Most businesses are classified into a broad category of specialising in products or services – the tangible or the intangible.
As organisations that provide services, a financial planning business should have an innate understanding of how to use their intangible assets for growth.
Yet many advice firms still undervalue the role of intangible assets like brand, research and development (R&D) and even human capital in their overall valuation and pricing structures.
In 1981, Economist Theodore Levitt suggested that the industrialisation of services presents a unique problem for organisations that specialise in the intangible – [clients] usually don’t know what they’re getting until they don’t get it. 1
So, how do you turn the intangible into the tangible and help your clients understand the true value of financial advice?
In his seminal paper, Problems and Strategies in Service Marketing, Professor Leonard L. Berry, coined the term “managing the evidence”. 2
By managing the evidence, organisations may be able to capitalise on their unique intangible assets.
For financial advisers, this could translate into a routine of regular communications that reinforce the value of advice and how much the client is valued. It could be a seminar or video series with happy clients. Use your imagination but the key is to show the evidence – make the intangible tangible.
Communicating intangible value for profit creation
Rob Jones, the Director of Peloton Partners, specialises in helping firms learn how to communicate the value of their intangibles for profit creation.
According to Jones, “Firms need to ask the question of why a client would stay with them and base their service proposition around that.
“It may take years to understand some clients and the majority of the time, the products and investments that may have been relevant initially, won’t be relevant later. But a good communications plan, foresight and tapping into a client’s values will help tackle some of the challenges that come with both personal and market challenges.”
At the end of his research, Theodore Levitt arrived at the conclusion that for organisations to thrive, they need to learn how to industrialise the intangible.
Given access to the resources and information that we have today, there’s no excuse as to why firms aren’t capitalising on the intangible factors that make them unique.
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.
1 John M. Rathwell, Marketing in the Service Sector, p. 58.
2 Leonard L. Berry, “Service Marketing Is Different,” Business, p. 24.