Do you think a point of view is important? Clients are looking for advisors with a point of view, and we will need to challenge theirs when they are not being realistic about the challenges they are facing or the opportunities they are missing.
This blog is the fifth part of a series meant to outline the Four Building Blocks to Move to Advisory Services.
How do we become more advisory for our clients? How do we become more relevant and valuable to our clients? I think there are four foundational building blocks we each need to be relevant going forward. We’ll discuss the final building block today: COLLABORATION.
Collaboration encompasses both internal and external collaboration. For us to deliver today, it is the collective wisdom of our teams that makes us distinctive. Collaboration with the client is a given if we are going to truly be advisory but it takes on a new level of engagement. Discussing “What’s Possible?” and redefining reality requires collaboration skills.
Truthfully, many of us are simply more comfortable reporting on facts or a compliance issue. We find it hard to share a point of view different from our clients or even each other. This is a great time to reflect on Patrick Lencioni’s book Getting Naked that we discussed in the previous blog on Confidence.
Recent market research confirms these four building blocks including collaboration are essential to winning new clients, retaining clients and growing our business.
Based on recent surveys by Hinge Marketing, being relevant has jumped 10% to almost 40% of clients view this as the number one factor in picking an advisor. Surpassing relationships is a close second, but this is a 33% surge since 2018 when we wrote this first blog. So if we are not relevant, we very quickly lose a majority of the market place and as always, when you are adding value, it always gets us on the sideline.
Complementing this 33% surge in relevancy in two years, client loyalty has dipped from 2013 at 71% to 2020 at 56%. Clients simply are not as loyal as in the past if we are not solving their most urgent and important problems. Uncertainty is a big problem.
Co-creating a path forward, co-creating a futureview with clients creates a stickiness that we need to remain relevant. And, it takes lots of our traditional services out of the commodity bucket.
Here are seven specific benefits of collaboration to consider:
- Broadens Relationships with Client C-suite. When we collaborate on sophisticated “What’s Possible?” challenges and opportunities, it leads to interactions with influencers and decision-makers that otherwise we would miss.
- Increase Client Loyalty and Retention. It’s pretty simple, if we become the advisor talking about relevant and complex issues, clients are having a hard time finding those advisors. We become the go-to advisor. The stickiness increases as research shows that revenues go up exponentially when we deliver collaborated solutions and strategies.
- More Innovation and Creativity. It goes without saying, and research is revealing, from patents to strategic direction, collective wisdom dominates results and leads to more innovation and creativity.
- Risk Management of Client Relationships. Single-threaded clients tend to be self-fulfilling prophecies as we hear the client is not interested in this or that. They are not investing any money right now. Assumptions are risky and usually a symptom of the fears we have discussed before. Today, client relationships should be maintained by a team focused on the client’s future.
- Grows Team Wisdom and Experience. We are not growing leaders fast enough and it is the collaboration as a team member that provides them with so many insights and the wisdom to grow faster.
- Grows Profitability. Not only does it grow existing client revenues which have higher margins, it helps with retention, therefore, provides for overall growth of the firm versus churning. Churning of clients is extremely costly.
- Distinctive in Market. It’s simple, not everyone is going to move far enough away from their comfort zone to be a collaborator who helps shape the future view of clients.
Many of these insights are pointed out in the book Smart Collaboration by Heidi Gardner. It is a great read on the benefits and challenges of collaboration in knowledge-based firms. Heidi is a former McKinsey consultant and Harvard Business School professor, now at Harvard Law School. Her research on some law firms demonstrated that revenues tripled in a client relationship when you collaborated on at least two disciplines or areas of expertise. She also determined in her client research that when we are serving with a single expertise, the client, even if complex, tends to make it about price or sees it more as a commodity. On the other hand, when we provide strategic collaboration with our team and with them, they are absolutely more generous with fees.
Our opportunity is to be intentional about building our skills for collaboration. Role-playing is so valuable when preparing for big meetings and big presentations. Practicing, though it can be uncomfortable, makes us better. Did you know that 70% of adult learning is experience and experimentation? Bottom line, what clients are needing and asking us to elevate our collaboration and strategic vision beyond our historical roles involving technical issues, transactions and reporting.
As leaders, let’s generate the sense of urgency to move to an advisory services mindset. Let’s call out complacency and understand that we will never change anything we continue to tolerate. Let’s take responsibility for driving education and constant conversations that lead to team members making a mindset shift towards advisory, building our anticipatory skills, leading our clients with confidence, and collaborating on “What’s Possible?”
When we do these things, we are not simply providing advisory services— we are true business advisors.