Do You Really Know Who Your 'Best'​ Clients Are?!?

Coaching financial advisors for over 20 years has been an amazing journey with many stories shared by my clients with me about ‘bad’ clients.  Many of these clients were indeed mean, hard to work with and very demanding…they literally were bad.  However, some of these so-called bad clients (usually relatives or friends) were actually great clients even though they didn’t produce (individually) the most revenue of the ‘great’ clients that their advisor had.

You need to know the answer to the following question:  Who is your best client?  

Trick question, I admit.  Of course, you can counter with “by what standard”?  Today’s ‘Can I Borrow Your Car’ newsletter is about identifying your best clients from a referral context and quite possibly revolutionizing how you determine which clients are bad or good from a revenue perspective.

Time for some quick math.  How do you measure/assess the total value of a client to you/your firm?

Here are the metrics you need to consider:

  • First year revenue
  • Ongoing annual revenue
  • Cumulative revenue

I see numbers from 1k to 10k for both lines.  Here is the next metric you need to know:

  • Average length of client engagement (how many years do you keep a client on average).  This is a question that I rarely see accurately (a) measured and (b) understood and/discussed.

You aren’t done yet.  If you are a moderately decent advisor you are going to get referrals every now and then (usually of the accidental/surprise variety) and we need to factor those in:

  • Add up the total cumulative revenue from each referral that the client has given you that has become a client.
  • I also strongly encourage my financial advisor coaching clients to also get an ongoing/annual revenue number.

I don’t have to tell you how valuable this information is, but do you already measure this?  The chances are no, if you are telling the truth to yourself.  Here is why this is so important.

Referrals are about wisely investing a limited resource:  your time.  

If you can’t identify, accurately and with complete confidence, who is worth your time you will never get the most (a) financial rewards and (b) emotional satisfaction and confidence.  Quite often, coaching clients of mine aren’t actually aware of their most valuable clients from a revenue standpoint.  They focus on the clients with the biggest amounts of assets (often these are important), while forgetting a ‘smaller’ client that when you measure everything they have brought to the advisor is massively more significant from a revenue AND enjoyment factor than that ‘large client’ that has never successfully referred new clients.

Rarely is a client that has referred multiple clients that produce desired revenue someone that my advisors don’t enjoy working with, but they also often aren’t focusing enough on them.  

Referrals are more about action than potential.  If you are already past the survival stage of your career/business you are at least partially aware of how precious your time and energy are to you and your family.  Just like with your work with your clients investments…you need to identify the winners and losers.

A plain truth:  clients that have referred to you are far more likely to refer to you again than anyone else

Would you be interested if I told you that you could get all the business you need from your top 20 clients?  That, quite possibly, you could focus 90% of your growth strategies from your top 10?

Diversification is vital in both financial investments and referrals.  However, if done blindly and at too large of a scale we know that the results will be compromised in both arenas.  You need to make sure that you have the right mix of referral sources from clients and COI’s and you have to KNOW which ones are proven producers.

If you get anything from this newsletter (I certainly hope you do!) I hope that you are more confident about what you can do to improve in the near and distant future. I get to work with other successful professionals like you every day and am blessed beyond measure as a result. You are capable of more AND you are able to enjoy the process of working towards it as well.  

You can have success and a life that is full of joy. You do need to do some work to make that happen and to keep your life aligned (throw out that trash talk of work life balance…complete and utter nonsense).

What makes you most alive?

What really matters to you?

Why aren’t you doing that as much as possible?

Those three questions are 100% relevant to getting predictable referrals. This is because when you are the most alive…you are the most referrable. People want to introduce people that are enjoying their lives, especially financial advisors, to other people. Your BMW or Porsche isn’t going to make them want to refer you, but your passion for life will do nicely.

Related: Increasing Results and Lowering Risk via Different Referral Introduction Strategies for Financial Advisors