In recruiting new clients, are you a yes-man or a yes-woman? Do you work with everyone regardless of needs, resources and temperament? If so, you are making a big mistake. But don't worry; it's not too late to change. Just ask the advisor we mentioned in last month's column: Mike Reese of Michigan-based Centennial Wealth Advisory.
Years ago, Mike took on anyone who walked through the door. But, instead of having a thriving business, he was miserable and exhausted. He spent too much time with clients he didn't like. His clients complained too much. They expected the world of him, but offered little financial or emotional rewards in return.
After suffering winters (springs, summers and falls) of discontent, Mike finally sat down and asked himself, "Why can't all clients be like my favorite ones?"
Then he began thinking about the clients he most enjoyed working with -- and writing down their characteristics. He considered their demographics (age, income and other hard data) and psychographics (temperament, passions, tolerance and other soft data). By the time he was done, he was peering at a full sheet of paper.
Most other advisors would have stared at that paper and done nothing. Mike took the pivotal next step: He fired all the clients who didn't meet his ideal client profile.
Now, some of you may question whether firing a client is ethical. Isn't it just another word for abandonment?
The answer is yes, it is ethical, for two reasons:
- First: Referring clients to a more compatible advisor is what's best for them. They'll achieve better results working with someone who fits them better.
- Second: Surrounding yourself with compatible clients helps you do a better job. Plain and simple, it's human nature to work harder for suitable clients.
So what happened to Mike? Today he's more successful than ever. He works fewer hours and has more fun. He still loves coming to work, but finishes earlier due to fewer problems during the day.
What about you? Do you feel you have too many challenging clients? Do you wish you were Mike? Then consider these transition techniques:
1. Stop taking on all referrals. This puts you in the box of obligating yourself to those that may be problematic for you. On the other hand, do promote referrals from existing clients, friends and colleagues who truly know your ideal client type.
2. When you first meet a prospect, determine fit. Ask open-ended questions and listen carefully to the person's answers, body language, etc.
3. Don't be afraid to transition unsuitable clients. Send them an appropriately worded termination letter. Explain your decision in a follow-up phone call. Refer them to another better-suited advisor. (But be upfront with that advisor about why you're making the referral).
4. Beware of troubling behavior styles. If someone is overly needy, abrupt or annoying early on, watch out.
Bottom line: saying no to a prospect is never easy. But once you start, you may well become the most popular no-man in town.