Romancing your prospects

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

By Norm Trainor President and CEO of The Covenant Group. 

Julian Such was proud of his focus on building long-term relationships with his clients. Unfortunately, he was having trouble finding new clients; it never crossed his mind that the source of his problem might be his long-term relationship strategy.

Julian started out in the business as an investment advisor over fifteen years ago. Back then, he focused on transactional sales, but a few years ago, he decided to concentrate on deepening his relationships with his clients. To accomplish this, he made several changes in his practice, including developing a comprehensive service plan for each segment in his client list, which doubled the time he spent with ‘A’ and ‘B’ list clients. To meet more of their needs, he expanded his offering by partnering with other financial experts, such as an insurance advisor. The strategy paid off, and Julian noticed a huge boost in his revenue from his existing clientele. But a couple of years ago, that immediate growth surge began tapering off, and he found himself having trouble gaining new clients.

Julian was particularly frustrated because he had recently lost a couple of large cases that would have made his year. When we met, I asked Julian to tell me about one of those cases.

Julian’s prospect was Yvonne Hooper, the owner of a video production company. Yvonne was in her early 40s, married with two children, and had an estate worth roughly $2 million. Yvonne was the sister-in-law of an existing client, so Julian felt he was well positioned. During his appointment with Yvonne, Julian discovered massive gaps in her financial plan. She was over invested in her business. What she had invested outside the business wasn’t diversified. She was underinsured and was well off her plan to sell her business in five years and retire. As was his practice, Julian ended the appointment by explaining that he was only interested in working with people who became clients for life. A couple of weeks later, Julian met Yvonne again and laid out a comprehensive plan for her that he knew none of his competitors could beat. He’d thought Yvonne would be thrilled to know that he had found a way to solve all her problems, but she seemed unexcited. And that was the last time he had seen her. He had made follow-up calls, but none were returned. Worse, he’d heard a couple of weeks ago that Yvonne was giving business to another advisor.

I asked Julian what he thought had gone wrong.

“Maybe she doesn’t care about solving her problems. Maybe she’s not interested in building a long-term relationship with an advisor.”

“Perhaps,” I said, “but frankly, I think something else is going on here.”

When Julian asked what, I said, “I have a young friend, Steve, a lawyer in his early 40s. He recently got married, but before that, he had the hardest time meeting someone. In fact, before meeting his wife, he had never managed to get a serious relationship going. And it wasn’t through lack of trying. He dated a lot and had always been anxious to marry and start a family. Amongst our group of friends, he was known as the most eligible bachelor we knew; everyone seemed mystified as to why he continued to remain single. One afternoon a couple of years ago, I sat down with Steve and listened to him complain about his difficulty meeting someone. Weren’t women dying to meet someone like him? During that conversation, he told me that if he met someone he liked, he would usually ask them to marry him right away.”

Julian laughed, “No wonder he couldn’t find anyone.”

When I asked Julian to explain why, he answered, “Obviously, women thought he was crazy and desperate.”

I agreed, then said, “Steve didn’t understand the difference between valuing long-term relationships and proposing marriage. He thought that because his dates wanted to find a husband, they would respond favourably to someone asking for marriage. Instead, his dates saw his proposals as an expression of his desperation, not of his values. Another way of looking at Steve’s approach is to see that he didn’t understand the difference between showing and telling. It’s certainly important to communicate your values to someone you are interested in, but it’s far more effective to show those values than to tell them. That’s what romance is all about. All the things normal people do when they date — body language, sending cards, flowers — all of these things are ways of showing that you value something more serious. That’s what romance is — showing. Essentially, Steve took all the romance out of his relationships. I advised him to start putting it back in — and obviously, it paid off for him.

“Unfortunately, like Steve, I think you’ve taken all the romance out of your client relationships.

“Bruce, a top advisor I know, actually talks about romancing his clients. When he gets a client, he truly does keep them for life, but he never tells them directly or indirectly that he won’t work with them unless they commit to a long-term relationship. He lets that relationship evolve. Successful daters know that all they need to do is get to the next date, and that’s what Bruce does. He continues to earn the right to proceed at each stage, never putting too much pressure on his prospects or overwhelming them.

“Long-term relationships are a buzz-phrase in our industry these days, but many advisors misunderstand the significance of this phrase. Long-term relationships are a measure of success for an advisor, but they are not what the advisor sells. Clients don’t buy long-term relationships. That’s not what they are looking for, they are looking for solutions to their problems, and if an advisor can continue to solve their problems, they’ll gladly stay with that advisor over time. Advisors like Bruce, who understand this, are the ones who are most successful at keeping clients for life.

“One point of difference between your approach and what someone like Bruce would have done is how you presented your comprehensive plan to Yvonne. I don’t doubt that your plan was right for her, but you made it seem like an all or nothing option for Yvonne, and she simply wasn’t prepared to make that kind of commitment so early in your relationship. By contrast, Bruce understands that he has to prove himself and gradually increase the depth of the relationship over time. He will make a judgment call as to what the prospect is ready for, but generally, Bruce will begin implementing smaller scale solutions first.”

Julian agreed that his approach was probably scaring prospects away.

Over the next few months, he tried a new approach with his prospects that focused on building trust and earning the right to proceed. Instead of acting as though he were selling long-term relationships, he concentrated on showing his prospects how he could solve their financial problems. But he made sure not to put pressure on them and instead focused on implementing the solutions they saw as priorities.

Ironically, by taking the concept of long-term relationships out of his dealings with his prospects, Julian found it much easier to turn prospects into clients he planned to keep for life. After six months with this new approach, Julian saw his revenue grow by over 25%.

Lessons Learned

Julian learned four important lessons about long-term client relationships

• Telling new prospects you want to keep them for life is like asking someone you don’t know well to marry you
• Advisors don’t sell long-term relationships. They sell solutions to problems
• Client relationships evolve naturally over time so long as the advisor continues to be of value to the client
• The best way to build long-term relationships is to ‘romance’ your client, ensuring that you are constantly earning the right to deepen the relationship.

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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.