Comments

Don't know the answer to your question Steve but I know I would much rather be a part of meeting number one than meeting number two.

Posted by Trevor Gay at January 28, 2008 12:04 PM

Agree w/your bias. But perhaps they "know" what they're doing. Perhaps their model is consciously aimed at highest-current return. Perhaps management explicitly rewards current-not-future (the norm in incentive systems).

If you're on good terms with them, it might be worth asking them.

Posted by jeff angus at January 28, 2008 12:25 PM

I would choose the relationship first.

Posted by Dan Schawbel at January 28, 2008 12:37 PM

There was a line in a Muppets movie that said, "Peoples is peoples." It doesn't matter what you are selling or talking about. Being nicer will win (or at least I hope it will).

Posted by Joel Heffner at January 28, 2008 12:55 PM

Reading the question initially, I wondered if there was a catch. Had I missed something? The first strategy seemed at glance so clearly the obvious choice. But I liked the second strategy with a solid process, incremental progress-to a lesser or greater extent- and metrics. If the advisor's products had in fact produced measurable profits for the client, why not use this opportunity to both show the client the leadership applied and further introduce leadership to increase profits? Hopefully, if this is an annual meeting, the advisor has already built a relationship with the client. (Keeping it requires active listening and response.) So, in this regard, I'd choose the second strategy.

Posted by Judith Ellis at January 28, 2008 1:01 PM

Steve

ANNUAL!

What's wrong with continuous?

Sorry it is the IT in me, we can measure, monitor and inform in real time? Can't we? Why shouldn't our customers have acess to the same tools and information we use to manage the process on a continuous basis, ask for this next time you meet with your supplier, they will tell you they can't, you tell them that is rubbish!

Innovation as part of the contract, the what have you changed today is very much that opportunity to offer your solutions (yes occasionally be sold too! it may help?), not on an annual basis and not by trotting out the MD! What does he/she know of what's been happening anyway!!!!!

Keep them customers close and love them.

Trust all is chaos in 2008!

Patrick

Posted by Patrick at January 28, 2008 2:15 PM

On an individual meeting basis I think the success of both strategies will depend on how its presented by the adviser. If the first adviser comes across as only interested in relationship and not performance I know I'd walk. And we've all been in meetings where an adviser was only interested in making the next sale and that also stinks.

But from a company perspective I definitely think the relationship strategy is better. Human tendency and other incentives (like the advisers manager) will most likely ensure the sales opportunities are presented. Relationships are much harder and I would want to encourage them.

Posted by Brad at January 28, 2008 2:41 PM

And...is "perfunctory" annual meetings (or any others) a mere expectation or reality? If either is true, how can we change our perceptions and/or bring insights to the client? (After all, whatever we do is about the client, even our relative perceptions.) Is it how we do what we do through innovation?

Posted by Judith Ellis at January 28, 2008 3:00 PM

Steve,
Having been exposed to financial advisers of both ilks, I certainly would want an to have an adviser from company #1. When these people take the time to understand my individual situation, investment needs and goals I feel much more comfortable than if they sit down and dispassionately review my current position before launching into their spiel.

Last time that happened, I fired the guy almost on the spot and took my money to someone who seemed to care a little more, listened to me and talked a lot less. Oddly enough, I am not sure which one gave me the better return, but I trusted the new guy a lot more and felt that if a crisis ever happened, he would respond personally rather than some institutional investing tool he had sold me.

Posted by Andrew Hayden at January 28, 2008 3:15 PM

Patrick's point about continuous contact is, of course, true, and I think it is clear that the relationship oriented company will be more likely to create a continuous dialogue. (I discuss the process of creating a continuous, ongoing conversation with customers in Chapter 3 or We: The Ideal Customer Relationship.)

And, of course, Trevor is right on. Which feels better to the customer. Really the only question that matters.

Judith - I'd love to hear more on your view about strategy #2. Wouldn't everything you say be easier to accomplish in a relationship-building encounter than in a sales presentation?

Posted by Steve Yastrow at January 28, 2008 4:38 PM

Strategy #1 is for reporting bad years. Strategy #2 is for reporting good years. So I want to hear the #2 sales pitch: "You've done really well last year with your ABC portfolio, so how about investing in our XYZ fund?"

Posted by Mike L. at January 28, 2008 4:52 PM

Agree with some comments. I don't think the annual review should be relationship building. Reinforcing yes, building no. As a client the BS meter goes off the charts when firms try to sell (soft or hard) at these types of deals. My business is what matters the most and firms that understand this work with me continuously not at a point in time.

Posted by Darin at January 28, 2008 4:53 PM

Steve - I listened to someone speaking yesterday and she said;

'Our minds are like parachutes - they are only useful when they are open'

Not at all relevant to this brilliant discussion of course but I just needed an excuse to share a wonderful quote that I hadn’t heard before and that is so apporopriate in 99% of my life and work.

Shall I take my pills now Nurse? :-)

Posted by Trevor Gay at January 28, 2008 5:25 PM

Steve-Thanks for the invite to share further. EVERY encounter with EVERYone we meet in business or life is about relationship-building, a sincere discovery encounter. This particular meeting, the annual one, is only an extension one encounter of the success or failure of our performance numerically and relationally. This meeting, the annual one, is not a "sales presentation" for relationship-building; this should have happened throughout the year. (We are all selling something. Here? Sell success.) This meeting, the annual one, is to look at the hard cold facts--yes, hard cold facts-- of where we are in relation to both numerics and relationship-building. Has the leadership and relationship resulted in the desired execution? And...yes...it is abundantly clear that on-going metrics are necessary. But I doubt the belief that this meeting - the annual one - is not needed as a corporate moment of reflection, not to the exclusion of "real time" metrics.

Posted by Judith Ellis at January 28, 2008 8:33 PM

... I have been a fee only advisor for 20 years, and in the biz for 30+... and I practice Number 1 but to be frank, your question is which will generate the most revenue? Sorry, (except for a small percent of client types)the answer is Number 2

My proof? who are the biggest, highest revenue firms in the world and what do they do? Number 2

tom sullivan

Posted by tom sullivan at January 29, 2008 12:05 AM

Here's what I think: If you have a series of relationship building encounters, over time, major milestone encounters like an annual review will build the relationship further. Will this result in more additional revenue, over time, than a systematized hard-sell once a year? I certainly believe so ... especially when we consider that most people in our marketplace are more likely to buy something than be sold something.

Posted by Steve Yastrow at January 29, 2008 2:10 AM

I prefer, I want to work with supplier number one, I want to work like supplier number one. But, I can distort Tom Peters' words, and think that a company is not build to last and "over time" is to long time. Perhaps company number two can get more revenue in the short term. In the long term... neither one will still exist

Posted by Carlos at January 29, 2008 3:06 AM

The key thing for me is honesty. Ironically method 1 could be perceived as less honest. I know I am dealing with a sales guy here lets not beat around the bush - the "relationship" is only going to last as long as I am putting business their way.

This may come a shock for people who see me rant on this board for more touchee feelee stuff!

My full answer is a bit of both - I want the salesman to be upfront about what he is trying to do sell me something - but during the conversation I want him to be using excellent interpersonal skills (which in this case mostly means keeping his gob shut!)

To me the whole thing comes to honesty about "managing my investments" are they really doing this (evidence of monthly reviews of my portfolio and recommendations) or are they simply selling on an annual basis.

One of the eye openers I had a while back was the difference experienced between commission based financial "advice" and when I was in the position to pay a flat fee for a consultation

Posted by PaulH at January 29, 2008 3:56 AM

If the firm is market focused, there is no need to "manipulate" in order to sell a new product. My vote is for the first firm.

Jay, from Bangalore
http://ideaburger.blogspot.com

Posted by Jayakumar Hariharan at January 29, 2008 5:53 AM

While not always, the financial / investment world can be inhabited with some dark souls. People should look after their money themselves. Drive your own bus and be careful who gets onboard.

Posted by Andrew Bleke at January 29, 2008 7:23 AM

It is not a matter of word distortion, manipulation, nor a hard or soft sell. It's about leadership. It's a matter of leading the client. At this meetinq the question is: have I lead the client well? If yes, great! How can we move forward still? If no, ouch! Can we move forward with this new initiative? If not-onward! Disingenuous motives is my pet peeve. It is very important to acknowledge the big white elephant on the table. It exists! We ALL know that numerics is relational. If the numerics are off, so is the relationship. PROFIT IS BUSINESS! Now the question is: HOW WE DO WHAT WE DO WHEN WE DO IT. At this meeting, show your leadership success (numerics) and the relationships in the room will be assured. The big white elephant on the table is numerics. At this meeting, look at them honestly.

Posted by Judith Ellis at January 29, 2008 8:09 AM

PaulH-What beautiful words! Jeff Angus' too! And Tom Sullivan's! Thanks all! WHO'S AFRAID OF VIRGINIA WOOLF (OR TOM PETERS)? Where's Tom? Is it me? Or simply cyberspace nano seconds? It feels like he has not had a post or comment in eons. WHO'S AFRAID OF TOM PETERS? I'm not!

Posted by Judith Ellis at January 29, 2008 9:06 AM

This discussion reminds me of the heated discussions we used to have about staff annual appraisals in the National Health Service. My view is predictable I guess. Annual employee appraisals are absolutely pointless if they are ONLY to do with salary uplift; ‘how much can I screw out of the system’; or ‘how can I screw this employee.’

If staff appraisals have any use whatsoever in modern management it is that they are seen by BOTH manager and employee as a positive opportunity where the employee discusses with the manager ways in which the employee can develop.

So sad that, in the NHS at least, employee appraisals are still largely used as a stick rather than a carrot.

Posted by Trevor Gay at January 29, 2008 9:24 AM

Dear Wise One, Trevor-Forget the stick! How about a boot! Of which I have gotten years ago for not being able stock shelves fast enough to meet the quota. Boots or sticks are NOT inherently bad! Again, it's a matter of how we do what we do. Is this discussion becoming convulted or circular? Maybe it's my head. Perhaps my ego. I don't know.

Posted by Judith Ellis at January 29, 2008 10:37 AM

The first one, definitely.

Posted by David at January 29, 2008 4:57 PM

#2 must have been JP Morgan. I am actively looking for a new firm to deal with after ranting at a group of suits clearly wanting me to spend more and get out within my allotted time frame. I am furious....

Posted by Kate at January 29, 2008 5:37 PM

Judith - great observations - When my kids were teenagers every argument was circular it seemed to me ... so I'm pretty used to it :-)

Kate - you are doing the right thing - Wonderful to see blind rage! Staying furious will only hurt you and not the firm - they couldn’t care less. There are many great people out there who live by option one and you will find them. Channel your anger to find the right people. Good luck – I made the decision to get out from the option one world three and a half years ago and I will only 'go back' there when hell freezes over … in the words of Don Henley of The Eagles of course :- )

Posted by Trevor Gay at January 29, 2008 6:26 PM

We don't have to choose between 1 or 2. The answer is a combination of both 1 and 2. The benefits of No. 1 are obvious; not so with No. 2.

As Tom P. and others have said, "Sales is not a dirty word." We're all selling something.

Any conversation is an opportunity to sell. It's all about the intention behind the sale. If there is real (intended) value in the offer, what's wrong with that?

If the intention is less than admirable, then the sale is just serving the advisor, and, long term, that can't be better for the firm or the client.

The statement, "...the advisor can easily sell additional products...," sounds less than admirable but maybe that's just the way I'm reading it. It's all about intention.
...

Posted by Jeff Pasquale at January 30, 2008 10:48 AM

Client-focused advisors (as opposed to sales-focused advisors) first identify client needs/wants, then consider solutions that may involve product sales. The annual review offers an opportunity to cover a range of topics much broader than simply portfolio performance, at least for advisors whose business models and capabilities extend beyond investment management. The relationship can be deepened simply through the conversation that identifies new concerns or unmet needs. The "product sale" discussion that occurs after the advisor understands the need and researches alternative solutions adds a subsequent opportunity for relationship building. Pity the advisors (and their clients) who have been brought up to believe that they must structure virtually every interaction as a product sales pitch.

Posted by Frank Reid at January 30, 2008 2:51 PM

Months ago I was in JP Morgan getting a signature guarantee where they took their time and every opportunity to sell, sell, sell. I left without wanting to work with them, ever.

Recently, I went to another organization for a financial review, and the guy told me things were in pretty good shape and he really didn't have many improvements to suggest to the portfolio. My impulse...after leaving...was to figure out a way to send more money for him to manage.

First scenario is much more powerful.

Posted by Perspective at January 31, 2008 9:35 AM

Well, this has been pretty well picked over, but... I'm a relationship person and you build a relationship with me by being knowledgeable.

Based upon the comments, many people seemed a bit confused, assuming that a good relationship with a vendor DOES include targeted sales; based upon a knowledge of me.

We have all been customers of strategic relationship based people at companies that get purchased or change focus. Try something though, as a mind exercise. Think about how you felt for the person on the other side of the table, your friend, who was forced to sell, sell, sell, indiscriminately to you.

cheap viagra in usa

It almost made you squirm. It might have even created a sympathy purchase or two, but admit it, you felt very happy for that person when you learned that they had moved on.

Just my two cents...

Posted by Ben Tallman at January 31, 2008 8:11 PM

About a year ago I inherited some money that I wanted to invest for my retirement (about 4 years away). I had a couple of discussions with investment advisors who asked perfunctory questions about my plans, then launched into a sales pitch for the product du jour. The advisor I ended up using was the one who asked lots of questions and tried to understand my specific plans/goals/needs before suggesting how I should invest my money. Maybe, in the short term, the other firms will make a lot of sales -- but, over the long haul (and, based on my heredity, I'll be around for quite a while), the advisor I chose will probably make more money by holding onto her long-term clients, rather than having to constantly scramble for new ones.

Posted by Paula at February 1, 2008 6:52 PM

Well really is important have a plan and one strategy first - to display the company your results after i think this second - a profile to investment : conserver agressive moderate third - to search better alternative of investment fourth - to show advantage dis-advantage are four step believe very important necessary for a relationship adviser/client i believe meet in conference in year bah!!! is to only to travel and relax well i think....

Posted by JOSE GILBERTO at February 8, 2008 6:51 AM