Why should I pay for your advice?
How to create a value proposition that captures the true essence of what you do, a service offering your clients genuinely value and are prepared to pay for.
Transforming your business, moving away from commission towards charging a fee (or Client Agreed Remuneration) is difficult for any business. Not only must you decide on an appropriate fee level, as well as the best way to administer and collect fees, but most importantly how to justify your new charging structure to existing clients, prospects and professional connections.
Advisers across our profession struggle to articulate their value proposition. Your value proposition is an outline of the benefits and value a client will derive from working with you. Previously referred to as a Unique Selling Proposition (‘USP’), although I don’t like the connotation of USP as it denotes what the business is ‘selling’ and doesn’t talk about how you meet the needs of your clients or deliver tangible value.
I want to be clear: your value proposition is about demonstrating your value and why a client should pay your fees. When transforming your business from a sale-focused (‘killer’) culture to a service-based offering (‘farmer’) it is a critical tool for success.
Imagine the power of a presentation that encapsulates all that you do. Your key points of differentiation and areas of speciality. A story engrained in the psyche of all staff, which underpins your business and service offering. Upon first meeting clients, prospects and professional partners instantly understand what you stand for and why they should engage with you.
The advisers I know who have taken time to define and articulate their value proposition are astounded by the impact it’s had on their business:
- Staff are engaged and delivering a consistent message. It’s raised the professionalism of their firm and helped to build the brand.
- Clients know exactly what they’re getting in terms of value, benefits and costs. They understand the business and service offering, making them more likely to refer.
- Professional connections immediately see the benefits of working in partnership to deliver integrated advice to their clients.
- Revenue is more predictable, the business is more profitable, and ultimately more saleable.
Steps for creating a powerful value proposition
When developing your value proposition, remember it’s not all about you. It should focus on the needs of your target client. What are their ambitions, goals and objectives? What keeps them awake at night? How do your services address these needs?
Gather this information by asking those clients who meet your ‘ideal’ client profile. Do this in person or use an online survey tool like SurveyMonkey
. The best way I’ve seen this work is through a client appreciation event. Invite your clients to lunch or another event and openly ask for their feedback. This is a great way to receive honest advice. Your clients will feel privileged you’ve selected them. Once you’ve created your value proposition, show it to them and again, ask for their feedback.
Armed with a full understanding of your client’s needs, how your services meet these and any gaps that require addressing, you can then start mapping out how to best streamline your processes to deliver a suite of services to deliver against these.
Your value proposition should be jargon free and in a language your target audience will understand. It must contain all relevant information including: who you are, areas of specialty, advice process, investment offering, service levels and charging structure. This will give the client or prospect a clear understanding of how you operate, the process for working with you and how you can help them to achieve their business and/or personal objectives. Case studies are great way to reinforce these messages.
A word of warning: make sure you can deliver against all client promises. I’ve seen some firms commit to sending quarterly valuations and newsletters, with no supporting infrastructure or process. Your document should be fluid and constantly innovated. You can always add services and features later. Although don’t ever over promise and under deliver.
You also need to make sure all employees are ‘on board’. That they’re engaged, feel a part of the process and are adequately trained. Developing a proposition at a senior level and simply delivering a finished product will meet with limited success. Make sure you bring all staff in at the earliest stage and gather their feedback so they feel a part of the process.
Launching your value proposition
Once you’ve created your value proposition turn it into a ‘storyboard’ to form the basis of all presentations, website copy, brochures and regular communications. It must become the foundation for all marketing and communications.
Share it with clients and professional introducers. As appropriate, invite their feedback and further refine your messaging.
Consider a client launch event. Invite key clients to lunch or drinks, with a presentation. Ask your guests to bring a friend, colleague or relative so you get access to a larger audience (you might even win new clients).
Arrange one-to-one meetings with all centres of influence and professional connections. Walk them through your value proposition and provide them with copies. In my experience, leaving materials with professional contacts always leads to referrals.
If you want to transform your business from a sale-focused (‘killer’) culture to a service-based proposition (‘farmer’) you will need a succinct and compelling value proposition. This will ensure all IFAs in your business are able to articulate the features and benefits of your new service offering, therefore justifying your fees and helping you to build long-term, remunerative relationships.
Prepared by Abbie Tanner, Director, A Business Innovation
Extract from 'Are you a farmer or do you eat what you kill?', a FREE guide for advisers, available here
Please retweet this on Twitter
Author: Abbie Tanner
Posted: Wednesday, June 22, 2011 | 7:38:00 PM