Advisors lose referrals and stunt their sales opportunities, because they’re largely undifferentiated from each other.
What’s the difference from one accounting firm to the next? It’s a regulated profession, and every firm basically offers the same services: tax, audit, assurance and risk. The two primary drivers for clients to switch accounting firms is poor communications on the part of the advisor, or the advisor messed up (which doesn’t happen very often).
The same can be said for insurance brokers, lawyers and financial advisors. There’s not much separating one advisor from the next. All they’ve got are their relationships and industry experience.
The lack of differentiation leads to a problem for partners and customers: who should we refer?
I know dozens of investment advisors, but I’d be damned to know who to refer first. I could give you a handful of names, or not refer anyone because I don’t want to play favorites.
Relationships are weak differentiators
Professional services firms hold onto relationships as their most important marketing asset, but that belief is limited.
Relationships are powerful, but they’re not differentiators.
For example, a mid-size accounting firm I know rotates their referrals through a bank of advisors. They have a little database of lawyers, financial advisors and consultants that they have vetted and believe in, and they rotate client referrals through the list serially.
It’s a fair way of spreading the love and supporting their partners, but it highlights the problems advisors face. Relationships are not enough to secure top of mind awareness and consistent referrals.
Advisors are forced to be average
Advisors have a branding problem. In a regulated market all the advisors are trained and certified to deliver a standard level of expertise.
Every professional services firm, no matter the sector, offers the same types of services as their peers. There may be nuanced differences in the size of their firm, location, customer approach and expertise, but that’s splitting hairs.
The system is designed to create a level playing field, but it prevents advisors and firms from standing out.
Break free of the standards
Break through the clutter, and choose a niche you can own. What can you do better than anyone else in your sector? What’s the one thing your brand can be known for?
People look for clear points of differentiation when making a referral. Make it clear and obvious that you’re not just another nice person who cares about his clients. Your customers need more than that. Put a stake in the ground and define your niche.