This report, published by Financial Times (FT) Corporate and carried out between May and August 2012 contains interesting insights and recommendations on the client-adviser relationship and coincidentally (for we had no involvement), those insights align closely with the IoweU approaches and tools introduced in the book Smarter Selling (FT Prentice Hall).
This survey of FT readers and members of the Managing Partner Forum draws insights from 569 respondents from across the globe: 45% from the UK; 26% from North America; 18% from Europe; 9% from Asia-Pacific, and 3% from elsewhere. 64% of participants came from management and fee-earners at advisory firms across four sectors: law, accounting, property and consulting and 36% are owners, and senior- or mid-level executives at client businesses.
The report focuses heavily on clients perceptions of value and on the role of “commerciality” in shaping that perception, concluding that:
“Although clients’ businesses have become more agile and innovative, there is frustration that many advisory businesses have not implemented the same degree of change.
Technical competence and the responsiveness of individual advisers are increasingly seen as hygiene factors: critical if absent but no longer as influential in selection.
Clients also want a more strategic, commercial dialogue with their advisers, particularly in a more complex, uncertain and global business environment.”
1. Relationships that deliver value
The report notes:
‘there is a large disconnect in the perception of value for money’ with 51% of accountants rating themselves as excellent but only 19% of clients giving an excellent rating.
Should we be surprised? After many years of hard work dedicated to acheiving technical competence, and of being promoted on the basis of developing competence, it is to be expected that advisers equate technical competence with value.
This is a finding that has been seen many times before and in many industries – indeed, it occurs in all advisory fields where deep technical knowledge is a requirement.
The report goes on to state:
‘ Clients are looking for advice that is not solely technical but takes into account the wider issues and risk faced by their business.’
What clients want, and indeed what firms want (because it drives the much talked about, but seldom achieved, cross-selling), are T-shaped advisors as opposed to I-shaped.
The report has even worse news for consultants. While 51% of consultants consider that they offer excellent value for money only 2% of clients agree. Yes, that is 2% – it isn’t a typo!
Perhaps all those jokes about consultants and the lack of value they bring has had some influence on clients’ perceptions – or is it that consultants, who often have very ad-hoc relationships with their clients (as opposed to trusted partner relationships) are not good at communicating the value that they bring?
2. From technical advice to commercial advice
The report suggests that advisers need to leave their technical comfort zone and focus more on both commercial aspects and the future.
Here though the report misses a crucial point. As pointed out by Matt Dixon and Brent Adamson in The Challenger Sale (2011) and as long ago as 2006 by Dr Neil Rackham (author of SPIN Selling, the critical differentiator is the ability to uncover opportunities, as opposed to seeking only risks:
‘Salespeople following problem-based models often fail to uncover opportunities until very late in the call – if at all. What is needed is an approach that encourages discussion of opportunities much earlier in the sales process.’
Advisers who rely on technical competence and focus solely on risk will fail to build partner relationships.
IoweU codifies relationships into 4 broad categories, including those that are predominantly ad-hoc or technical in nature.
The goal for IoweU is to develop the type of trusted partnership relationship advocated in the book, The Trusted Advisor. Where Maister, Galford and Green focus on what a trusted adviser relationship looks like, and the benefits that flow from such relationships, Smarter Selling and the IoweU approaches and tools focus on how to build and maintain such relationships.
Partner relationships demand deep understanding of both the technical aspects of the business and the broader commercial landscape, allied with the personal interests and preferences of the individuals involved. In such relationships, value is readily recognised and moves in both directions.
Such relationships take time, energy and more than a little skill to build. Plus of course, not every client is looking for a partner relationship.
Once achieved though, they enable advisers to the service they offer, and avoid the twin traps of commoditisation and price-focus.
To find out more, and to objectively assess the current state of your key relationships, access the free online questionnaire (no registration required by clicking here or on the chart above.
To build trust and better understand future aspirations and current challenges, IoweU practitioners employ a comprehensive toolkit, that is applied at their discretion. This is not some ‘one-size, fits-all’ ABC formula. The modern world is far too complex for such tired and over-simplistic concepts.
At the core is an approach called SHAPE. Five types of question (Surface; Hunt; Adjust; Paint; Engage) which, when asked with skill and adept listening, enable the adviser to to build a complete understanding of the client’s world- of their current situation and future desired situation – in order to work out if and how they might help the client SHAPE their desired future.
SHAPE is supplemented by the use of a Value Sheet – a simple four-column tool that drives future, value-oriented conversations as opposed to current, technically oriented ones.
Further IoweU tools are provided in the form of Focus-5 (which specifically directs technicians to ask broader, commercial questions) and Spicy Questions – 8 specific types of question that add spice to conversations and encourage ‘out-of-the-box’ thinking.