What’s Better Than Getting New AUM? 

Whats Better than getting new AUM

If you are looking to grow your financial advisory practice, you might think there is nothing better than getting new clients and new AUM. In fact, this might be the primary focus of your business development strategy, particularly if your practice is relatively new and striving to create scale. 

While not diminishing the importance of new AUM, at some point relatively early in the life of a financial advisory firm or practice the importance of retaining those clients and AUM will become evident – often painfully so. New AUM is great, but the old AUM is paying the bills. 

When an existing client suddenly announces they are leaving and that the revenue you were counting on is going away, there are often feelings of anger, resentment, and – worst of all – maybe this could have been prevented. Some questions often ensue: 

  • Did we take them for granted? 
  • Did we oversell them? 
  • Did we fail to identify they would need more feedback? 
  • Why didn’t they understand? 

Sometimes when a client leaves, there was nothing that could have been done to prevent it; a death in the family, or the firm changes it’s targeting. And other times, it is a good thing they leave; they were too demanding, took up too much time, or never were a good fit from the start.  

Inherent in all this questioning and analysis are elements that should be incorporated into both your acquisition and retention strategies. Our topic today is considering how digital marketing fits into your retention strategy. 

When Does the Retention Strategy Kick In? 

Right after the sale closes. At the moment the client signs the papers, the focus shifts from acquisition to retention. And the first thing that must be dealt with is the Dissonance-Satisfaction Continuum. 

Don’t Worry, Be Happy 

If only it were that easy. If you’ve dealt with clients for any length of time you know they have actual personalities, and those personalities will all view the world in a different way. Some clients will look for the absence of dissatisfiers or look for things not to be wrong.  Their worst fears, of which there are probably many, must be avoided. If they discover the reality of what they’ve bought doesn’t live up to their hopes and expectations, or that others don’t think it was a good choice, dissonance sets in.  Once established, like a weed, dissonance can be nearly impossible to eradicate. 

At the other end of the spectrum are the clients that expect things to be great – they are looking for the presence of satisfiers, reasons that validate their purchase decision. The service is as good or better than they thought, they see ads or social media that reinforces the attributes they find important, or they hear good reports from friends, family, or colleagues. 

How the Sale Supports Retention 

As you can see from the two types of post-purchase analysis customers and clients go through, the very first thing for sales to get right is not to oversell. Promising more than will be delivered, whether that’s product, service, or support attributes is going to play right into the hands of the doubters and erode the confidence of those with higher expectations. 

How the Service Supports Retention 

It should go without saying that the service delivery must be flawless. The entire firm must align behind providing exactly the value proposition(s) the customer or client is expecting. Whether you want to call mistakes here unforced errors or shooting oneself in the foot, the point is this is totally within the firm’s control. 

Do You Feel Lucky? Well, Do ‘ya….? 

The well-worn cliché, Hope is Not a Plan, has a cousin: Luck is Not a Plan. Circumstances beyond your control can impact how clients perceive your firm, products, or services. The way to mitigate a bit of bad luck is to build a cushion of goodwill, where the clients can justify to themselves how you do everything else right, this bad luck is just a random thing. The alternative is the deadly “they can’t get anything right.” 

When Do We Talk About Digital Marketing? 

We’re violating our own rules here by putting the important items at the end of the article. But we thought the setup was important. Digital marketing is a great method to share all the messaging to all the different constituencies in your customer base. 

You’ll tell those focused on the dissatisfiers that, no, in fact, those dissatisfiers do not exist. There is nothing to worry about. For those focused on the positives, you’ll reinforce all the good things happening. And for both groups, customer testimonials provide the weight of positive word-of-mouth reinforcement. This is where digital marketing excels, as the relatively low cost of incremental efforts means that messaging for every group can be created easily, and with the right qualification and/or testing, you might be able to determine which clients are in which group. 

And should something unlucky happen, digital marketing will help you address it quickly, thoroughly, and message out that really, it’s not your fault. 

Who Can Help Us Beef Up Our Retention Marketing? 

We can. JQLaCorte develops digital marketing strategies and plans for financial services firms that support all phases of acquisition, retention, and the customer life cycle. Contact us to start a conversation about what we can do for you. 

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