As comprehensive financial planning has become more widely adopted, many financial advisors have felt pressure to find new ways to differentiate themselves by demonstrating their unique value to clients. And while providing fee-only advice or highlighting service as a fiduciary may have once been a fair differentiator, these services are now often considered table stakes, necessitating financial advisors to find more creative solutions that show current and prospective clients that they provide more value than other advisors. However, as more advisors continue to increase the services they offer to enhance their value propositions, the new challenge has become balancing the many services offered to clients (who sometimes don’t really need all of the services offered) with enough time and capacity to show up for clients who truly need help with a particular problem.
In our 103rd episode of Kitces & Carl, Michael Kitces and client communication expert Carl Richards discuss the challenges of finding an optimal balance between proactively providing value and the consistency of simply being available to respond to clients when they come to their advisor for assistance.
Some advisors increase their value propositions by offering a ‘proactive sledgehammer’ of value by inundating clients with all the things they can do for them to emphasize that they not only have them top of mind, but also that they keep them top of mind all year round. Some advisors implement client service calendars that dedicate certain times of the year to tax planning, insurance reviews, or quarterly meetings, and fill the gaps with newsletters, client appreciation events, and regular firm updates. Others use frequent emails to stay in regular contact, sending reminders or helpful information relevant to their clients. Though these can be good approaches to increase touch points and create value for clients, balancing the frequency of these touch points (and the scope of what clients are offered) with the real value that clients actually need and expect is most important. Because while some clients may appreciate and need more frequent communication, others just want to know that the advisor is there when they need them. And while frequent communication may be important with many clients, it is often the most critical in the early stages of a client relationship, when advisors are just learning about their client’s needs and building trust with the client. However, as the relationship matures, clients may build enough trust in their advisor that they no longer expect (or want!) frequent communication, satisfied in knowing that if any financial issues arise, the advisor will be there to help them.
Ultimately, the key point is that while most clients will appreciate many of their advisor’s valuable services and proactive communication, finding the optimal balance between offering too much and simply being available when needed will depend on each unique client. This begins with understanding their needs (and communication preferences!) and gaining their trust. And building trust early on not only helps advisors develop more meaningful relationships with clients, but also helps them save time as they won’t need to spend as much time offering solutions that they know won’t really matter to the client. Which means the advisor will end out with more time to focus on providing better – and more relevant – service with the capacity to be available when a client truly needs it!
***Editor's Note: Can't get enough of Kitces & Carl? Neither can we, which is why we've released it as a podcast as well! Check it out on all the usual podcast platforms, including Apple Podcasts (iTunes), Spotify, and Stitcher.
- Kitces & Carl Ep 101: Where Are All The Proudly Premium-Fee Advisors?
- Kitces Report On What Financial Planners Really Do
Kitces & Carl Podcast Transcript
Michael: Good afternoon, Carl.
Carl: Greetings, Michael Kitces. Michael Ernest Kitces.
Michael: Yes. So, how has conference season been for you? We've been out for a while. We're kind of coming through to the end of the year, probably just past the end of the year by the time folks are hearing this.
Carl: Yeah, it's been busy and fun. It's fun to see people again. Really, really fun. Yeah. XYPN was a blast for sure. Super good.
Michael: Yeah. I feel like there was this shift just the second half of the...the second half of 2022 that just, for better or worse, we seem to have moved past the pandemic and back to pre-pandemic life. Just whatever you do with the pandemic, you've done at this point. And we just seem to have kind of returned to this stable new normal. So, for me, conference season was really nice. Got to be out for XYPN LIVE, for Schwab Impact. Got to visit a couple of different FPA chapters and just felt it everywhere I was out and about that just we seemed to have returned to a new post-pandemic normal.
Carl: Yeah. That's super fascinating just to see what that will develop into. What's that old saying, that people make plans and God laughs?
Carl: That will be interesting to see, what's the things we're not thinking of...?
Michael: That's an ominous way to think about 2023.
Carl: No, in good ways.
Michael: All right. All right. We'll take the good.
Carl: All of the good things that happened to me were not planned. So, I think it's going to be super interesting to see. What I meant was, what does return to normal mean? What's that going to actually mean? Because I don't think it's 100% the prior normal for 100% of the people, you know what I mean?
Understanding When It’s Appropriate To Be More Proactive With Clients [01:55]
Michael: So, in that theme of thinking about coming year and changing our normals, so one of the things that I'm finding is cropping up a lot, we're seeing it in the research we do on advisors, I feel like a lot of it is just out there in the discussion, the advisor world, all this competitive pressure, all these dynamics of basically like, "What are you doing for that fee you charge your clients? No, no, really, what are you doing?" Like, "What else are you doing? What else are you doing?" Because we got to stack all these things on top to justify our value for what we're doing.
And so, one of the ways this is starting to show up is firms building out these various versions of service calendars for clients. I'm a big fan of the approach. I like the approach. And it says, we're going to come up with the things that we are proactively going to do for our clients throughout the year to show our value. Maybe I'll do a capital gain summary report in March to send out to the CPAs. We're going to do a review of your insurance beneficiaries, and we're going to do an end-of-year tax planning meeting in Holistiplan, and all these different items, generally very planning-oriented because we're trying to get away from just the portfolio side of things. Some firms are doing them semiannually, some firms are doing them quarterly, some firms are built out monthly. Not that we're meeting monthly, but we'll give you a check-in on your IRAs one month, and touch base about your employee benefits another month. Things that often we can systematize to some extent with our staff and team support if we built to that point. So, it's not all on us on our shoulders.
And the idea of it is, look, we get more proactive with clients, more touchpoints, more opportunities to show value. Even if we reach out and they don't need anything, we still get credit for the fact that we reached out about the thing. Helps to show value. I had this great question that came in from Meg who had said, "I'm chewing on this balance of..." So, on the one end, there's regularly scheduled proactive client service calendar stuff we do. Look at all the things we do for you every year. Clearly, we're worth this fee. Then the other end of the extreme, if I take the logical extremes, it's like here's my value proposition. When something happens in your financial life, I'm here to help and solve it. I don't know what it's going to be, I don't know when it's going to come up.
We all know if you work with clients enough time, stuff happens. And when you get an opportunity as an advisor drop-in in those moments, you can have life-changing impacts sometimes when people go through big transitions, some of which are not always planned, and a whole bunch of stuff goes in motion and change and a whole bunch of challenges crop up, and it can be really impactful to have a financial advisor there, so much so that you can almost make the case, all the other stuff doesn't matter as long as you do that when you're there to do that.
Now, most advisors I know don't go quite so extreme as like, I'm there when you need me. That's my value prop. I think most of us feel some pressure, got to do something else in between along the way. But it raises this really interesting question of where you draw the balance in between the two? Because in the logical extreme, if you make a service calendar that's proactive enough every month of the year, you will do something for your clients all year long. And if they ever actually have a problem that crops up where they need your help, it's like, "Oh, I can't help you right now." Like, "Sorry, we're in the middle of our January value-adds." Like, "I can't do that. I can meet with you next month. Oh, actually I only have a tiny bit of time next month because we're going to be working on our February cycle." And so, if you get proactive enough, it's like you could be so proactive to clients that you show value out the wazoo until they actually have a problem, and you can't help them.
And so, to me, I don't know where the balancing point is to that, and Meg raised the question to talk about it. She said she's not sure where the balancing point is as well. But I think it's a really interesting dynamic to talk about between this balancing point of, I'm just there when you need me, however often you do or don't need me, and we have a very proactive, highly structured, ongoing client service calendar and we're going to crush you with the sheer amount of value that we're providing on an ongoing basis where you might be so proactive you actually can't be reactive anymore. So, I don't know if that dynamic, that split resonates to you. It really struck me when Meg had reached out. Look, I don't think most people are at either extreme. Like, "I never do anything for my clients unless they call." Or like, "Every hour of my year is obligated." But as a lot of firms are trying to get more proactive on service calendars and the like, I think because we're feeling some of that fee pressure and service inflation effect, it's like the pendulum seems to be swinging towards the proactive. And it's hard to argue against proactive until Meg raised this question like, "Yeah, that's actually a good reason to not be too proactive."
Carl: Yeah. I'm going to give you a list of things and you can decide which one to talk about. So, without diving in, one is Kevin, my friend Kevin, who actually built one of the most successful businesses that I've ever seen in our industry. And his entire business model was service model, entire thing, rapid response to customer questions, client questions. It didn't do anything else. So, he was on the extreme. No anniversary cards, no birthday cards, no regular service, just rapid...He's like, most of you, most of our industry doesn't do that. That's all I'm going to do. Amazing. So, Kevin… Fee pressure and service inflation from who? Who are we actually hearing that from? I'm super interested in that. Are we solving a problem that doesn't exist? I'm curious, given the retention rates that you have. I'm curious. I don't know the answer. I'm super curious about it. Because is this just us all deciding that there's fee pressure and us all deciding that there's service inflation or is that a real problem?
And then the third one, oh no, the third one, which is interesting to me, super interesting is...Oh, and I've seen this with a bunch of stuff. If you promise me that I pay $20 a month and I get a hundred widgets a month, and a hundred is so many, it's just like, oh, I get so many widgets a month, it's amazing, and I repeatedly only use 30, or let's just say I use 50. I use 50 of the widgets and I'm paying $20 a month. There's a really interesting reverse, sort of, psychology thing that happens because it's...I've seen it in businesses we built. We get feedback like, "You're giving me too much value. I'm going to unsubscribe from the service because I'm getting too much. I can't keep up with the value." That is fascinating, right? I can't keep up with the value you're giving me. So, if instead, you had told me it's $20 and you get 22 widgets a month, and sometimes you use all 22, but you're mostly using 18 or 20, the price and my value are feeling really good there, right? So, I may even feel better if I pay $20 a month and you told me I get 22 widgets a month and I really want 25 and I use all 22 every single month. And there's some correlation there with information and service and I'm not...Carl, I'm not using all this stuff you're sending, 80% of this doesn't even apply to me. So, that's...
And then the last thing I want to tell you is I remember one of my clients said to me when I would send out these topical...and again, this does not make them wrong, it's just a discussion. Everybody who's going to send emails, please settle down. We're just having a conversation. I remember one of my clients when I had sent out these topical pre-programmed things that I wrote, they were good, I thought they were good, but they were pre-programmed. And I had a couple of clients say to me, "Hey, Carl, you know what, what if you just call me if you think that applies to me?" Or "What if you just sent that to me...Would you do me a favor? Just send me the stuff that applies to me." So, those are all...those are the...Where do you want to go with that?
Michael: One, three, two.
Carl: You're going to have to remind me. Kevin.
Michael: So, Kevin. So, I'm fascinated by this. So, as you framed it, Kevin's business model, Kevin's success framework is rapid response to client questions. You got an issue, we really are getting back to you fast.
Michael: Which I don't even know. How fast are we talking? What did this actually…
Carl: Well, it was like they normally...somebody always answered the phone.
Carl: Right? And if they...He made it a point, that's the job. So, it wasn't like 24 hours. I don't know, I can't remember if he ever promised by the end of the day, but it was like you knew that if you sent an email, you were going to get a reply. The reply sometimes would be, "Hey, it's going to take me two days to work on this, I'm on it." But it was always rapid response. They would drop everything to take care of client questions.
Michael: Which I find fascinating, just...right. When I think about that from the client end, look, there are, well, there are clients whose problems just aren't that urgent. There are clients who just like, "Yes, I like good service, but I'm not paying extra for that." Or like, "You're a professional, you're supposed to respond in a timely manner. That's supposed to be table stakes."
Carl: Well, let me mention one thing real quick. He didn't tell clients this.
Michael: He just did it.
Carl: It wasn't like he was running around waving the flag like, "I respond to your question." Because you're right, people...But you and I know that the bar is super low. All you have to do is say please and thank you and do what you said and you're ahead of 80% of the population in any industry, not just ours.
Michael: Presuming that means Kevin ended up with a disproportionately high rate of referrals and the such because clients would just say like, "Yeah, he's great." Like just, "I ask him questions, he gets back to me really quickly." And then someone else says, "Really? Because I haven't heard from my advisor in four months. It's like..." And Kevin gets the referral.
Carl: And I can't get my advisor to even return my call.
Carl: Right? And he would say things like, "Yeah, I..." In fact, I had a client once say to me, "Carl, I didn't hire you to coordinate my social calendar with client appreciation events." He's like, "I have no interest. I got friends. I don't need to come to your events." And again, I love my events. So, I'm not saying it's a bad idea, I'm just saying, interesting.
Michael: Well, different clients, different preferences. But for the client who's like, "Look..." I guess it's a version of the scenario that Meg framed as well where Kevin's model is “I'm there immediately when my clients need me,” and that's the deal.
Carl: It's so...To me, just even your face of like, that's so...
Michael: What else is there to say?
Carl: That's what I love about that. I'm a fan of this kind of stuff, admittedly. Crazy idea, simple as possible, slightly hostile compared to what everybody else is doing, all of that stuff I'm a big fan of. But yeah, and I'm not saying it would work for everybody. I'm not saying it's what you'd want to build, but it sure worked for Kevin.
Why ‘The Sledgehammer Of Value’ Approach Can Overwhelm Clients [13:46]
Michael: Well, so, to me that leads an interesting way, I guess, to the second point that you raised, this dynamic of whose problem are we solving, and particularly whose problem are we solving given how high most of our retention rates are? I think it's a good way to frame it because I don't know any advisory firms offhand that have seen a material increase in attrition rate over the past few years, aside from a few of us that got a little bumpier in market volatility just from the market environment. But outside of there's always a few clients that are a little squirrely, they get a little squirrelier in volatile markets, I don't know an advisor, an individual...and I haven't seen anything in industry data and research that says, "We're literally starting to lose clients now because we're so not valuable on an ongoing basis that, jeez, we better start doing more value-y things to retain all these clients that are starting to flood out the door."
What I do see though is a very broad-based challenge that growth is harder than it used to be. Getting new clients is harder than it used to be because we used to say, "I do comprehensive financial planning, and I provide holistic services, and I'm a fiduciary, and I only charge fees." And all these things that a lot of advisors in the advice domain in particular spent a lot of years differentiating on, and there's just so many people doing that, it doesn't differentiate you anymore. It doesn't distinguish you. And the thing that I feel like I am seeing emerge is for a lot of advisors when growth gets harder and it's becoming more difficult to win new clients and you're trying to figure out how to get more clients, that the go-to answer a lot of us have is, I just need to do more for them. If I just did more, they'd like me more, they'd want to work with me more. If I could just show them more stuff that I do, the value should speak for itself with the sheer sledgehammer of value I'm going to hit you upside the head with. Let me show you my service calendar. And someone's going to tweet, "Sledgehammer of value" now. I just realized I'm going to probably own that for a long time to come.
And look, again, I love proactive service. I love systematizing and scaling. It's like I don't want to be negative at all around more proactive value. But just, I will say, when you ask this question, what problem are we trying to solve? I don't think it's a retention problem because I don't think it's showing up in anyone's retention. I think what's happening is a lot more of it's getting harder to win clients. It's getting harder to grow with new clients. If I could just show them that I do more than everybody else, then they'd want me and like me and hire me. And I think it's coming from that place. I don't know if that resonates to you at all.
Carl: Oh, look, I agree that it could be coming from that place, but I don't think that's...That's a whole nother discussion. I don't think that solves the problem of growth.
Michael: No, I...
Carl: I think it gets...But I agree that it feels like it could.
Michael: Well, I think it's a way to solve a problem for growth. I don't think it's...
Carl: Assuming that anybody cares about your client service model.
Michael: No, I...
Carl: I don't buy client service models.
Michael: Well, I don't think people care about, literally, I have a client service model. They care about, look at all the stuff that you do and the value you provide. I can add up the value in my head of what that is, and it adds up to more than your fees, so I guess I'm willing to pay it. I think it's reasonable as a way to try to go out there and get more business with the caveat that Meg directly has highlighted is until you do so much of that that it actually creates other problems in your business. Because what I find a lot of advisors doing is...it's a version of the conversation we had a couple of weeks ago. If you really want to give above-average service because you've got this super amazing, awesome, above-average client service calendar, you got to charge above-average fees because you need more revenue to hire more people to do all the stuff. If your business model is, we do more work for everybody and we do more work than the average advisor while we charge the average advisor, it literally doesn't work on a sustainable basis.
You can't do more than everybody else for the same money as everybody else, or you're just running, at best, a less profitable business and, at worst, when a market pullback or some other hiccup happens, you don't have a sustainable business anymore. And so, I think it's a reasonable thing to say I'm going to differentiate by doing more for my clients. That's not necessarily a problem, but we don't always do it in a healthy way, or perhaps we go overboard with it, which I think is a version of what Meg's question highlights as well. You could go so far that you will lose your clients to Kevin because you gave so much awesome value 12 months of the year that Kevin won your client away by responding to them quickly the one time that something came up that you couldn't do quickly because you were in the middle of your January thing.
Carl: Yeah. I think it's, Michael, super important here to distinguish we're talking about ongoing service models.
Carl: And not upfront, not the first…
Michael: Yeah. This is not the upfront. This is years 2 through 30 after the first.
Carl: Yeah. Kevin did a ton of work to get people on board.
Carl: The same work that we all do, all that stuff. And he doesn't market with rapid response to customer questions, but it ends up being the only thing anybody cares about. So, let's not lose track of where we are, but I just want to circle back to business development through promising more, demonstrating that I demonstrate a lot of value because look at this menu. Is it reasonable? Sure. Is it a reasonable way to approach this problem that growth is getting harder? Sure. I would just point...and I don't want to...I really don't want to take us down a tangent on marketing and business development right now because I want to go back to these issues.
But my suggestion would just be that, again, are we solving the right problem? Are we asking the right question? If we think making a longer menu of client service, not even longer, just clear, more demonstratable, maybe longer, more robust, more valuable, all the words we would use, if that menu...if we think that will help us. And again, I'm not saying it won't, I'm just saying if we think that that will help us solve the growth problem, then the beautiful question is, are we solving the right problem? And I would just suggest the framing in my head is I've never woken up...no client, no human out there has ever woken up thinking, "Gosh, I have a client service problem. If my advisor just offered a more robust client service model..." What they wake up with is a financial question or a financial "problem." They don't care about your solutions. They don't care about your proposed...What they care about is, can you solve my problem? And so, I think...Now, the way you demonstrate solving that problem could be, "Yes, look at this menu." Okay. I can...We can have that debate, conversation on another podcast.
The Importance Of Offering Services That Are Relevant To Clients [21:27]
Michael: When you've got a consistent clientele, a consistent clientele with a consistent set of problems, ideally your service calendar literally just is all the things they're dealing with on an ongoing basis, in which case you're covering the topics they need anyways. I think, to me, I guess the distinction, even as I'm thinking about it, there's two versions of annual client service calendars I've seen that crop up. The first is, “Hey, there's all this stuff I do for my clients every year. They all ask about it, they need the same stuff. I'm having the same darn conversations over and over again. Why don't I just systematize this into a standard model?”
So, instead of just, “Hey, I end up producing tax reports for a whole bunch of my clients because I try to work proactively with their CPAs because I do that already, why don't I just make March the month that I produce all the capital gains reports and systematically send it out to all the clients?” So, basically doing it anyways, but I could systematize this way more and then I could highlight and promote that I do it. And I'm not adding work, I'm not doing different work. In fact, I might be streamlining the work by taking the things I already do on a fairly consistent basis and just doing it systematically. That's one version of service calendars. I'm standardizing what I already do.
Carl: This, by the way, is relevant across the board.
Carl: So, to me, that's the important piece, relevant to each client.
Michael: The second version is essentially more of this growthy differentiation version. I'm trying to get more growth, so I got to show that I give more value, so I'm going to do more and more things to show more and more value so that they'll more and more want to work with me. That, I think, just starts to potentially create the problems, A, because it's easy to go overboard on that, as I think Meg's question directly highlights, and B, as I think you frame well, Carl, what's the real question or issue that you're trying to solve for? I mean, I think for most firms what it comes down to is what I'm trying to solve for is differentiation. So, I can differentiate by doing more. I can differentiate like Kevin does, which is being faster response. I can differentiate by having some deeper specialization, just being more awesome at problems for people like you, whatever you are, whatever niche specializations that I have.
We did a version of this in our Kitces research and found the average niche advisor charges significantly higher financial planning fees and does less comprehensive plans. Their plans cover less. Now, they're really, really good at the things they cover. If you specialize in tech employees, you can give a better option in RSU analysis than anybody else's out there. And you know what else is cool? No conversations about Social Security, no conversations about Medicare. It's a whole bunch of stuff that you don't have to talk about at all because all your clients have one commonality. And if you're super awesome at doing that, you can show up better than any other advisor and actually have to do less because you could be better at what matters for them and just exclude all the things that don't actually matter for them. So, yeah, they...
Carl: I feel like that is largely...I'm often...I find myself saying more and more these days. I don't even know how to talk about business development with anybody if you don't have a niche. Or a niche. And so, I think that's really true. The one thing that I think is interesting if I don't have...So, I love the framing you've picked here of...all right, let's just pretend like you have a niche. Let's just pretend you do. And you're going to take the things you're already doing anyway and we're going to systemize those. Awesome. Amazing. And then my version of client service model would be like, well, then what if I looked...what if I set aside the same time, I was going to send out the, you know, "This month we're talking about estate planning," and my client's going to call me and go, "Hey, man, does estate planning apply to me?" Or we're going to have the problem where I think you've promised me a hundred widgets, I'm only using 20. Right? All of those problems are solved by saying, "Is this relevant to Dave and Diane? Okay, I'll send this to Dave and Diane."
Michael: And if all your clients are like Dave and Diane, it just gets really simple. Either everybody cares about it or they don't...
Michael: ...because you've got the same client base.
Carl: Because I think relevance to me is the keyword. I'm going to pay for relevant advice that shows up in my life. If it's irrelevant, I'm going to...you're actually just going to make me a little bit frustrated if I keep getting irrelevant stuff from you. It's like the widgets I didn't want.
Michael: Well, and I think in that theme, right, just to get to the last point that you raised, right, just this phenomenon of if we try to hit clients with...Stick with it. We try to hit clients with the sledgehammer of value, and it really is more than they can take, you really do get this fascinating phenomenon of, "I only use half your services. So, I'm going to fire you because I feel bad that I'm only using half your services."
Carl: I must be overpaying.
Michael: But if you only offer them a quarter of that service in the first place and they use all of it, they would feel great about it because...
Carl: That's true.
Michael: ...they feel like they're fully utilizing all the value that's on the table. And just, I do see that very commonly as a phenomenon. I see it in advisors that go from commission models to AUM models and then for a while they get super fixated on like, "I'm charging a client a fee every quarter. I have to do something for them every single quarter." And then they start trying to do that for a while, and then eventually clients are like, "Why do we meet so often? There's literally not that much to talk...nothing has changed my life in the past 90 days. Can we stop meeting all the time? I'll just call you when I want to talk to you." Or like, "You call me if there's something going on." I've seen a similar phenomenon as advisors are going towards retainer structures and monthly service models of a lot of advisors, particularly when monthly subscription models were first getting started, they were like, "I'm going to do a monthly thing for my clients where I stay. I meet with them every single month of the year." And all of those models flamed out very quickly just because the clients were like, "Dude, I have a life. I can't work on my finances every month. I've got other things going on. I'm not that...I mean I'm ready to deal with my finances, that's why I hired you, but I'm not that ready to deal with my finances in a crash course. I can only do so much of this with you."
And so, we see a lot of advisors that they start out with monthly and quarterly meetings, and then it goes to quarterly or semi-annual, and then it just backs up to semi-annual, and sometimes it's only annual if the client's got nothing going on. And I do think there's a version of that that you're articulating well here that...not to say therefore we can all necessarily get away with Kevin's model. I'm just going to sit around and wait until they call and then respond rapidly when they do. Just maybe it's my own personal bias, kudos to Kevin for building a model that worked around that, I do feel some pressure to be a little bit more proactive and regular. I think both part of that's my service mentality, part of that is you do look at some of the research around client retention and the single biggest predictor of client retention is basically how often you interact with your clients. There is something to frequency of touchpoints and engagements. It does matter, Kevin's model of success notwithstanding.
But I do think it highlights...I think Meg's question highlights, A, she sort of frames, how do you think about the balance? And just, first of all, I would say, I do think it's a balance. I'm not sure everyone can get away with the Kevin extreme, but clearly, there's a version of like, I'm so proactive I can't actually do anything, but my proactive thing that I'm now locked into and stuck into. But I think the secondary piece that does go with it is trying to fight down maybe that latent fear that we have of like, I have to show more, more, more do more, more, more to get that next client and recognize that if you come at clients too hard with the sledgehammer of value, you really can just so knock them over that it doesn't feel good for them and they actually don't retain because you tried to do more than they could do and they actually...they end up feeling bad they can't utilize the sledgehammer of value for themselves.
Carl: Well, it's more...
Michael: I told you I can't let go of sledgehammer of value.
Why Building Client Trust Is Key To Finding A Balance In Providing Value [30:00]
Carl: It's really unfortunate, but that's now stuck. It's not only just feeling bad, you literally feel like you're overpaying. I'm only using 80% of what you sent me. And so, but the other comment I just want to make, and I just kind of want to let this sit out there. We don't have to talk about it. I just would love people to think about it. What if the greatest outcome for the client...Well, here's a story to demonstrate this. One of my clients, his name was...I'll just call him Dr. Terry. He was a radiologist. His last name is not Terry. Let's just call it...We'll call him Dr. Dave, but Dr. Terry is fine because his last name was...
Michael: We don't know who it is. So, I don't think Dr. Dave is any more anonymous than Dr. Terry at this point.
Carl: Dr. Terry. That's right. So, Dr. Terry, he was a radiologist, mountain biked a ton, spent a ton of time outside with his kids. Just loved it. And I asked him the question...and there's more to this story that we can talk about another time. But I asked him the question, in an ideal world, how often would we talk? He said, "In an ideal world, we would never talk." Yeah. Like, I got a life. Like, you seem nice. I remember he almost...I think he did say that. Like, "You seem like a great guy and everything, but..."
Michael: But did you stop calling him?
Carl: Well, there is a long story to that. Yeah. We slowed down on calling him and he called me one day and was like, "What do you do?" And I said, "Well, you told me that I should never call you." He said we weren't there yet, but it took us another 12 months to get there. And that 12 months he was like, "You know, we're there now." So, my question is, what if the ideal scenario for clients is we talk less frequently? We've literally taken the plate from them. You don't have to think about this anymore. You don't have to worry about this anymore. And I don't have to rush around trying to prove my value. I'd be tempted to build something now that sent out an email probably twice a month, the 1st and the 15th, that would literally just say, "What financial questions can I help you with? Hit reply or text me, let me know. If there's nothing, awesome, I'll talk to you in two weeks."
I'm super curious if I was just like, "Please know that I'm here for rapid response. Here are some questions you might not have thought of." We could do that too. Like, "Did you buy a new business? Did you sell something? Did you da, da, da...? You don't even know to ask me. You're going to lease a car, call me." But all generated around, I'm here for rapid response for your financial questions. I happen to know the questions you're thinking of because I know you're niche, and I know that you're seven years into being an orthodontist and about that time you need to do this and you're going to buy your building and you're..." You could really "AI" that out.
Carl: A beautiful way if you were niched and again, to Meg's point, right, that allows me to...I've got...I think the answer to this whole question is it's a mix, right? It depends. And I'm sure it's a mix. Your version of...Can we automate the stuff we're doing anyway? Can we layer on top of that some things that seem to show up at relevant times? And we know those relevant times because we've dealt with this, we've pattern matched so well with this group. So, we're actually demonstrating value before people even know it. That stuff's fascinating to me.
Michael: My big takeaway for it, it certainly rings true to me of thinking back about evolution of client relationships over the years, but just the...There is a phenomenon that goes with this that clients just hit this crossover point like four or five years into the relationship. You just hit this level of I really trust you, I'm really on board. I don't think we need to meet so much anymore. Like just, you call me when something's going on and I'll call you if I got something to talk about. So, I think it raises an interesting question of is it even possible that this balancing point actually changes through the scope of the client relationship? Because there's difference between a client that I've been working with for five-plus years where I say, "Whenever you need something, just call me and I'm here and I'll respond rapidly," and having a client in the first year being like, "Hey, yeah, I'm just here whenever something comes up." Because we're not there yet, but we get there at some point. So, maybe part of the dynamic is that this balance actually shifts over time as we spend the multiyear process of really building that deep level of trust. So, that's my take.
Carl: Let me just say one more thing about that because that experience with Dr. Terry actually generated what we called the financial pornography detox program, where we actually kind of set up the idea that when we got to the point that we were no longer talking much, we had arrived at the most valuable spot in your life. Right? So, we didn't set it up as if like, "Oh, when you stop hearing from me, we both have to be worried that I'm billing you and I'm not delivering value." We set it up the opposite. Like, "Hey Terry, when we get to this point, there's going to be a point 12 to 18 months from now where things are going to really feel settled. You know, when we do that, high five." That's when I've become really valuable. We're setting it up beforehand so we don't have to be worried about this, "Oh no, what am I doing for my money?"
Michael: All right.
Carl: Financial pornography detox program, sledgehammer of value.
Michael: Well, and just in...And finding that balance of, why are you trying to do all the additional stuff that you're doing? What problem are you really trying to solve to get there?
Carl: Exactly. What's the problem we're solving for anyway? Super fun, Michael. Thanks.
Michael: Thank you, Carl.