People want to do business with the best

While at a museum reception, one of the local movers and shakers told me, “My cardiologist is so good, I can never get in to see him.” It made me wonder, what’s the point? Another time one of my previous clients was talking about his medical practice in an economically impacted area. I asked if he reduced his fees. His answer surprised me: “Certainly not! If I was cheap, people would assume I wasn’t any good! People want the best. Price is often a major criteria.” Obviously, medical insurance plays a part, but both examples make the same point. People want to do business with the best.

In the financial services profession, many practices sell similar products and use a similar approach to get to know the client before preparing and delivering a proposal. If clients think all firms are the same, they shop for the lowest-cost provider. How do you establish you’re the best?

Being the best can be measured in many ways. It’s possible for several firms to be the best, depending on the category or criteria measured. This can work in your favor. Here are some of the common criteria used when looking at financial advisors, and what you might want to highlight about your business in marketing materials and to prospects and clients:

  1. Assets at the firm. When magazines rate practices, they usually look at total client assets held at the firm, total deposits or another measure of funds held in-house. People assume if there are lots of clients keeping lots of assets at the firm, it’s a good and trustworthy business. You would be talking about recognition the firm has received as the biggest in terms of assets. You can prove it.
  2. Retirement assets. I like this category because psychologically a client’s most important money would be the nest egg they are saving for retirement. They will really need that money when they’re no longer earning a salary. If your firm has a large amount of assets in this category, it sends the message that people trust this business with their “safe money.”
  3. Years in business. Having a long history means the firm has ridden through various economic cycles. Longevity also implies quality. There might have been consolidation in the industry. Your firm might have been acquired by a firm that was acquired by another firm. You might explain this by saying “We can trace our roots back to…”
  4. Number of clients. Having a large number of clients also communicates “People trust us.” You’ve seen times when a firm runs into serious trouble and people stop doing business with it. Having a large number of clients implies it’s a good firm. I recall seeing a bank say: “One out of every two households has a relationship with our firm.”
  5. Ratings. Your firm is rated by independent agencies concerning its financial stability, such as AM Best. People like independent evaluations because someone else is applying the criteria and ranking the firms.
  6. Number of agents or advisors. Sometimes being the best means having the most. In addition to being ranked on overall assets, practices are also ranked on how many agents or advisors they have in the field. It’s another way of being the biggest. This can also be measured by country. Your firm might not have the largest headcount in the world, but it might be the biggest in that country or region. That shows commitment.
  7. Famous projects. History can sell. People think about huge projects that built a nation or made the world a better place. In the U.S., it might be the railroad expansion in the West or financing the growth of the power grid. There are huge hydroelectric dams that could be considered wonders of the world. Did your firm’s financing help make that happen?
  8. Famous clients. The business runs on client confidentiality, but some major institutional relationships are part of the public record. Is your firm connected to a world-class university or a major public pension fund? The assumption is they can afford to hire the best. Is this the coattail effect?
  9. Awards won. Industry magazines run competitions and stack rank firms as award winners. Sometimes it’s the biggest. Other times it’s the number of big deals done. There are People’s Choice type awards, too, where readers or industry executives vote. Even in local communities, newspapers run these competitions. Has your firm been recognized? Do they have a big banner?
  10. Number of offices. Does your firm have offices throughout the country? Clients travel. Knowing the firm has a local office can be reassuring. Having the most offices is another measure of size.
  11. Global presence. Take that last point a step up. Investing and related research is international. Having analysts on the ground, listening to what’s happening in the local market has value. Clients travel internationally. They can find comfort in knowing the firm has local offices in the country they are visiting.
  12. Years in the local community. Commitment to the community is important, especially to local leaders. Some firms test markets. Others cut costs by closing offices in smaller markets. If your firm has had a continuous local presence for decades, it shows commitment.

There are many ways to be the best. Which best describes your firm?

Bryce Sanders is president of Perceptive Business Solutions Inc. His book Captivating the Wealthy Investor is available on Amazon.

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