In today's "news of the obvious," this just in: when clients are happy, they're more likely to refer.
Forgive my sarcasm... I suppose upon occasion, someone does need to actually go out and prove those things that common sense tells us are true. J.D. Power's latest survey reveals that what they call "highly committed" clients of full-service firms are five times more likely to refer than other clients. More newsworthy, perhaps, is the fact that the client's relationship with an advisor figures prominently in their level of satisfaction with the firm—and almost equal with investment performance:
"The study, now in its fourth year, measures overall customer satisfaction with full-service investors by examining seven factors that contribute to overall satisfaction. They are (in order of importance): competitiveness of portfolio (20%); financial advisor/broker (18%); account set-up/account offerings (17%); commissions and fees (13%); customer service representative (12%); convenience (11%); and account statements (10%)."
The study found that these "highly committed" happy clients were also 33x less likely to switch firms. If you're not sure how satisfied your clients are, it clearly pays to be proactive and find out.
Also worthy of note is the importance of referrals in bringing in new clients profitably, according to the Power study:
"'Recommendations naturally have a positive financial benefit by reducing marketing and acquisition costs, which directly impacts the bottom line for investment firms as more assets are placed under management,' said James Lohmann, senior director of investment services research at J.D. Power and Associates. 'New clients are primarily motivated by a strong brand image and recommendations they received from colleagues and family.'"
So, that's just one more bit of proof that referrals are where it's at.
How's YOUR referral strategy?
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