In this Section:

Actionable Steps to Retain Clients

The beginning of the new year is an ideal time for financial advisors to look back over the previous year and evaluate their business. Typically, advisors examine what worked and what didn’t, and perhaps where things veered off course. There is much truth in the saying “You can’t get to where you want to be if you don’t know where you have been.”

One important aspect of getting a business on the right track is to look at client retention. You must monitor and understand the effectiveness of your engagement with your clients. This will determine the impact on your bottom line and the future of your business. By considering these following steps, you can be on your way to developing a powerful strategy to boost loyalty among your clients.  

[1] Try This Simple Exercise

To get you thinking about the power of client retention, first imagine that you can never take on another client for the rest of your career. How would you change your behavior with your current clients? What would you do to protect the revenue you get from these clients? Write down the answers to these questions. Evaluate whether your answers match what you are currently doing. If you find a disconnection between your responses and your current strategies, identify ways to stay in the forefront of your clients’ minds – such as the ways outlined below. 

[2] Increase Engagement

Here are a few strategies you can implement to provide value and enhance loyalty. Begin by creating an emotional connection through your social media platforms, such as Facebook or Twitter, to stimulate conversation. This is a wonderful opportunity to stay in touch with your clients. You can comment on their postings, stay current with what is happening in their lives and post insightful content yourself. After client meetings, express appreciation with a handwritten note or send a “nothing’s urgent” voice mail/email with a web link on a topic of interest to them. Another way to acknowledge your clients is to keep track of their life events such as birthdays, anniversaries, graduations and weddings. These ways to stay top of mind usually require the least amount of time and effort but can have the greatest impact.

[3] Review Your Client List

It’s critical to look at client retention in order to protect your revenue stream. We need to apply the very same compounding principles we teach our clients. If you improve client retention by only 2 percent each year, it can have a positive impact on your business over the course of your career. An increase of 2 percent each year will add up to a 20 percent difference over the course of 10 years. Alternatively, consider what your business would look like in 10 years if you lost 2 percent of your client base each year. Make sure you are protecting this “investment” and effectively fostering loyalty. We all know that it is much easier to keep current clients than to find new ones.

Many times, clients leave for reasons that are out of our control, such as moving away or dying. Those situations aside, when clients leave, you can’t pretend it didn’t happen. You need to come up with an honest answer to the question “Why did they leave?” Could their leaving have been avoided if you had nurtured the relationship or had been in better contact with them? Take time to review your client list from three years ago and compare it to your current client list. Find out how many clients have left and explore why. It is inevitable that we will lose a certain number of clients each year, but it is important to take the necessary steps to ensure we’re always providing top-notch service to our clients.

By applying these steps to increase your client retention and your revenue stream, you will make 2014 a successful year.

Every day is an opportunity to stay top of mind with your clients, so commit to making changes that will have a positive impact on your bottom line. Your business approach should ultimately drive commitment and engagement among your existing clients and prospects. Being a trusted advisor takes time and dedication. Client dedication should be an integral part of your practice.

Michael Morrow, CFP, is a Certified Financial Planner and MDRT member from Thunder Bay, Ont. He is an international speaker and author of Leading Marketing Strategies and The Picture Sells the Story. Michael may be reached at [email protected] .

More from InsuranceNewsNet