As important as soliciting feedback is, failing to take action on the recommendations your clients offer can wipe out all the benefits. It can, in fact, be worse than never having asked in the first place.
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The new study, Anatomy of a Referral, documents the importance of the role of feedback in client engagement. In the survey, 74% of engaged clients had been asked for feedback and, importantly, 72% reported that they believed their input was important. Systematically gathering feedback can be a strong driver of engagement. Ignore the advice, though, and all those benefits disappear. Let me offer an example of the implications of not following through.
I had worked with a financial planning firm that was proud of how thorough and detailed its financial planning process was. They found out through surveys and their advisory board that clients could not understand or appreciate the dense tables of numbers that populated their financial plans. They appreciated the firm's expertise and commitment to the planning process, but had difficulty relating to the output. The client advisory board recommended replacing much of the output printed in the financial plans with a few simple graphs.
Planners at the firm resisted. They were proud of the extensive plans that they wrote for clients. The firm did not make any substantial changes to its financial plans. Once enthusiastic advisory board members gradually stopped coming to meetings. Some of the firm's most engaged clients declined further participation. There was no meaningful change in the number of referrals the firm received. Eventually, the firm declined to renew our contract to run the advisory board. In the end, they held an advisory board because they thought it was the thing to do, not because they were open to change. Client satisfaction, and the number of referrals the firm received, did not improve. I cannot say what effect this experience had on the influencers who had participated on the advisory board, or how it affected what they said about the firm to others, but it cannot have been positive.
Ask your clients what you do well and what you can do to improve. If you want more referrals, make sure you act on that advice.
Get a free copy of my new white paper automatic Referrals for Financial Advisors, Leveraging a Client Advisory Board in a Referral Marketing Program, here.