A New Way to Listen to the Voice of Our Customers

By Bill Kica on February 9, 2022

Upgrading Client Advisory Boards (CAB’s)to Empowered Client Advocacy Councils (CAC)

“Listen to your customers or someone else will” – Sam Walton

Honestly, perhaps we over-complicate things.

When you boil it all down, running a financial advisory practice effectively comes down to focusing on a few “right” things:

• Doing The Right “Things”. . .  (i.e., clarity of focus)
• In The Right “Ways”. . .  (i.e., clarity of process)
• At The Right “Time”. . . (i.e., clarity of standards)
• For The Right “Reasons” . . .  (i.e. clarity of core values & mission)

Achieving clarity and consensus on what the RIGHT focuses need to be to move our practice to the next level of performance is likely more than half the battle. Without this, we are left to learn by trial and error. Or, as the saying goes, taking “one step forward and two steps back.”

There are three things far too many financial advisors shy away from, namely;

• Managing people
• Holding themselves accountable
• Listening to clients

The first two are essential to ensure the practice is executing effectively. But it is the last one, giving voice to our customers and providing deep listening formats to our clients, that is essential in making certain that our practice is focused on executing on the “right things” today and for our future.

Why Proactive Listening to Our Clients Matters

What doors do you make available for your clients to give timely feedback on their experience with your team?

Perhaps you run periodic client satisfaction surveys or marketing focus groups, or less formal one on one chats quarterly. Regardless of the format that works best for you, thriving, evolving practices have proactive, intentional ways to take the pulse of their ideal clients and prospects.

Done right, listening to the voice of our customers should not be random or left to chance. If this function is not institutionalized within our practice, it will be nearly impossible to align our client deliverable with the needs and expectations of our ideal clients.

Traditionally, a concept known as Client Advisory Boards (or CABs) institutionalized how an advisory practice systematically gets timely strategic and tactical inputs from clients and prospects. CAB’s can be an important practice management and new business development tool. Objective CAB’s can ensure the resiliency and growth of our business for the road ahead.

Mind The Gap: Finding Our Blind Spots

Blind spots don’t disappear easily. Perhaps our core deliverable today is merely portfolio management, while our most desirable prospects seek comprehensive wealth planning. Maybe we are stuck on a fee structure that is tied to assets under management when our ideal prospects are signaling a preference for an all-inclusive planning-based fee-for-service approach. Or perhaps out-sourcing tax and estate planning services to third-party providers has become passe in the face of the expanding access to a Family Office suite of services.

Effective CAB’s can be our springboard for “disruptive innovation,” leading to new services, market niches, platform enhancements, and new business development. And they can have an outsized impact on our practice for years to come.

Client Advisory Boards (CAB’s) are not new to financial advisors. For years, industry research has affirmed that elite practices have seen them as one of the key drivers for new business or new client referrals. Unfortunately, many advisors took a look at the investment in their personal time and the gestation period leading to new business and set them aside.

Alternatively, many advisors opt for business development initiatives with a shorter “shot-clock” to pay off. In doing so, we forgo the arguable higher-value insights to look past today’s blind spots and see around the corner. The opportunity cost of being late to pivot away from a stale or “me too” client deliverable can have far more cumulative economic consequences to the practice than merely seeking a shortcut to onboard the next client today.

It takes time and a long-term commitment to the CAB process to yield meaningful strategic insights for the ongoing business. However, they serve as a powerful way to validate any recent or planned enhancements to our core standard of care.

Re-Booting Our Voice of the Client Listening Process

An empowered CAB can provide just the “strategic nudge” needed to get us out of our well-worn ruts. They help us see past potential blind spots and adopt new business models sooner than we would if merely left to our own. Without objective outside perspective, few practices can expect to enjoy a sustainable competitive advantage.

Unfortunately, many advisors were misled to believe that CAB’s were a quick way to showcase their practice to clients in the hope of asking for more assets or expediting the opportunity to ask for referrals. This approach can leave a bitter aftertaste for clients. This approach risks the CAB being seen as merely a trojan horse and not a proper steering committee for the strategic needs of the advisor’s practice.

Perhaps it is time to change the role of these boards to protect their strategic mission and better align the participants’ role with the higher-order needs of the practice. It may be time to re-launch them to enhance client engagement and shake off the less desirable perception CAB’s may have acquired in the past. This can be done by evolving participation from one of providing “access”to delivering “advocacy” in the form of Client Advocacy Councils (CAC).

Here is a 3 step road map for re-energizing your Voice of the Customer (VOC) engagement program:

3 Steps for Creating an Empowered Client Advocacy Council (CAC)

1. Clarify the Mission of the Council

At the onset of the Client Advocacy Council (CAC) clarify why it exists and what is expected of the council members. This includes giving participants a voice right upfront. Consider letting them co-determine what the desired outcomes need to be and how their success will be measured. To ensure genuine participant engagement, each council member must be given a healthy degree of autonomy in driving strategic discussions, weighing alternative strategies, and critically evaluating the efficacy of actions taken by the practice.

Creating a sense that “we all have skin in the game” is essential for engendering true ownership and esprit d’ corps within council members. The goal here is to go far beyond offering mere advice. Seek to create proactive members who are willing to spend their personal capital (i.e., connectivity and influence, not funds) to take the practice to where it needs to be, not merely where we want it to go.

Empowering CAC members can pay strategic dividends. Council participants can help test or sample new approaches. They can be a catalyst for “disruptive innovation” when they author changes to the business model. When they are given a space to author initiatives for the practice, they are more likely to develop a sense of stewardship for all clients you will be entrusted to serve when their ideas are on the line to produce better outcomes for the practice.

2. Setting Ground Rules

Remember, we are not here to defend the status quo. To stimulate member engagement, it is good to set guiding principles right out of the box. One core tenant to ensure idea flow is to “check our judgments and defensiveness at the door.” In other words, the members should feel that we seek their genuine input regardless of our initial feelings or personal judgment about them.

To do this well requires a high degree of vulnerability and openness to all inputs. If we send out signals that we are not open to critical assessment of the practice, we risk the members shutting down and losing the potential for breakthrough ideas.

Doing this can ensure members that the council is a safe space to put their shoulder behind new initiatives and empower a sense of ownership and autonomy to take our practice to places we could likely never take it ourselves.

In each council session, the advisor’s role should be more “listener and enabler” than “director and defender.” By remaining vulnerable,open, and non-judgmental, we can signal to members that we genuinely respect, value and need their guidance.

To ensure ongoing buy-in by members, we should be prepared to report back to council members routinely (e.g., quarterly or semi-annually) on our progress in implementing their ideas or initiatives. We must show follow-through on implementing council ideas and share results, good or bad. This is the key to creating ongoing engagement and a genuine sense that we are all in this together.

3. Membership Engagement

Recognition of member contributions is essential. For some, they will see our practice as a way of giving back or a form of mentorship for the tutelage they may have received on their way up to their successful careers. By infusing the council with a sense of purpose, we allow participants to create in the image of their value systems. When they see their values ingrained in the principles of our practice, the line between the practice and their engagement disappears.

Essentially it becomes their own practice in a way, and barriers to proactive advocacy melt away. In some ways, it may become a way to solidify their legacy within the business communities we mutually serve. And our reputation precedes us by spreading across the various networks they have influence within.

To ensure that idea flow remains robust, fresh, and disruptive, consider that each member’s tenure within the council is limited in duration and subject to periodic rotation. In a way, you are graduating a series of community and business advocates that are in the desirable position of having hand-crafted the essential deliverables of our practice. These virtual alumni can now serve as authentic goodwill ambassadors for us and our practice in the networks they exercise their influence within for years to come.

To learn more about how to facilitate an empowered Client Advocacy Council contact Bill Kica at bkica@hightoweradvisors.com