Did you know Kodak invented the product that eventually put them out of business? It's true. Kodak invented the digital camera way back in 1974.
So if Kodak invented the digital camera, why did it go out of business? Simple. Kodak officials thought they were in the business of selling film, chemicals and photo paper. They overlooked the fact that they were really in the business of helping people “capture memories.”
If they had realized why loyal customers actually used Kodak products, they would have put a huge amount of effort into bringing the digital camera to market, and the company might still be around.
The thought process that led to this turn of events — a company actually making itself obsolete — can provide some cogent business lessons for advisers.
From my experience, many financial advisers fall into the same trap. They don't clearly understand the business they're really in, so they become “stuck” in how they do things. They fail to see how new technologies or approaches might be better for their clients.
SIMPLE INSIGHTS CAN MAKE A HUGE DIFFERENCE
It's hard to believe, but the iPhone didn't exist until June 29, 2007. Today we take them for granted (and all smartphones, for that matter).
But think back to the cellphones you used before 2007. They were clunky and not all that easy to use. You could make calls, but the interfaces relied on pressing lots of buttons just to do simple things.
Steve Jobs recognized that. He also realized that his iPod business could be threatened if a cellphone manufacturer integrated an MP3 player into its cellphones.
So Mr. Jobs set out to eliminate the threat while making cellphones easier to use. He tried to partner with Motorola but quickly became frustrated with that venture. He decided to build something himself that would be entirely focused on consumers' ease of use.
The result was the iPhone. And it catapulted Apple to a position as one of the biggest companies (and currently the richest company) on the planet.
Want another example? Uber saw that most people don't enjoy the typical taxi experience of waiting in endless lines, then getting a not-always-pleasant driver. So it set out to solve that problem. Result? Almost overnight, Uber has become a billion-dollar company. Simple insight, huge result.
So this is all great news for Apple and Uber and their shareholders, but how does it apply to you as a financial adviser?
ASK YOURSELF TOUGH QUESTIONS
All valuable insights come from the ability to ask yourself specific questions about your business and answer them as honestly as possible.
For example, do your clients enjoy how you acquire them? Do they like how they are introduced to your firm? Most advisers I know do a lot of public seminars to bring in new clients. Nothing wrong with this model. It works, and the ROI is great.
However, we've also seen a trend of wealthy individuals' avoiding seminars. If you want to bring in rich clients, you may need to change your approach.
With that in mind, ask yourself these questions:
• Would high-net-worth individuals prefer to meet you at a wine tasting, at which they're introduced by one of their friends who also happens to be a client of yours?
• Do you facilitate these types of events and introductions in your business?
• What other fun events could you have to create more “collisions” between your clients and their high-net-worth friends?
These are the kinds of questions that are going to help you evolve your business to attract the types of clients you want.
YOUR OFFICE IMPRESSION
Examining how you first make contact with prospects is very important, but the process shouldn't stop there. You should also be examining every aspect of your onboarding process.
For example, what does it feel like to be your client? Here's how to find out. Walk into your office and pretend you've never been there before. What experience does it create? What impression does it make?
Pay attention not only to the general impression you get walking in the door but also to the details of the entire experience. How are you greeted at the front door? What sort of amenities does your office provide? Does your staff offer you a cold drink, hot coffee, or a freshly baked cookie as you sit down? Sit in your waiting room and look around. Do you see things that add to your credibility or that take away from it?
The reason you should ask yourself these questions is because potential clients' experience and impressions in your office are just as important as the method and manner in which they were introduced to you. Prospects' first office visit needs to reinforce and strengthen your personal brand.
CAN A FIFTH-GRADER UNDERSTAND?
Last, you should ask yourself questions about how you solve your prospect's problems. Remember, influence is the product of simplicity and clarity. Do you have a clear plan or process to solve clients' problems or concerns? Does your planning process add to the simplicity and clarity of their lives, or does it simply confuse them and make them ask more questions?
Your planning process should be so easy to communicate that a fifth-grader could understand it. If this isn't the case, try adding simple diagrams and step-by-step processes to take your clients from worried and concerned to secure and confident about the retirement plan you're proposing.
One last thought: Have you named your planning process? If not, you should. This is because calling it a “financial plan” or “retirement income plan” makes you sound the same as all your competitors. It's key to make sure you differentiate your business. If your process is different, give it a unique name and brand that your firm can stand behind.
Look, it's easy to get stuck doing the same things you've always done, even if they are “clunky” or “outdated” (like first-generation cellphones). The way we break out of that is through self-reflection and thinking critically about our business and the processes we use to acquire and onboard clients.
Just remember, if anything about your marketing, client-acquisition process, or office and brand creates confusion or frustration for clients, you're effectively limiting your own success.
I encourage you to review these questions more than once to start evaluating and redesigning your business for radical growth.
Brad Johnson is a vice president at Advisors Excel and can be reached at email@example.com.