One of the fundamental keys to a successful wealth management or investment advisory company is how to leverage profits and expansion. When an advisory business begins to add additional staff, it often begins to accelerate its expansion efforts. But how do they get this much-needed edge? Many times the answer is simple: By taking advantage of opportunities like Leverage Part 1 below.
Leverage Part 1: What is it and why does a company need to do it? Leverage Part 1 gives the adviser the unique opportunity to position himself or herself for future success through multiple, smaller deals that connect with existing clients. Rather than trying to convince a large client to work with them, an adviser can instead convince a small company that they should work with an advisor. When a company with which the adviser works on a regular basis already knows that an adviser is a good fit, it’s far easier to obtain new business. And with so much competition in the financial advisory field, an existing client can gain leverage simply by making the decision to provide you with a potential new advisor.
Leverage Part 2: What does each of these transactions cost me? Building leverage doesn’t just mean getting more work done; it means working smarter. Rather than trying to convince a large client to work with you, if you can make a single referral, you may be able to leverage the extra work you do by making that referral free. In some cases, you may even get a client who will then tell several friends and family members about your great work. Even small referrals can create significant amounts of additional work for you.
Leverage Part 3: What does each of these transactions cost me? The third strategy for building leverage relates to the expense of each transaction. When you work with small clients over multiple deals, it becomes more affordable to obtain each transaction without expending a lot of time on it. This approach is especially helpful if you often have to go above and beyond for a particular deal, making multiple contacts and corresponding with clients on multiple fronts.
One example of using clients’ recommendations to obtain work involves getting a referral from a current client. If the client has recently hired a new marketing executive, she may give you her recommendation. If the client has been happy with your services in the past, she may share this information with several potential employers, all of whom may use her recommendation.
Before you start sharing your recommendation with anyone, make sure you are fully aware of the person’s history. Have they previously worked with a similar firm? Has the previous employer done a good job? What are their strengths? What areas might this new person or company need additional assistance in? Be very careful not to provide too many recommendations; you don’t want to be seen as “pulling one over” on your new client.
If you already have some work lined up with a potential client, but you’re nervous about completing the work on time, you may want to ask for some input from the client prior to starting. Have the client provide you with a list of questions or requests that they would like to address to you. You will then have an idea of what areas you need to focus your attention on. For example, if the client wants to hire a consultant to handle their direct mail efforts, you will know that you need to stay on top of the project and ensure all of your tasks are completed on time.
Building leverage takes time and effort. It’s something that is sometimes more effective if you don’t actively try to gain clients’ recommendations. However, if you consistently do follow up with prospective clients’ recommendations, you’ll find that you have a lot more leverage and can even turn them into loyal customers. This way, you can gain the business of everyone you have recommended, as well as gain referrals from new clients. Remember to keep all of these aspects in mind when you build leverage.