In competitive spaces like ours, the temptation to achieve growth at any cost is powerful.
That doesn't have to mean doing something nefarious or unethical. Little compromises, like taking on a client who isn't a good fit for your practice, can add up to big challenges for your business.
(Related: Embrace Confrontation)
While you may generate revenue from a problem life insurance or annuity client in the short term, the long-term outlook is not so positive.
If you have not given much thought to the importance of client-advisor fit, here's why it matters:
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Problem clients will sap your energy and your resources as they often take more energy and hours to serve than clients whose personalities and work dynamics fit with yours.
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Problem clients are also a strain on your people, which means that you could fit the strengths and dynamics of your team at risk if you continually exposing them to abrasive or frustrating behaviors.
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Clients who are too small will not generate enough revenue for the energy you put in while clients who are too big will strain your business since you may not be equipped to adequately serve them.
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Clients who are outside of your specialty are unlikely to refer you to clients who are within your speciality, and the more clients you accept beyond your specialty the less specialized your focus becomes.
All of these factors can lead to lost revenue. That initial revenue boost you get from a less than ideal client will eventually get washed away by the stress, frustration, and additional resources you pour into serving a client who doesn't align with your business's strengths and values. We have all been in the office when "that client" calls. You see your team cringe at the name on the caller ID, and you get a pit in your stomach as you brace for the conversation you're about to have.
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That's a drain on your energy and can poison team culture and morale.
And to be clear, this isn't just about avoiding "ugly" clients (as one of our colleagues calls them). This is also about saying no to perfectly friendly prospects if their business is simply not a match for yours.
The resolve it takes to keep your focus on your target prospects is important, but we typically see advisors struggle to effectively evaluate prospect fit well-before resolve is an issue. Consider the following suggestions:
1. Look at how your relationship started.
The dynamic of the sales process is a good indicator as to how the rest of the relationship will play out. If a prospect is combative and difficult to communicate with during the sale, he or she will likely continue that theme through the rest of your relationship.
