Oct 8 '12
Gillian Tett, assistant editor of the Financial Times, put it rather bluntly the other day: the Eurozone remains under profound stress.
Of course we’re all feeling it in some way or another, but professional services firms are getting hit particularly hard – that’s accountants, estate agents, consultants and lawyers.
At the heart of their difficulties has been a change in client behaviour and the resulting need to adapt… not something we have, historically, put at the top of our list of talents.
It’s not just us saying that; the FT recently produced a research paper, available here, which said that a revolution is underway in professional advisory services, driven by a radical shift in the needs and expectations of clients.
What are these changes in client needs? To put it simply: as economic uncertainty persists and regulatory burdens increase, clients are demanding top-drawer service at lower prices.
As a result the traditional client-advisor relationship is changing. This throws up real challenges to the advisory professional: how can they meet the new client needs whilst maintaining profitability and growth?
Ultimately, to meet these changing needs, advisors must exercise and exhibit strong management, invest in advisor training and project management tools, they must know the clients they serve… intimately… and finally, they need to provide a broad suite of added-value services.
On this occasion we want to look at how advisory firms are delivering added-value services.
Reviewing the FT research paper it comes as little surprise in the context of these testing economic times that 74% of CEOs expect more added-value extras from their advisory firms.
However, and with a measure of surprise, advisors are failing to properly articulate the added-value services they offer and as a result there’s a large awareness gap between the added-value service range and the client. In short… you’re putting in all the effort but your clients don’t know it.
This awareness gap between product and client was confirmed by strong quantitative data: although 56% of advisors offer knowledge briefings, only 38% of clients are aware of these; and while 49% of advisors provide free seminars, only 29% of clients know that the service is available; similarly 48% of advisory firms offered regular independent client feedback, however only 30% of clients knew that this added-value service was available.
There was, on average, an awareness deficit of 15 and 20%.
The FT research paper further found that of the added-value product offerings, regular client feedback, account planning and access to learning and development networks were regarded by clients as being most beneficial to improving the total added-value client-advisor experience. Furthermore, it was found that advisors see great reciprocal benefit from these service offerings.
From the FT survey it was found that account planning and feedback are seen as tools that empower the client to shape the strategic trajectory of the client-advisor relationship. It was also recorded that clients enjoy these tools as they bring a single point of contact. They are understandably important to advisors in helping them to better understand the client and what they really value.
Added-value services are ostensibly a good thing; they’re a win-win tool of business – not only bringing measured benefit to the client but also to the service provider. They enhance the advisor’s value proposition and the client’s experience and at the same time strengthen the client-advisor relationship. So their value to the total business experience is marked.
However the fact that professional services firms are failing to articulate the added-value services that they offer, and which price-conscious clients so clearly crave, is clearly a bad thing.
Firms need to acknowledge the rapidly changing client market and adapt accordingly. This means not only offering added-value services but also fully articulating and marketing these services to the target audience.
Professional services firms can draw a few simple lessons from the FT’s research paper:
- The economy is in trouble and hard data has confirmed that clients are demanding more.
- To gain and retain clients, advisors must provide added-value services.
- Providing added-value services is mutually beneficial: they’re good for the client and for the advisor and they’re great for promoting client-advisor relations.
- However advisors must properly articulate what added-value products they offer; otherwise it’s likely that clients will be unaware of all your good work.
- Advisors should note that the research found that regular feedback and account management are seen as hugely valuable to the client; yet around half of advisors don’t even offer these services.
This article was written by Elephant Creative associate Brian Spencer, working with Helen Hammond.