Discovering and articulating your unique value proposition is challenging for advisors, especially when people think we all do the exact same thing.
We recently attended a two-day coaching course on the challenge of knowing and pricing your value. Here’s what we learned.
Tell a story
One way to articulate your value to a prospect is to tell a client success story that the prospect can relate to. For instance, we work with a lot of business owners. One of the stories we tell is of a young couple who own and operate a small business. When they first came to us, they were stressed about their financial and personal situations. They were in the process of moving, they had a young child who had some health problems, and their business kept them so busy that they didn’t have time to deal with any of these issues properly.
After sitting down with them, we outlined our process, which involves five steps: consultation, collaboration, communication, prescription and check-up. Our process is designed to sound like a trip to the doctor’s office so it’s easier for clients to relate to. After consulting and collaborating with the couple, we communicated the most important item to deal with—finalizing their move and sorting out their mortgage and financing. We prescribed internal and outside experts to take care of the task for the client, and it was resolved successfully.
Since our process is circular, it never ends; we’re continually checking up. We are now the first point of contact for them on any question related to money or their business, and we know that we’ve been able to reduce their stress and provide a great deal of value to them. When we tell other business owner clients this story, they connect with it and understand the value we’d provide them.
Set your price
Another thing we learned is that price is inherently tied to value. One of our colleagues said, “there is no such thing as too high a price, only an absence of value.” We like this quote because it correctly frames the discussion for advisors. If you’re providing a lot of value to your clients, then you should charge more for it. When clients see their lawyers or accountants, they rarely seek out the lowest-cost option. In many cases, they want the most expensive expert because that signifies they are the best in their field. Wealth management should be no different.
On the other hand, if you’re not providing a lot of value to your clients, then you should be worried about regulatory changes like CRM2 because it’s going to become easier for clients to figure out they’re not getting what they pay for.
And even if you are providing a lot of value to clients, you won’t be able to charge a high price for it unless your clients know what you provide. This is where communication and being able to connect with your clients is important.
Some advisors are more naturally adept at connecting with their clients emotionally, but anyone can do it. You just need to demonstrate that you care about them as clients. For instance, ask questions and spend time listening to what’s important to your them, rather than talking about products. If you genuinely do this, your clients will understand that you do care and you’ll form a stronger relationship with them.