We will help you understand the best ways to build this vital loyalty from your clients, determine ways to measure the success of this and consider the benefits that obtaining loyalty from your clients will have for you and your business.

Why is client loyalty important?

Client loyalty is a vital element to sustain your business and also a crucial part of enabling business growth.

Gaining and then maintaining loyalty from your clients brings with it obvious financial benefits for your firm, but there are many other benefits to be gained from obtaining trust from and forging a loyal bond with your clients.

Loyal customers are your best advocates.

A customer who trusts you, and for whom you have delivered on your promises, will be your biggest advocate. A loyal client is more effective than any marketing campaign or client-recruitment drive. Word-of-mouth marketing is highly successful, primarily because people place trust in the views of their peers, more than they would in a business’s marketing material. A personal recommendation for an adviser provides you with the best new client lead you could ask for. As Dharmesh Shah, co-founder and CTO of Hubspot, a marketing, sales and client software platform, said: "The more advocates you have, the fewer ads you have to buy." Look after your clients and they will, most likely, look after you.

Retaining your client base means you can focus on developing your relationship with your clients and delivering value.

With a loyal customer base, through regular client meetings and phone and email contact, you may find yourself in the privileged position of really understanding and knowing your clients. This relationship will enable you to provide a valuable service to them, delivering investments aligned with their interests and preferences and ensuring that the service you promised is the service you deliver.

Bonding with the whole family will increase the lifetime value of your client.

Building a long-term financial-advice relationship with your client and their family will enable you to understand their needs and goals more clearly, which can lead to the development of a long-lasting and valued relationship. By connecting with the whole family, you may find yourself in a unique position of understanding areas where you can offer additional value to your client through services or products specific to them, and by making the effort to build strong relationships with the individual and their family you can maximise the client lifespan, hopefully working with all members of the family for years to come.

How to build trust or loyalty

There are some straightforward actions you can undertake to ensure you start the process of developing trust and therefore loyalty with your client from the beginning of your engagement with them.

Some short headlines of actions you can undertake are:

These are all hugely important aspects of setting up a great client/adviser relationship so let’s look at them in more detail to drill down into the how and the why.

Engage fully with your client to establish their needs

Successful financial-advice practices take time to understand their client and to determine their investment goals and objectives. By fully engaging with their client, they can then tailor their advice to meet their needs. Fostering this relationship can ensure that a level of trust and understanding is nurtured, which in turn leads to client loyalty. Take the time to deepen the relationship with your client to establish trust. If your client feels connected to you, it is less likely that they will consider changing advisers.

Prioritise and personalise your clients

Make sure your clients know you are acting solely with their goals and objectives at the forefront of your mind and that they are important to you. Also, let them know their value by personalising their client journey. Use your client database to note key dates and important milestones in your client’s life (perhaps a wedding date, retirement or a birthday) and contact your clients specifically at these times and solely about these events. Including this sort of personalised approach to your service will set you apart from many competitors.

Understand the transaction from your client’s perspective

Clients are aware of the options of financial advice available to them in the market and no doubt will be targeted by numerous competitors of yours over time. With this in mind, your advice business needs to be ahead of the curve to ensure that you have communicated clearly the value you have brought to your client and show confidence around the fee levels charged and meticulous service provided.

Deliver on the service promises you have made to your client

Whether you mean to or not, it is likely that you make promises to your clients all the time. Your clients will hear these and perceive a commitment from you to achieve these, regardless of whether you may have viewed the promise in the same measure. You can only deliver on promises which are achievable, so ensure your promises are realistic and obtainable, and then make sure you deliver on them. If you find that you over-promise and under-deliver, then perhaps it would be wise to go back and evaluate the complete cycle of a client’s journey. Is the adviser promising something that the delivery team simply doesn’t do? Everyone needs to be aligned to the same customer journey to ensure that there are no shortcomings. Communication is key. If in doubt, check before promising, or don’t promise at all!

Be a good communicator

Advisers who obtain a loyal client base are those who are transparent with their charging structure and offer clear information about their service and offering. Good communication skills will ensure that your clients reach out to you for information and explanation, and this in turn develops the bond of trust and loyalty between client and adviser. Receiving all the information is both reassuring and empowering for your client.

Be reliable

Reliability and dependability apply to all aspects of your relationship with your client. This could be something as seemingly small as returning a phone call that you had promised by the end of the day. To the client, this phone call (and the fact you have done what you said you would) counts. In all areas of your business, let your client know that they can depend on you, you won’t let them down, and the loyalty and trust will follow.

Make loyalty relevant to everyone in your firm

If everyone within your firm understands the business model and the big picture, they will be better placed to determine the impact of their contribution to this. Business leaders should convey to all staff the importance of this metric and ensure that all staff are fully equipped to deliver on this.

Do not confuse loyalty with inertia

Having clients who remain with you cannot always be put down to loyalty, but rather to inertia. Loyalty is an ongoing and active choice made by the customer to remain your client, due to the value and satisfaction they receive from your services. Inertia, conversely, is the opposite – a lack of action – and a client who is with you due to inertia may well be considering engaging with other businesses. Retaining customers on this basis is not a sustainable strategy for long-term business growth and success. Clients should actively decide to stay with you through the value your relationship adds, rather than simply drift along out of a lack of motivation to change.

How to measure client loyalty

Measuring client loyalty will enable you to identify areas where you can make improvements to your processes, understand your client’s behaviour and decision-making in more detail (which can aid in developing future business strategies) and lead to increased customer satisfaction and stronger relationships with your clients.

So how best to undertake this? Here are a few ways in which you can measure client loyalty.

The length of time your clients have been with you

Have your clients been with you for months or have they been with you for years? Of all your clients, think about those who have remained with you the longest: what is your relationship with them like? Have you invested time in making sure you really know your new clients, their priorities, their situation, or any life changes that might be impending? Are your clients staying with you longer at this stage of your career than they did when you first started in the industry? Log this information and refer back to it at intervals to see if you are retaining clients for longer periods of time. Retaining the majority of your clients for a long period would infer you have established a loyal client base.

The amount of assets you manage for your client – is it a significant percentage?

Managing a significant number of assets for your client infers a level of trust that your client has put in your capability, the importance of which is not to be underestimated. Keep track of these percentages and ensure that they increase, not decrease, over time.

The number of client referrals you receive

How many are you receiving each month, or annually? Is this figure more or less than last year? From which of your clients do you receive the most referrals and why do you think this is? Are there clients from whom you haven’t received any referrals? What could you do differently with that client to enhance your relationship with them so they recommend you to their peers?

Feedback from your clients

Asking your clients for their views on your service, your reliability and your knowledge of the industry can provide a huge insight into whether the element of trust is present or if this is an area in which you need to invest some time. It is especially important to ask clients who leave your business their reasons for doing so. As Bill Gates wrote in his book, Business at the Speed of Thought: "Your most unhappy customers are your greatest source of learning." 

It is worth measuring these metrics on a regular basis to ensure that you are keeping on track with your client loyalty objectives.

Consult our action points at the end of this article for some quick ways to analyse your relationship with your client: what works, what could work better and how you could improve your client’s loyalty to your business.

Conclusion

Client loyalty is highly sought after by all companies in all industries. The benefits of having a loyal client base are plentiful and, as such, it is sensible to prioritise this within your business. All employees within your firm should be aware of the value of client loyalty and perform with this at the forefront of their focus.

American author, Jeffrey Gitomer, sums it up well with his quote: “Customer satisfaction is worthless. Customer loyalty is priceless.”

That is, perhaps, a motto by which to operate your business.

Action points