Is Your Advisory Business, Client Focused?

In the past, businesses primarily emphasized profitability and product outcomes. Success was measured by financial achievements, and promotions were often tied to these metrics. Over the last decade, however, we've witnessed a shift. Companies are now integrating broader behavioural KPIs such as risk scorecard ratings and softer measures like collaboration and teamwork surveys to repair the reputational damage caused by previous poor behaviours.

A 2020 study by McKinsey & Company found that companies focusing on broader performance metrics, including employee satisfaction and customer experience, saw a 20% higher profitability than those solely focusing on financial outcomes. This research underscores the value of a balanced approach.

Yet, it's essential not to be lulled into a false sense of security. While product and profit measures might seem to have been pushed into the background, they are still closely monitored. Profitability remains a key driver of shareholder value and the overall success of an organization. According to Deloitte's 2021 Global Risk Management Survey, 80% of firms continue to prioritize financial metrics as a cornerstone of their strategic planning, even as they expand their focus to include behavioural KPIs.

Success Stories: Balance in Action

Great organizations have mastered the art of balance. They excel in four critical areas: Clients, Business, People, and Platform. This balanced approach ensures long-term success.

Example 1: Amazon:

Amazon, for instance, has consistently invested in technology and innovation while keeping a laser focus on customer satisfaction. Their net promoter score (NPS), a key measure of customer loyalty, is one of the highest in the industry, leading to sustained profitability and growth. In 2023, Amazon reported a 15% increase in net sales, attributed largely to their customer-centric strategies.

Example 2: Salesforce:

Salesforce is another prime example. By focusing on employee engagement and customer success, Salesforce has maintained high levels of both employee and client satisfaction. Their annual revenue growth of 25% over the past five years is a testament to the effectiveness of their balanced approach.

Conversely, organizations that have failed or are in decline often continue to prioritize profits over client outcomes. They view their business as a mere tool rather than an opportunity to create a meaningful legacy. These organizations tend to neglect technological advancements and cling to outdated practices. Their people are seen as commodities, easily discarded when performance dips, rather than as assets to be nurtured and grown.

Today's Critical Questions for Leaders of Advisory Businesses:

1. Where do you and your business sit in the areas of Clients, Business, People, and Platform?
2. Is there room to improve?
3. Do you know where to start?

If you’re unsure about any of these questions, it’s time to reflect. The most successful advisors are those who focus on their clients' overall investment returns. By prioritizing client outcomes, profitability and new client referrals naturally follow.

The Path Forward

The Harvard Business Review highlighted that companies with high customer satisfaction scores outperform their competitors by nearly 202%. Focusing on client returns is not just good practice; it's a proven strategy for long-term success.

I invite you to reach out for a discussion on how to enhance your advisory business. Let's explore strategies that ensure balanced growth and sustained success. Remember, when you focus on client returns, everything else falls into place.

If this resonates with you, let’s connect. Together, we can transform your advisory business into a powerhouse of client satisfaction and profitability.

Happy to discuss if you have any questions.