It is said that client retention is five times more profitable than acquiring a new client. Also, with the upfront commissions ban and the Supreme Court prohibiting Aadhaar based eKYC, the cost of acquiring a new client and completion of his KYC formalities is higher.
Since most of you have a healthy client base, the logical way to grow business is to focus on increasing wallet share from existing clients.
Here are seven tips that can help you get a bigger wallet share from your existing clients.
Proactively engage with your clients
Prem Khatri, Founder & CEO Cafemutual talking at an event mentioned that many advisors engage with clients on ‘need to’ basis i.e. many advisors only meet their clients if they call with a query. This is a passive approach to client management. Instead, stay in regular touch with your clients to keep track on key life events of your clients such as a promotion, job change, marriage and so on. You can use this information to offer customized solutions that suit their dynamic needs.
Remember bonus happens once a year and so do appraisals
Majority of your salaried clients may receive a bonus at the start of the financial year or during Diwali. However, as this amount varies every year, you may not have included it in the financial plan. Encourage your clients to invest their bonus. You can also advise your clients to top up their investments in line with the salary hike. Explain to them how annually investing their bonus and regularly increasing their investments can help them reach their financial goals sooner.
Congratulate them on reaching investment milestones
Assume your client wants to accumulate a corpus of Rs. 1 crore. Congratulate him on accumulating Rs. 10 lakh that is 10% of his target amount. Continue updating him every time his portfolio grows by Rs. 10 lakh. Knowing their investments are performing well will build their trust in your advice and motivate them to invest more money with you.
In addition, if your client fulfils a financial goal before time, congratulate him and advise him to move the amount into safer investment option.
Increase your product bouquet
While your core business may be mutual funds, it will not be able to fulfil all needs of your clients. A client will have allocation to bank FDs, gold, insurance and may need loans. By offering different services like broking, insurance products, corporate FDs and loans, you can grab a bigger wallet share from your client.
Understand you client’s cash flow
Offer budgeting services to your clients. Analyse their income and expenses to identify if there is any possibility of reducing expenditure. Encourage clients to trim their discretionary expenses and invest that amount to achieve financial goals.
Activate inactive clients
Make a list of clients who have not invested with you for the last one year. Share with them data on their portfolio growth to motivate them to invest more. You can also share client success stories demonstrating how clients who have invested regularly with you have accumulated a fortune.
Conduct yearly client event
Organise an annual event, where equity, debt and gold fund managers share their outlook for the asset class and answer client queries. Encourage your top clients to share their wealth creation stories. This may motivate your clients to increase their investments.
In a nutshell
- Keep a track on the important life events of your clients
- Encourage your clients to invest a portion of bonus or increment in mutual funds
- Regularly update your clients on the progress of their investments
- Increase your product offerings
- Analyse cash flow of your clients to see if there is a possibility to reduce expenses and increase investments
- Encourage inactive clients to start investing
- Conduct an annual client event
This article was first published in Tata Mutual Fund's monthly newsletter
