No Matter What You Think…Any Client Is Not Better Than No Client.

The Qualifying Conundrum

This week I’ve spoken with three different financial advisors about a very important factor when adding new clients: Not EVERYONE is going to be a good client/customer fit for you.

The difference in whether the client will be a good fit or an ill-fit is found in the criteria you have to qualify them as good clients…or ill-fit clients.

Learn from My “Bad”

I recently had a prospect who made me question whether he was going to be qualified or not from the very first conversation. He was referred by someone [I trust] who thought our services were just what was needed.

During our first conversation, the prospect, we’ll call him Yani, told me exactly what he wanted and when he wanted the service delivered. What he wouldn’t share was a budget (Oh, we’ll figure that out when we see the suggestions) or why he wasn’t working any longer with the consultant he had in the past (I don’t see how that is relevant when I just told you what I needed done, you can either do it or you can’t.)

I asked about timing to make a decision (Within the next 3 days to meet our timeline.)

I didn’t want to take the next step, as Yani didn’t seem like a good fit, but he was a referral from a great source that I didn’t want to disappoint. I decided to take the 2nd meeting and proceeded to prep a limited recommendation.

Before presenting the recommendation, I explained that I had some concerns regarding “our fit” in working together. He and his partner explained to me that they were “difficult buyers”, but great clients once they made the decision.

I was still skeptical and yet took the next step, another 30-minute meeting and another 45 minutes of prep for a final recommendation.

Guess what happened? The proposal meeting lasted 20 minutes. Yani said he had what he needed, would not set a next step, and has been unresponsive for many weeks now.

Yikes! Yes, I should have known better. It just goes to show that even knowing to look for specific clues or criteria, I bent. I could give a lot of reasons why, but the fact is, I wasted time and energy I could have put into so many more productive endeavors.

Qualifying Completely

I suggest if you find yourself not working with whom you best believe you should or have too many (which could be just 1) pain in the arses – clients who demand more time/attention/brain space than they are willing to pay for – to look closer at your criteria for clients.

It’s Not Just About the Numbers

Criteria is multi-faceted and should take into consideration quantitative and qualitative factors.

Quantitative criteria is important so you are sure to get paid what you are worth; your firm is profitable; and you can afford the team, tools, and overhead needed.

Possible quantitative criteria:

  • Investable assets today
  • Investable assets in the next XX years
  • Annual income
  • Size of business
  • Ability to afford the fees either through investments or income
  • Size of one-time project

Collecting this information is pretty straight forward – when you have enough trust and credibility – ask for it.

Quantitative criteria/factors are important. Yet there is more to ideal clients, isn’t there?

The Qualitative criteria should not be ignored. Your clients are people and different people will be a better fit for you to work with than others.

These intangibles are going to create a reaction when you hear different people on the phone.

  • Good-fit clients: “Great! I’m glad to talk with them/work with them.”
  • Ill-fit clients: “Arrggh. Them again?”

Possible qualitative criteria:

  • Niche fit — this could be their career, life stage, personal hobbies, etc.
  • Personality — if you can’t “connect” with them, they might not be a good fit. Shared interests make a more enjoyable working relationship as well.
  • Working style — are they someone who likes to pass things off and you enjoy that? Are they someone who likes control and will want to be involved in all the drudgery?
  • Decision making process and ability — this isn’t just for making a decision to secure your services. In your ongoing work with clients, there are more decisions to be made. Does how they make a decision fit with how you work? One advisor, Joe, needs quick decision makers and if they don’t make a decision to work with him quickly, he knows they aren’t a good fit. While Alex loves to nurture and walk the clients through each piece, step by step, and is as patient as anyone I have ever seen.
  • Willingness to pay — not the same as ability to pay. Willingness is their mindset for paying for professional services. Are they of a DIY mindset who only pays for services when they absolutely must? Or are they someone who willingly has someone taking care of their house, their legal situations, tax work, planning their trips, etc.?
  • Time and Attention demands – what are their expectations on how much attention you pay them? Will you need to be at their beck and call 24/7? Will they be impossible to get in touch with when things need to get done and you are left waiting…in limbo for answers or action? Do they procrastinate which then becomes your emergency? Some advisors like that, and others don’t.

There aren’t right or wrong qualitative fits – it’s up to YOU! If you are part of a team in your firm, you might have some variances of the qualitative criteria – and then you can pass those who aren’t a good fit to you to someone else on your team!

How, then, do you collect this information? While you could ask, “What qualities do you have that make you a good client?” That’s not a question most prospects would know how to answer…or could probably answer in the right perspective.

Instead, you could ask:

  • Please tell me about the best “service” relationship you have. What do you value most in that relationship? What do you wish was better?
  • What’s the most valuable relationship you have outside of your family and work?

And that’s still not enough – you need to pay attention to EVERYTHING they say and do throughout your process and interactions.

Observe everything they do and say which shows who they are. Are they realistic on deadlines and next steps; how much detail do they need and does it fit best with what you provide; do they take action on what they are supposed to in the timeframe they committed to?

What You Don’t Want to Hear

At about this point in the conversation, when discussing criteria, advisors ask, “Well, if I am just starting or really need revenue quickly, shouldn’t I just work with anybody who can pay for my services?

The short answer: That depends on how much you need that business.  Seems like a non-answer? It’s meant to be.

What you should do is think REALLY hard about whether any business is good business today… 12 months from now, 2 years from now.

I strongly encourage you to be more selective. Ill-fit clients early on remain ill-fit clients later on, and firing clients isn’t as easy as you may think.

You may think, But they could be a great referral source.

While that is true in theory, consider this, ill-fit clients often refer more ill-fit clients!

In the early stages when you need to drive revenue, build credibility, and seek testimonials, you may have “light” criteria for qualifying. That’s good – just don’t have zero criteria.

You may tighten your qualification criteria as you advance your business, but if you start with the “anyone who needs my help” approach, you will waste time and resources working with misfits that keep you from the KEY actions you need to focus on for best fits.

Just for Team Firms

If you have a team of more than 2, there is more for you to consider regarding criteria. When you have advisors just starting to build their book of business, criteria can become a major source of frustration.

Clarify up front what will be acceptable. What can be stretched or bent. The amount of leeway they have. It will save you all a lot of frustration.

Final Words

Here’s a final tip for figuring out your qualification criteria. Identify your top 6-10 clients — those who you enjoy working with, are profitable, and have the right complexity for your services. Then, one at a time identify the specifics that make them ideal. Complete this review no more than two clients at a time to have a fresh perspective.

When all your existing ideal clients are reviewed, look for patterns and you’ll find the criteria.

Yes, it can be that simple!

Growing your client base is important. Growing your client base with the right clients is critical.