In 1997, marketing guru Harry Beckwith released his formative book, Selling the Invisible.
In it, he highlighted the challenge that service businesses- from home-based consultancies to multinationals- face in adequately communicating their value.
Despite the considerable amount of resources that organisations put into research and development (R&D), human capital and other intangible factors that contribute to improving the quality of their services, little of this is considered in the overall valuation of a business.Today, financial advice firms are still falling into the trap of not adequately communicating their value or setting pricing structures that align with long term profit creation and viability.
Rob Jones, the Director of Peloton Partners, advises that it’s not too late for firms, even those that are well established with legacy clients, to re-think their value.
He suggests that financial advice firms should start by going back to their roots and understanding their reasons for providing their services in the first place.
“Financial planning has long been about product and investment returns, but it’s not about that. At the heart of it, it’s about the clients and their trust in their financial adviser,” says Rob.
Centrepoint Alliance Management Consultant, Jason McArthur, agrees. “I’m a big believer that for anyone to achieve both personal and professional success, they need to know their ‘Why’. Why do they do things, why are they in financial planning and why do they provide advice?”
Rob Jones recommends establishing a clear client value proposition (CVP) to answer the question of why.
According to Mr. Jones, one of the main reasons firms fall into the trap of undervaluation is, “Advisers believe wrongly that they’re doing very little for their clients when they’re doing so much more.”So, how do advice firms start conveying their true value?
It should be as simple as planning, communicating and then profiting.
During the planning phase, firms should establish a strong business plan around a clear CVP. Using that as a launching pad, firms should then ensure all levels are able to communicate the goals of the business plan and CVP.
To better understand how to capitalise on your intangible assets, make sure to register to view the recording of Centrepoint Alliance's Future Unlimited webinar with Rob Jones.