A lesson learnt from the Covid-19 pandemic is the necessity to re-evaluate the value your business adds to clients and how you assure clients you are committed to serving their financial needs.
These two aspects are addressed in part by your value proposition. This newsletter, which follows the theme in the two previous newsletters, Business Planning and Ideal Client provides tips on how to re-evaluate your unique value proposition.
A value proposition refers to the value your FSP promises to deliver to prospective clients and clarifies why clients should do business with you. It should introduce your brand to prospective clients by explaining what your FSP stands for, how it operates and why it should be trusted with their business. It should also convince potential clients that your FSP is their FSP of choice.
As such, a well-drafted value proposition can help you grow your business, retain clients and increase the lifetime value of clients.
To re-evaluate your value proposition, consider asking yourself the following questions:
- ‘Who are you?’ This should express the high-level purpose of your business, such as: ‘We help bring order to your financial life by assisting you to get your financial house in order at both macro and micro level. This entails investments, insurance, estate planning, taxes and household cash flow.’
- What do you do? What services do you offer clients and what ‘pain’ do you take away? For example, your services may aim to solve financial needs and fears, provide financial independence, help clients maintain their lifestyle when retiring, finance their children’s education, and take care of their family when they pass away. This may be done by providing investment management, risk and disability management, health and short-term solutions. It may include both personal and commercial lines.
- What is your process? This should define how you approach your services and what clients can expect from your process. For example: ‘The financial planning process produces a detailed financial plan that acts as a roadmap toward financial peace of mind. This plan is reviewed as clients’ financial needs or circumstances change.’
- Why should clients use your services? How do you persuade clients to do business with you over your competition? For example: ‘We believe you should join us, as we value our clients. We are competent, loyal and committed to you, your business and your family’s financial wellbeing.’
Your answers should align with your current value proposition. If there is any misalignment, you can tweak your value proposition until you are satisfied that it reflects your unique business approach.
Value proposition and brand
As a value proposition is a marketing document, you should also consider the concept of branding as you review your value proposition. Positioning your value proposition around clients’ perceptions of your brand – and branding in general – can additionally boost your business brand and contribute to your business plan.
Your brand is a result of all the things you present to your clients. It includes the colour and design of your logo, design of your website and the font used in your communication. It is your choice of product providers and the solutions you offer, your dress code, the way your phone is answered, and the overall office vibe. In essence, it is the client experience you provide that includes your culture and values. Your brand is the feeling created by your clients’ experience, and this makes your business unique.
Research among consumers, which mirrors the voice of your clients, indicates that:
- 88% say authenticity is important when deciding what brands they like and support
- 80% say use of a signature colour can increase brand recognition
- 79% say that user-generated content highly impacts their purchasing decisions
- 77% buy from brands that share the same values as them
- 73% cite customer experience as an important factor in their purchasing decisions
- 66% think transparency is one of the most attractive qualities in a brand
- 64% would buy from a brand or boycott it solely because of its position on a social or political issue
- 46% say they would pay more for brands they trust
- It takes 0.05 seconds for people to form an opinion about your website
- Consistent presentation of a brand can increase revenue by 33%.
The above research highlights two aspects. Your value proposition should speak clearly to clients. Secondly, authenticity and being ‘real’, combined with competence, is essential.
Value proposition and business plan
Your value proposition should also contribute directly to your business plan, as you can specify which key indicators should be measured. These could include the size of business conducted, commission and fees earned, whether income is paid once off or on an ongoing basis, and the number of product solutions and client referrals. You could also measure the extent to which your value proposition increases a client’s lifetime value.
These indicators will help you calculate the amount of revenue that can be generated from an individual or business client over the course of their lifetime as a client.
Focus on your ideal clients
In addition to helping you measure the overall performance of your business, your value proposition should specifically be positioned to attract those clients who fit your ideal client profile. This is the profile of your top 20% of your clients who generate 80% of your income.
Consider how confident you are that your ideal clients are satisfied with the service they receive from your business. What differentiated services do you offer your top clients? Do your senior advisors spend most of their time with them?
Taking heed of what clients want will enable you to draft a powerful value proposition that will benefit your FSP. Your value proposition will ensure your clients understand the value of your business culture, products and services, and how your services benefit them. This subtly confirms your business is their best available option. As a result, your business will enjoy increased client lifetime values, client retention, client referrals and an ongoing sustainable business even in tough economic times.
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Covid-19 tracker https://graphics.reuters.com/world-coronavirus-tracker-and-maps/countries-and-territories/south-africa/
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‘As a service’ business models: What it is and its benefits https://www.consultancy.eu/news/7350/as-a-service-business-models-what-it-is-and-its-benefits
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How to Create a Unique Value Proposition (with Examples) https://cxl.com/blog/value-proposition-examples-how-to-create
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Pivot Business After the Pandemic https://www.verizon.com/business/small-business-essentials/resources/pivot-business-after-the-pandemic/
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Six Key Value Propositions A Good Financial Planner Can Provide https://www.noblewm.co.za/6-key-value-propositions-a-good-financial-planner-can-provide-noble-wealth-management-news
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Tips for Financial Advisor Value Propositions That Stand Out https://www.constantcontact.com/blog/tips-for-financial-advisor-value-propositions-that-stand-out/
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6 Key Value Propositions A Good Financial Planner Can Provide For Clients Seeking A Better “Return On Life” https://www.kitces.com/blog/6-key-value-propositions-a-good-financial-planner-can-provide-for-clients-seeking-a-better-return-on-life/
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Six Key Value Propositions A Good Financial Planner Can Provide https://www.noblewm.co.za/6-key-value-propositions-a-good-financial-planner-can-provide-noble-wealth-management-news
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Oberlo Ten Brand Statistics You Want To Know: https://www.oberlo.co.za/blog/branding-statistics