the businesses we are in. All top producers have a passion for their business, and more importantly, they express their passion. We need to keep our passion on the surface. When we fall out of touch with our passion we lose track of why we are there to see our prospects. I told Janos that like a lot of advisors, he’d begun to set the wrong context. Somewhere along the line, he became more concerned with being liked by his prospects than with helping them achieve their goals. Janos agreed.
I told Janos he needed to tap into his passion. If you know your prospects need your expertise, you won’t have any trouble setting the context for a business relationship.
“Janos,” Norm explained, “expressing your passion through stories is an ideal way to set the context for your client relationship. An effective method is to show your prospect how you have worked with people who are in similar positions to them. Your story about your uncle is a powerful story. Use it and others like it to illustrate the problems your clients face and how you help them. Once you’ve set the context, explain the process you follow. State when and how you suggest proceeding, what you hope to accomplish for each meeting. And throughout, continue to demonstrate your passion to help motivate your prospects to act today, not tomorrow.
“But it’s not always me. Sometimes the clients push the friendship side over business.”
“You have to be careful about that. You choose your clients, not the other way around, so you need to be vigilant of people who use up your time and to develop the discipline to treat them as prospects, or as friends. But don’t fool yourself that you have a prospect, when what you have is a friend.”
Lessons Learned
Janos learned the risk of misunderstanding the concept of relationships in the business of financial advising. Janos thought that by creating relationships with clients he would earn their business, but learned that a client relationship is different from a friendship. We shouldn’t think that the best way to gain clients is by establishing friendships. In fact, as Janos saw, this can do a disservice to your prospects, because it postpones dealing with the challenges in their current situation. Earning someone’s trust and confidence is key, but to help your clients, you need to impose a purpose on your appointments. As Janos learned, sometimes the reason we don’t provide the necessary structure is that we want to be liked and are afraid of being rejected. To avoid this, we need to draw on the passion that brought us into the business. And we need to express that passion, share stories with our clients, get them passionate about minimizing their risks and achieving their goals and doing it today, not tomorrow, because tomorrow might be too late. If we’re fortunate, some of our clients will turn out to be our great friends -- one of the side benefits of being in a people business.
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