You’re probably aware that people communicate in different ways – some prefer visual images, others react to words, and some to feelings. Finding the right way to communicate with a client, so that we understand each other well, is one of the challenges of what I do – and one of the joys when it goes right.
This is a story about how I found the right way to bring a business idea to life for Howard Scott, of H.J.Scott & Co., an Independent Financial Advisor in Bolton. And in so doing, enabled significant improvement in a business.
Change in Regulation Provides Business Opportunity
In mid 2005, the legislation controlling the activities of Independent Financial Advisors changed substantially, and tighter controls forced advisors to be clearer about how they provided their service.
Howard, the lead Partner with the firm, recognised that this change created an opportunity for H.J.Scott & Co., since the IFAs that successfully made the transition to the new regime would be at an advantage over those that did not do so as quickly and thoroughly.
‘Before we were introduced to Matthew,’ said Howard, ‘all the necessary ingredients for business growth lay on the table. An existing mature business was running profitably, partners in the business had an appetite for change, and there were legislative changes which could bring opportunity.’
Howard asked me to provide personal coaching and marketing advice. ‘As with some chemical reactions, nothing happens in a business until a catalyst is added‘, said Howard, ‘Then the results can become explosive. I wanted Matthew to act as the catalyst of change for our business.’
I scoped the project with Howard like this:
- Define the company’s mission and targets.
- Create a differentiated market position for the business that would enable it to be competitive in a changing market.
- Define the product and services offering, including pricing and other terms.
- Outline the marketing strategy that would capture and retain appropriate clients.
- Coach Howard and the rest of the team through a transitional phase in the business.
In occasional meetings over the next year, I worked closely with Howard to decide the right goals for the business. Howard found it challenging, ‘Matthew helped us to devise a strategy and monitored our progress through a period of rapid change. He showed us that 20 years of business growth had been driven by nothing more than comfort and convenience.’
‘He challenged us to step outside of our comfort zone’, continued Howard, ‘and demonstrated that if we were to try to grow the business, the results would be exponential. Matthew always asked the questions we didn’t want him to ask – the questions for which we had no answers. He made us challenge ourselves and helped us to answer the very questions we had been afraid to ask.’
Still Needed Convincing
But I still hadn’t convinced Howard of one thing.
I wanted him to change his business model so that he would actively seek appropriate customers, rather than just accept those that came to him. I knew that would make his firm more profitable, but I struggled to find a way of showing him how beneficial I thought it would be. Then I had an idea.
I asked him to imagine going to a dance, and not having the courage to ask the prettier girls for a dance. I said that he was likely to ‘go home on the bus alone’.
Howard’s expression changed: he’d clicked with what I was saying.
Restructured Business Model
By defining what customers of the business needed, Howard was able to restructure how services were delivered, and seek the clients he really needed to deal with.
A fee-based service was defined which would enable better quality time to be spent with fee-paying clients, and enable those clients to have a clearer expectation of what H.J.Scott & Co. would provide in managing their wealth.
The fee-based model was a complete changeover from a commission-based business model, and necessitated fundamental, far-reaching changes in systems and processes.
Concrete results soon started to happen. Within a year, income had increased significantly, and profit had risen by almost 50%, on an already successful base.
‘Matthew’s advice has had a significant effect on the profitability of the business, and he has communicated difficult concepts with stunning simplicity’, said Howard.
Several years on, Howard still tells people about ‘Matthew’s story of going to a dance’. Which just shows you the power of finding the right way to connect with someone.