Wednesday, November 25, 2009

The $100,000 Dollar Client


Seth Godin is a thinker, entrepreneur, and author. He created the concept of "permission marketing", where marketers obtain permission before advancing to the next step in the purchasing process. Permission marketing is the opposite of its evil twin...interruption marketing. Those of us in the financial services community all know what "interruption marketing" is.

In 1998, Godin sold his company, Yoyodyne, to Yahoo for $30 million. Since then, he has authored 11 books. His blog, Seth's Blog, is ranked by AdAge Power as the #1 marketing blog out of 976 ranked.

With Seth's bona fides out of the way, let's point to a recent post of his, entitled, "Embracing Lifetime Value". In this post, he says..."Few businesses understand (really understand) just how much a customer is worth. Add to this the additional profit you get from a delighted customer spreading the word...it can easily double or triple the lifetime value."

Point well taken. Applying this observation to the world of financial advisors, how much is a client worth? For example, let's consider a a client who has placed $1 million with their advisor. Let's also assume that the annual fees on this account are 1%, and the lifetime of the account is 10 years. (Maybe 10 years is a bit long for a time frame, but not unreasonable to assume for a good client who you like.) In this scenario, the lifetime value of this client relationship would be $100,000...right? (Of course, to be exactly precise with this scenario we would need to calculate a net present value of $100,000 as discounted by inflation...but that's too much for any of us in a pre-tryptophan kinda mood!)

What would you be willing to invest to keep a $100,000 client absolutely delighted? In other words, is your present Client Service Model matrix sufficient to satisfy your best clients, or are you falling short? Also...what would be willing to invest to find one, two, or three more $100,000 clients? Does your 2010 marketing budget reflect this?

All good questions, and food for thought on this Thanksgiving holiday.

All the best to you!

by Chris Holman

Thursday, November 19, 2009

The Gettysburg Address: Less is More


On this date in 1863, President Abraham Lincoln stood up in front of a crowd of 15,000 attendees, to dedicate a new national cemetery in Gettysburg, PA. He was not the featured speaker of the day. He followed Edward Everett, the Harvard University president and U.S. Senator. Everett had just delivered a  two-hour discourse that had described the Battle of Gettysburg in great detail, and had brought the audience to tears.

Lincoln pulled his speech from his pocket, and began in his rather high-pitched Kentucky twang, "Four score and seven years ago..." 10 sentences and 2 minutes later...Lincoln sat down before much of the audience had realized that he had even spoken. (btw...Lincoln did not read words that he had written on the back of an envelope, hastily composed on the train ride from Washington. This is an urban legend.)

Today, the Gettysburg Address is one of the most-quoted speeches in American history. In 272 words, Lincoln made an eloquent connection between the principles of the Declaration of Independence and the U.S. Constitution. Everett's 13,607 word oration? Not so much.

For an erudite discussion on this topic, you must read Gary Wills', "Lincoln at Gettysburg: The Words that Remade America".  In this masterpiece that was honored with the Pulitzer Prize and the National Book Critics Award, Wills provides a definitive deconstruction of one of America's greatest speeches.

by Chris Holman

Wednesday, November 18, 2009

Marshall Goldsmith on Change


Marshall Goldsmith is one of our country's most highly-regarded thought leaders and executive educators. Forbes recently put him on their list of "the most influential management gurus." His 2007 book "What Got You Here Won't Get You There", a NY Times best-seller, reveals one of the themes that runs through his writings, i.e. the same beliefs that lead to our success can make it very difficult to change our own behavior.

In a recent post on the Harvard Business Review, entitled "Don't Give Up on Change" Mr. Goldsmith discusses how, and why, change takes longer than we think. This is a timely piece for those of us looking ahead to 2010 with a desire to break free from some of our old traps.

Marshall Goldsmith offers these insights:
  1. To have a real chance of success at change, one must take personal ownership and have the internal belief that "this will work if, and only if, I make it work."
  2. Habits that have taken years to develop won't go away in a week. Set realistic time expectations for change.
  3. In setting goals, it's important to accept that real change requires real work, i.e. there is a price for success.
  4. Plan for diversions, and crises, along the way...that will distract you from your goals.
  5. Once a goal-setter has put in the effort to achieve a goal...and achieved it...it doesn't get much easier. Meaningful change requires a lifetime of effort.

In the words of  the brilliant German philosopher and writer, Johann Wolfgang von Goethe, "Life belongs to the living, and he who lives must be prepared for changes."

by Chris Holman

Monday, November 2, 2009

Mission Statements in Six Words



Ernest Hemingway was one of our greatest authors of short stories. "The Complete Short Stories of Ernest Hemingway" is thought to contain some of Hemingway's best writing. There's a personal story about Hemingway, most likely apocryphal, that he once won a wager where another writer dared him to write a short story of six words or less. Hemingway's purported submission was, "For sale. Baby shoes. Never worn."

Picking up on this theme, Smith Magazine has recently sponsored a project whereby they have solicited their readers to submit their own memoirs...in six words or less. "Six-word Memoirs" has become a New York Times best seller. This is a great read. The entries are alternately...funny, revealing and poignant. Here are some submissions: "Made costly mistakes, learned valuable lessons." or "Wasn't born a redhead. Fixed that." or "Outcast. Picked last. Surprised them all."

6-Word Mission Statements
It is a valuable exercise to apply this same practice to Mission Statements. As you most likely know, a Mission Statement is a formal written statement of purpose of a company or organization. The Mission Statement guides the actions of the organization, spells out its overall goal, provides a sense of direction, and guides decision-making. The Mission Statement provides a context or framework within which the company's strategies are formulated.


In my view, many Mission Statements seem to be overly long, trite, boring, and not very compelling. On the other hand, some of the best Mission Statements are compact, convincing, and inspirational. From the corporate world, here are two standouts:


Google: To organize the world's information and make it universally accessible and useful.
3M: To solve unsolved problems innovatively.

6-Word Mission Statements for Financial Advisors
For financial advisors, your Mission Statement should answer the fundamental question of, "What gets you up in the morning?" or "What do you do, and why do you do it?" Additionally, you might also answer these important issues, "Who can you help?" and "What is your influence?"

Applying all of this to create Six-Word Mission Statements for financial advisors, here are some attempts:
  • Wealth Management, and peace of mind.
  • Make a difference. Lead. Coach. Teach
  • Create strong relationships. Commitment to clients.
  • Independent ideas. Topnotch advice. Independent wealth.
Now that I have the hang of it, here's a 6-Word Mission Statement for my own firm, ClientWise:
  • Clear and focused. You too. ClientWise. 
Can you come up with a 6-Word Mission Statement that works for you, your clients, and future clients? Just wondering...

That's all for now. All the best!

By Chris Holman