Every now and then I find myself having a conversation and wonder, much later, if we were actually talking about the same thing.
Client engagement is a case in point.
Most, if not all, advisors I speak with tell me client engagement is a goal. At the same time, I have yet to find two people who define it in exactly the same way.
The reality is that it’s easy to set goals that ‘sound right’. But it’s very hard to achieve those goals without a clear and shared definition of exactly what you're aiming for and what drives you toward that outcome. And yet it happens all the time.
The use of the term ‘client engagement’ is further complicated by the fact that it’s both an outcome (an adjective) and a process (a verb).
To put it more bluntly: Don’t set client engagement as a goal if you can’t define it, measure it and understand what drives it. Otherwise, it’s little more than a platitude.
We naturally associate client engagement with the depth of the client relationship – something very intangible. Accepting that would be to say “you’ll know it when you feel it” which is light, at best, as a business strategy.
And while it’s easy to believe it’s not something that can be measured, we beg to differ.
Years of gathering and analyzing data have allowed us to create a measurable standard for engagement and, importantly, to understand the drivers.
For the purposes of our on-going investor research and for our work with individual advisory firms, we identify Engaged clients based on a combined rating of their satisfaction with the advisory relationship and their actual referral behavior.
On that basis, only 26% of high-net-worth clients are Engaged and yet 93% are somewhat or very satisfied. That is, of course, because satisfied clients, while wonderful, can be very passive.
A satisfied client may be happy but passive. An Engaged client is happy and is telling the world about the work you do.
Because the definition incorporates the quality of the relationship and referral activity, it’s aspirational. And that’s ok, because the real goal is to understand what causes a client to be Engaged and to use those findings to drive the overall experience.
But all of this begs another question. Why should you care?
Engaged clients are more loyal.
Share of wallet is higher among Engaged clients
Engaged clients are less likely to be concerned with short-term market volatility, focusing on the long-term.
Engaged clients perceive higher value relative to fees paid.
Engaged clients are more confident about their financial futures.
So yes, client engagement is not only measurable, but a goal worth pursuing. There is a tangible return for the business and for the client.
Client engagement is not only measurable, but a goal worth pursuing. There is a tangible return for your business and for your clients.
But we’ve known this for some time. At Absolute Engagement, we started talking about client engagement as a meaningful and tangible goal in 2008, before it was cool.
At that time, everyone believed that satisfaction was enough, but the data told us a different story. As we looked at the data that book-ended the period between 2008 and 2010 it became clear that satisfaction was being impacted by market conditions whereas engagement was something deeper.
It also became clear that while achieving client engagement was a goal worth pursuing, we needed to understand the path from here to there. And the data tells us something about that as well.
Next week, I’ll share some of the highlights on the drivers of engagement from our industry research. That comes with the obvious caveat that the only thing that really matters is what matters to your clients, not to the average client. But it’s a start.
Thanks for stopping by,
P.S. If you're interested in learning more about how Absolute Engagement can help you reveal and respond to the true needs of your prosects and clients, click here to learn more or book a time to discuss your goals. We help you actively integrate the voice of your prospects and clients to drive personalized engagement, at scale.