Advisor Products Inc.

Translating Good Ideas Into Action

Spenser Segal — Thu, 30 Apr 2009 03:08:00 -0400

By Spenser Segal, ActiFi CEO

I was at the FPA Business Solutions conference last month and thought that it was an excellent conference. There were many informative speakers who shared some very practical ideas. One thing I kept thinking about was how advisors were going to actually execute and leverage these ideas and concepts to bring value to their clients and their business.

When working with clients, we use the following model to help our clients conceptualize how to look at information and good ideas. The model is as follows:
Data => Information => Knowledge => Behavioral Wisdom

This model has been used in many forms. The most useful way to use the model is to understand the challenge of moving from the left to the right, with the biggest gap being moving from Knowledge to Behavioral Wisdom. There is an overabundance of data and information floating around and it is impossible to process it all. What remains difficult, but nevertheless achievable, is people’s ability to change their behavior and adopt new behaviors in a consistent and effective way.

What struck me at the conference was how much great information and knowledge is available to advisors and how little of it is effectively implemented. One of the things that I am personally committed to and want to see happen is for more advisors to adopt powerful ideas and information into their practices. In this difficult environment, it is critical for advisors to build better businesses and deeper client relationships. Now is the time to adopt this model and focus on developing behavioral wisdom so that the proven concepts and ideas actually benefit our clients and all the advisory businesses out there.

In order to effectively do this, advisors need to recognize how difficult human behavioral change is and balance the resources they allocate to implement new ideas. Many times advisors buy a new software package or instruct their staff to implement a new idea in their business, but do not spend the time to understand the impact on their processes and more important, the impact on individual employees’ job responsibilities.

A balanced approach to implementing new ideas involves spending approximately equal amounts of time on evaluating and purchasing technology or the idea, documenting and understanding the impacted processes, and change management as it relates to the specific employees who will be impacted.

Helpful Business Web Site

Spenser Segal — Thu, 02 Apr 2009 20:18:00 -0400

Sam Richter guest-blogging for Spenser: I'm SVP/Chief Marketing Officer at ActiFi. One of ActiFi's divisions is our Prospect/Client Intelligence program where we help advisors find information to be better prepared for meetings, to help make great first impressions, and to provide ongoing value beyond planning and investment advice. You can learn more at www.actifi.com/ci

We locate information on behalf of our advisors using Web search secrets that we teach in our "Put the Relate Into Client Relationships" Training Program. You can learn more about the program and download free power search tools at the CI site. We have thousands of users of our program, and I receive quite a few notes from advisors on how valuable the tools are, and the sites that we recommend. So I thought I would start posting some of our favorite resources in the ActiFi/Advisor Products Blog so more advisors can take advantage of helpful online business information sources.

Today's ActiFi CI Featured Site:

www.pipl.com

Pipl is a people search meta-search engine, meaning it's searching other "people search sites" to deliver results. Just enter in a person's first and last name, and usually the state where the person lives is all that is needed (you can also search by email address, phone number, or username/screen name). The search results include pictures of the person, public record information, social networks the person may have, blogs where the person is featured, Web sites where the person is mentioned, and even documents like PDF files where the person's name is found. It's frankly a bit scary.

The results can be overwhelming, especially if the name is a more common one. And you'll need to have some knowledge about your person so you can scan the results and know which results are about your selected person, versus results that may be about someone else with the same name. My only wish is that you could add additional phrases or words during your search, e.g. a company name, job title, etc. so your results would be more limited and more relevant. Even with that shortcoming, however, I find Pipl to be one of the best free people search engines available.

The only other negative you'll find is that it can be a bit addicting, so make sure you have some time available before you first give it a try.

Over- vs. Under-Engineering: Configuring the workflow functionality of your CRM

Spenser Segal — Wed, 12 Nov 2008 00:24:00 -0400

The Scenario
With the increased volume of client calls and concerns to address, an advisory firm’s staff is getting worn out trying to fit more hours into their days. The advisor appreciates the extra effort everyone is making, but putting more hours than usual into the same clients isn’t going to be a viable long-term solution. They need to work smarter, not harder. The team knows their CRM system is capable of much more than they’re currently using it for, and that a few changes could simplify many tasks, but if they didn’t have the time before to sit down and figure it out, they sure don’t now.

Process Definition in Action
We recently went into an advisory firm who wanted to gain efficiency and consistency in their client service by embedding their processes on their CRM system. Since step one is defining their client service processes, we decided to conduct a little exercise. We gave everyone a sheet of paper and a pen, and asked them to write the words, "Defined Process," along with their definitions of the words.

Then we asked them to select a client-facing process that they all could agree was pretty well-defined. After some back-and-forth discussion, the group selected Client Onboarding.

We asked them to describe at a high level what that process consisted of, and then draw a picture of the steps involved. When they looked at each other's drawings and saw how many different perspectives there were, they realized that they really were working from different understandings of both their clients' experience and each other's roles in the process. Even their definitions of the words, "Defined" and "Process," though similar, were different enough that the team realized they were approaching the concept from many different angles. At this point, it was clear to all that their next step was to agree on a shared mental model of the defined Client Onboarding process, and more importantly, to draw the picture that tied it all together.

In our interactive, hands-on Process Workshop exercise, we put different-colored paper shapes representing various tasks and activities up on the wall. People got up and moved them around, adding and renaming pieces as needed.

Then, with guidance from ActiFi consultants, the team organized their tasks and activities into various levels of detail, defining triggers, timeframes and dependencies. This is the part where it gets fun.

There was a lot of debate as to which steps in the process should actually be considered a task, as opposed to an explanation clarifying a task, or maybe even a whole new process of its own. How do you actually break down tasks to the appropriate level of granularity? How do you get visionaries and bean-counters to agree on what level of detail is really needed?

The debate continued until all were satisfied that we had a well-rounded and thorough representation of everything that happened when a new client signed on with the firm. Then this initial definition was followed by a series of iterations and validations, as we took what we gathered on these pieces of colored paper and turned it into a diagram representing the process. Now that there was actually a shared picture, we were able to break down each step into the kind of detail that allowed us to translate the process into a set of implementable software requirements ready for encoding into the firm's CRM system.

Finding a Healthy Balance
When it comes to process definition, we've seen some extremes.

On one end of the spectrum, a firm can become obsessed with process for process’ sake, and forget why they got a Customer Relationship Management system in the first place – to enable them to better serve their customers! Defining client service processes requires thorough thinking, but there’s a difference between thorough and obsessive. When every single item your staff can possibly think of becomes a task, so people practically have to check a checkbox to show that they checked the checkbox, triggering an email alert for their supervisor to approve that it got checked (okay, not really, but you get the idea)…you have nothing more than systematized micro-management! Employees' inboxes and task lists become overflowing with both time-sensitive and redundant tasks and alerts, so it's hard to tell which is which, and even the most efficient and industrious of them eventually give up and go back to their old faithful post-it note systems. Not only did the rollout fail, but future attempts to revive it are likely to be met with skepticism, making it difficult to gain a return on your CRM investment.

On the other extreme, a firm can take such a high-level approach that no additional efficiency or visibility is even created. Activity and data is recorded inconsistently at best, because a) only some of the staff even use it, b) of those, everyone does it differently, and c) there are no specific reports being generated to show where gaps are occurring. When employees’ task lists are full of general activities like “get referrals” and “prepare forms,” they have no way of knowing which ones to start with, or when they’re done. Ask whom for referrals? Prepare which forms, for what purpose? Employees get used to overlooking the tasks that can’t really ever be checked off as completed, learn to ignore CRM reminders and revert to their own systems, and again, the CRM workflow is all but ignored.

What's the Answer?
As with everything worthwhile, there’s not one easy answer that will work for every unique combination of skills and personalities in every firm. However, an answer can be found that works for you if you know what you’re looking for – a healthy balance of guidelines, accountability, and time-saving shortcuts that enable you and your team to accomplish your business objectives according to your shared values and principles. If you haven’t yet defined these, it’s a good place to start. Evaluating decisions through a shared mental model or "grid" helps eliminate personal agendas and subjectivity and enable a factual, objective view into your processes as they really are, allowing you to see how well-lined-up your theory is with your practice. This will give you a clearer view of your strengths and differentiators, as well as where your gaps and bottlenecks are. Then you can determine which changes could make the most substantial differences in both your employees' and clients' experience.

With the end goal always in mind, the question of "What are we really trying to accomplish here?" should help alleviate differences of opinion on how much detail is needed. If you're trying to create a self-contained interactive user manual that any new employee in any position can follow with little or no instruction from other busy staff members, you'll need to agree on (and budget for) a deeper level of definition than the firm that "just" wants to make sure each client meeting is prepared for, presented, and followed up in the same way, by every advisor, every time. Unless you're a sole proprietor (and sometimes even then), you know this is no small feat either!

CRM: Business Strategy or Technology?

Spenser Segal — Thu, 06 Nov 2008 07:56:00 -0400

Many advisors and other businesspeople talk about their CRM software so often that they have stopped thinking about what it stands for, namely Customer Relationship Management. But if you set aside the software context for a moment, that phrase looks far more like a business strategy than a technology. So what is CRM, really?

It’s a Business Strategy

A key limitation of technology is that it is only as good as the business improvement it drives and the readiness of team members to use it effectively. For an example, look no further than a motorist who paid extra for four-wheel drive in their car without ever using that feature or even knowing its purpose. The point of CRM is not to have advanced technology capabilities for their own sake but instead to deliver a client relationship experience consistently and profitably.

As a business strategy, CRM is about systematically embedding best practices and powerful ideas into the way that a firm does business, so that a consistent high-quality experience is delivered to every client, every time. A CRM strategy is working if the principal can take a six-month safari in Borneo, and a junior advisor can fill in capably for her while she’s gone. In order to make this happen, that junior advisor would need to have access to the knowledge and thought process that the principal goes through, in all types of settings.

The first step in developing a CRM strategy is to define a client experience that works and is right for your clients and your firm. Remember that “client experience” is shorthand for a wide variety of cases, e.g.:

A meeting with an ultra-high net worth individual involves very different preparation than one with a middle-class retiree.
Establishing a relationship with a family of five will require one type of client acquisition process (meetings, marketing materials, communications, and so forth); doing so with a small business investment committee will require another type of process altogether.

The second step is to decide how to deliver that experience. This starts with being able to define the experience at a level of precision and detail that makes it executable. Many advisors believe they already have a defined process. Suppose, however, it was a new employee’s first day on the job: Would the new hire be able to successfully follow the process – e.g., deliver the exact results that the advisor expects – independently and with minimal supervision? To make sure this happens, you will need to document answers to more specific questions. For example: Which roles carry out which tasks? How are team members to communicate with each other and with the client on each task?

The third step is to determine how to execute on the client experience scalably and profitably. This is where technology inevitably enters the picture.

Yes, It’s Also a Technology

One of the biggest mistakes we see made by advisors in selecting CRM systems is what we call the “check the box” mentality: when evaluating CRMs, create a matrix that details which products have which features, and then choose whichever system has the most features. This is a flawed strategy, as it represents the same logic used by the car buyer who buys the unnecessary four-wheel drive.

A more sensible approach is to consider your unique client experience, then determine those CRM software features that you need in order to deliver that experience in a systematic way. For example, if you have a large staff that requires close coordination, then robust workflow and notification features are a must. Once you have identified the features you will really use, then you can do a more focused cost-benefit analysis.

The key is how well the CRM technology enables the business benefits that you defined as part of the strategy, not how many bells and whistles it has. Therefore, each firm will weight various capabilities of a specific technology differently, and those priority weightings will drive the right decision.

What are the benefits?

The specific benefits of CRM (both as business strategy and as technology) will depend in large part on what your client experience is. But some benefits are universal to a well-executed CRM strategy:

An increase in the value of your business. A systematized business commands a higher multiple for valuation purposes.
An enhanced client experience. Your practice will be able to deliver more value for the client’s dollar.
Greater efficiency and productivity. You and your staff will be able to deliver more value per hour of work, and have more time to spend with clients and prospects.
More effective delegation and resourcing of work. Client-facing staff will be better able to focus on high value-add activities.
Benefits for marketing and client acquisition. A defined process that is consistently delivered creates a competitive advantage.

Lemons Into Lemonade

Spenser Segal — Fri, 24 Oct 2008 10:04:00 -0400

In the current environment of unpredictable markets, you may be fielding frequent calls from worried clients – and experiencing more than a little worry, yourself. Here are some areas of focus, for maintaining the confidence of existing clients and for finding new clients as well.

Communication
Your task is to reassure people that you understand the significance of recent events, that you empathize with their concerns, and that your advice is (if anything) more important than ever. Reach out to all of your clients via newsletters, personalized emails, Web bulletins blogs, or other media. I also encourage you to share your message with prospects and other investors who are concerned about their financial situation. Your clients trust you and want to know your overall opinion of the financial crisis. Remember to avoid jargon, maintain a positive and realistic throughout your communication, and limit references to other “experts” – especially those who are already in the media. Use your own voice.

Along with mass communication, you should also proactively contact your clients, via phone or face-to-face meetings, with a personalized interpretation of today’s market environment. Many clients have seen a decline in their portfolio but nonetheless are still on track toward their goals, requiring only minor adjustments. Others will need your help in revisiting their financial plan. If you identify and talk through a change process with concrete steps, then the client will be empowered to act instead of feeling helpless. Make sure you review past plans, so you can reinforce your earlier objectives and adjust if necessary.

Financial Planning
For advisors who provide planning as a fee-based service that is separate from investment management, the crisis is in fact an opportunity to create premium value for clients. The careening up-and-down markets are beyond your control, but helping a client to plan for the “certainty of uncertainty” is well within your control. Be sure to stress this component of your value proposition in client communications.

Of course, not all advisors currently offer separate fee-based planning. Unfortunately, I cannot say that now is the ideal time to introduce new fees to clients, at a time when so many of them are likely struggling. However, you can make plans to introduce separate fee-based planning in the future. Investigate this idea, as it represents a revenue stream that is tied to controllable value rather than the market.

“Crunch-time Referrals”
The crisis also represents an opportunity to reach out to many investors who either (a) don’t have an advisor at all or (b) have an advisor who is unable or unwilling to change along with the client. Referrals are more important than ever as a means of communicating your value proposition – but how you explain that value proposition matters. The standard recommendation (“I’m happy with my advisor; they do a good job for me”) is not a crunch-time referral. Here is a crunch-time referral:

“I had the same concerns you did about the market. I am working with an advisor that has a defined process. We set specific goals, measure progress against each goal, and quickly account for where the gaps are and how to respond. In fact, only one of our three discussions each year is specifically about my portfolio; the rest are about my goals and how I can plan for the unexpected. I sleep a lot better at night knowing that we are prepared for a wide variety of scenarios.”

Anxiety and emotions are high these days, but your confident presentation of a well-defined planning process – one that addresses all market environments – is exactly what prospects need to hear today. Make sure that you’ve documented your process in an easy-to-understand manner, and consider using work-flow charts that graphically illustrate your decision-making process. This logical approach will help alleviate some anxieties and position you as a trusted advisor. Remember—keep it simple.

Conclusion
By communicating with clients, reinforcing your process-based value proposition, and enhancing referral opportunities, you not only can retain clients in this difficult environment but in fact can grow your business.