The “Supplier Proposition”
Do you have clients that seek the advice proposition that I call the “Supplier Proposition”?
You can identify them by their focus.
Without trying to sound obvious, they only seek what you have.
By that I mean, they are less interested in you ‘getting to know them’ or filling in all the myriad of forms than they are simply trying to ‘roll over’ their super, or ‘get a new loan’, or ‘get a better return on their investments’, or ‘set up a self-managed superannuation account’, or ‘get insurances updated’.
They are nice people (as all your clients are!), they generally take your advice regarding their specific need, and once purchased, they aren’t as keen for your annual reviews unless they have another specific need or they aren’t happy with their situation or need a change.
On a scale of 1 to 10, the complexity of your advice provided is closer to 1 than 10. The advice isn’t difficult and is something your firm can do in it’s sleep so to speak.
These clients focus on value-for-money (particularly low pricing), convenience, simplicity and often prefer the security of brand names.
But they struggle appreciating where the value is in second, third and on-going years.
I refer to these clients seeking this proposition as the “medical centre” client.
More interested in obtaining the drug, or immediate advice for an immediate solution than the establishment of a on-going relationship.
Their needs aren’t complex, they seek a product rather than the on-going service. For their own reasons, they don’t seek on-going relationships with specific advisers as they see their need and value in the short-term solution or advice.
I reckon the banks, insurance giants, industry funds and on-line direct groups will inevitably own this proposition. These mega-financial groups are no different to Coles, Woolworths, Optus, Telstra, Microsoft, Qantas, Virgin and other industrial giants who strive for their nirvana of ‘product market share‘ by their cost cutting, distribution and marketing machinery. When these groups talk ‘customers’ they mean ‘product distribution’.
These giants will pour millions into their social media and bricks and mortar distributions offerings as they deliver compliant, safe, cheap and template-driven cookie-cutter advice.
Don’t get me wrong, they will offer a much-needed service.
But don’t be fooled that boutique advice firms can make money from the supplier proposition long term. The one area they can’t compete is the ‘face-to-face’ aspect of advice. But those visiting medical centres aren’t as interested in that component.
There are three other propositions where the boutique advice firm can prosper, but woe those thinking their supplier proposition will serve them well long term.
What do you think?