The Seth Godin book, Purple Cow, is well worth acquiring, then reading… then re-reading. The basic premise is the importance and power of “remarkableness” to a product or service really taking off. Something we can all pay heed to now and again.
However, Seth (note first name terms!) also reminds us in Cow of the importance of an existing client base for the effective promotion of new products and services. These loyal adopters of your products and services have effectively given you permission to talk to them about other stuff you have to offer.
And, so the theory (and practice) goes, at least some of these’adopters will be evangelists (or sneezers) for your product – extending the highly valuable “by recommendation” group that has given you permission to talk to them about other things.
In the book, the example of Pearl Jam was used. Apparently, between 2001-2002, the band released 72 live albums all available through their website. They were selling to the converted, not trying to interrupt strangers, say, through TV campaigns and in general record stores. Once you have permission, it is much easier to make a sale.
The principles play equally well in relation to financial services/advice.Focus new offerings on your existing client base, serve them well and encourage (or just let happen) recommendations. The marketing cost is low and the margin on sales will be high – a good combination.
You need to have developed and maintained a reasonable sized client base to start with but most advisers who have been in the business for any time will have this.
The value of regular relevant communication with your clients to maintain your currency and visibility cannot be underestimated – it is this that will keep your all important permission rating high.
And there is no shortage of stuff to talk about.
If you are into advising on investments, the latest turmoil in the markets will mean most clients will be desperate for advice, guidance and reassurance on what to do. And once that has been decided, there is the tricky and important matter of product wrapper selection – once the Isa/pension options have been exhausted.
The 50 per cent (and even 40 per cent) income tax rate is a great incentive to
- look for capital growth and/or
- look for ways to minimise and defer tax on arising income
Satisfying either of those two objectives in a way that does not compromise the appropriateness of the portfolio in relation to the investor’s expressed attitude to risk can deliver tax performance. Getting this right can have just as big an impact on the bottom line as portfolio performance. Well, almost.
SME owners will be interested in tax-effective investment and removal of funds. Nothing new there but the impact of the disguised remuneration provisions will need to be carefully considered. And these are not easy.
However, this means that knowing about how they work could be quite a useful point of differentiation for advisers, especially if you are doing business with or through the client’s accountants.
And for those businesses with employees, there will (or at least should be) a modicum of interest at least in the forthcoming auto-enrolment provisions and what they could mean. Experience shows that there are likely to be a significant number of under-informed clients.
Employers will be keen to know (and thus value answers in relation to) what does it mean for me? When do I need to worry about it? What are the costs? What are my choices? All stuff that the SME adviser should be able to respond to or be proactive about.
Parents with young children will be interested in the junior Isa and alternatives linked to the burgeoning costs of higher education. I could go on. If Ian Dury (rest his soul) were alive and remotely interested in financial advice, he might be tempted to re-release Reasons to be Cheerful and rename it Reasons to be Proactive. He would just have a lot more material than “one, two, three” would limit him to.