Did you know that there’s an increasing number of people turning to the internet to find financial advice?

Some people prefer to use the internet to do their research, and they’re becoming more comfortable using the web to find professional advisers. Many of these people are looking for help and guidance with their financial planning and are looking for trusted advisers.

There’s Two Ways That People Get To Your Website

To keep things simple, there are two ways that people get to your website:

1. You find them and tell them to go there, or
2. They find your site themselves.

Let’s break this down a bit further.

You Find Them

When I first set up the website for my financial planning business, this was my initial strategy (until my eyes were opened to the other opportunity).

I promoted my website to my existing clients. Firstly I mentioned it in our client letters, made sure our web address was on all our stationery, and I sent out links to the website to all the clients we had email addresses for.

As a second part to this strategy, we also encouraged clients to forward our emails, articles etc to their friends, so their friends could click through and discover our website.

For a few months last year, I also used some Pay Per Click (PPC) advertising with Google. When people searched for particular terms, our ads would appear alongside the search results and they could click through. We only ever got charged for the clicks, not the number of times the ads appeared. I’ll talk more about PPC in a future article.

Helping People Find Your Site Themselves

Whilst it’s useful to be sending out email newsletters and encouraging people to click through to your site, there is another option.

Everyday there are hundreds of people in your city searching for the services that you provide.

The problem is, that they’re usually typing a range of search terms into Google. You need to know which words are the ones to target.

When you know the main keywords that potential clients are searching for, you’re able to add content to your site that is relevant to those search terms. If you do things well and provide quality content that people read, Google will make sure your site shows up well in the search results.

This is part of an internet marketing term called ‘Search Engine Optimisation’, or SEO for short.

And if you get the SEO right, you can begin ranking for a number of search terms that are relevant to your niche.

Here’s an example.

I just did some searches in the Google Keyword Tool for financial planners and financial advisors in Chicago. Here’s the results.

On average, every month, 210 people search for financial advisors in Chicago, and 140 search for financial planners in Chicago. That’s a total of 350 searches a month – over 10 per day.

Imaging if out of these 350 people you could get 10% of them to visit your website. What if one or two of them became clients? Would that help your business?

Let’s look at another search.

This search is for a couple of broader search terms – ‘Retirement planning’ and ’401k plan’.

Because the search is for a broader term, and hasn’t got a city mentioned, there are more results. Looking at the screenshot you can see that every month, there’s an average of 18,100 people world-wide searching for ‘Retirement Planning’ and 4,400 searching for ’401k plan’.

Some of these people will be in your geographic area.  Google changes the search results depending on the location of the person doing the search. I live in Australia, so if I search for ‘retirement planning’ I get a number of Australian domains in the top 10 search results. In the US, I’d expect you’ll see no Australian domains in your results, and would possibly see some local businesses.

Do the search for your local area and see what comes up. And maybe get a friend in a different state to do the same search and email you the screen shot so you can see what differences there are.

Keyword Research

Knowing which keywords to target is very important.

There are a couple of criteria that I use:

1. The keywords must be relevant to my business
2. The people using the keywords must be looking for advice, not tire-kickers, so avoid keywords with words like ‘free’ in them.
3. I must have a relatively good chance of ranking well in Google for the chosen keywords. Ranking well means in the top 10 search results with a long term goal of being in the top 1 or 2.

I use a tool called ‘Market Samurai’ which helps me determine the best keywords for my niches. It uses data from Google to help you find an initial set of keywords, but then does a lot of analysis on the top 10 search results for each keyword so you can evaluate your chances of success.

The keywords your business targets may be different from another financial planning business. We all have different value propositions, so it makes sense to target different words.

How We Can Help

We can talk with you about the SEO of your website, and give you ideas on how to improve it. As part of this consulting we’ll work with you to build a shortlist of keywords that you can target.

Use the Contact Form to send me a message. And if you haven’t done so already, subscribe to our newsletter and receive your free copy of The Financial Planner’s Website Checklist.

Leave a comment below – do you know what keywords you’re targeting? Do you have more questions about how Google works?

Image from AZRainMan

My response to that is that the conversations are already going on, whether you can see them or not.  A far better approach is to actively seek out mentions of your brand, and join in with the conversations on social media, forums etc.

You can’t stop people talking about your brand, but can you can choose to be part of the conversation.

If you’re a good financial adviser, chances are that people are talking about you. They’ll say some great things, and maybe some people will say some negative things. The key is being aware of the things people are saying about you online.

And Google makes it easy to do this.

I’ll show you in five minutes how easy it is to set up a Google alert so you can receive a notification every time your brand is mentioned online. It’s quick, easy and free to do.

Introducing Google Alerts

Google alerts allows you to track the mentions of a particular name or phrase. As you know, Google is constantly trawling the web and indexing sites. When you set up an alert, you tell Google to let you know each time it finds a new instance of your search term – i.e. your name. So if Google is indexing a forum and sees your name mentioned, it sends you an alert.

Here’s how to set it up.

Setting up a Google alert

First, head over to www.google.com and click the ‘Sign In’ section on the top right hand side.

If you already have a Google account, proceed to signing in. If you haven’t got an account, set up a new account – it’s easy to do and you’ll need it for other Google services.

Once you’re logged in, you’ll see some options across the top left hand side – these may vary from user to user. If you don’t see one called ‘Alerts’, then click on the arrow next to ‘More’. You may need to click on the ‘Even More’ section at the bottom of the drop-down box.  This brings up a page showing all the Google services – ‘Alerts’ should be around the top left.

Click on ‘Alerts’ and you’ll be taken to the Google Alerts home page.

In the ‘Search Terms’ box, you enter the word or phrase you want to monitor. When I set up an alert for my name, I entered it as “Allan Ward”. By adding the quotation marks I ensured that I’d only get results for the exact phrase. If I didn’t do this, I’d receive results for articles that mentioned the words ‘Allan’ and ‘Ward’ anywhere in the article, and usually not together.

The next options are relatively straightforward. For ‘Type’ I usually select everything. This relates to the types of sites Google is searching.

I usually set ‘How Often’ to ‘Once A Day’.  This means I will get sent a report once every day. It’s usually around the same time of day that you set the alert up.

‘Volume’ has the option of ‘Only the best results’ or ‘All results’.  I’ve always set this to ‘All results’. If your name was being mentioned hundreds of times every day you may want to reduce the length of the alert, but I don’t have that problem!

Finally, there’s a couple of ways Google can deliver the alert – by email or via an RSS feed. I used to receive it by email, now I have it delivered through the RSS feed to my Google Reader account.  I’ll explain how to do this in another post.

Once you’ve selected these options, you press the ‘Create Alert’ button and you’ll be taken to a new page. This page shows a summary of your alerts. If you ever need to edit an alert, this is the place you do it.

Find out what they’re saying about you

Once you’ve set up the alert, sit back, relax and wait. Within 24 hours you’ll receive your first alert from Google (assuming Google finds some new mentions of you on the web).

If you’re active on Twitter or Facebook you’ll probably see any activity on those sites in your Google alerts.

Now that you’ve successfully set up one Google alert, go back and set up others. I have them set up for my name, as well as the names of my financial planning business and blogs.

Also, if I’m monitoring some particular keywords that I want to rank for in Google, I’ll set up alerts for those keywords so I can see what my competitors are doing.

Do it now!

It will take you less than five minutes to set up a Google alert. Do it now! Don’t be scared of what people are saying about you.  Remember, if people want to talk about your brand online, that’s great. If they’re doing it on a forum or blog, once you know about it you’re able to join in with the conversation and possibly get some new clients as a result.

Do you have a Google alert in place?

If you do, what names or phrases are you monitoring?

photo credit: Wayne Large

What is RSS?

RSS is an acronym for Really Simple Syndication. But that probably doesn’t explain what it is or what it does.

Most blogs ( and many non-blogs) have RSS feeds set up. In fact you may actually be subscribing to some of these feeds without realising it.

An RSS feed is a way of feeding information or content to a subscriber. On this blog I have an RSS feed in place.  Every time I write a new blog article, it gets added to the RSS feed.  If you click here, you’ll view the RSS feed for this website.

Many people elect to subscribe to an RSS feed.  You can use a service like Google Reader, or even Outlook to view the feeds.

Every time I write a new blog post, it updates the feed and you’ll see it appear in your reader as a new article.  So within your reader you could subscribe to a whole range of RSS feeds and at a glance see which ones have new content. So instead of having to visit each website to see if there’s anything new on it to read, you can save yourself time by using an RSS reader.

Uses for RSS feeds

The problem is that currently, not many people know what RSS feeds are, or know how to subscribe to them. Unless you’re a computer geek, it may seem a bit hard.

So that’s why there are easier ways to package up the RSS feed to make it more user friendly.

On this site, I offer the chance to subscribe by email. I use an online service called Aweber to manage the email newsletter. Aweber links to my blog’s RSS feed and downloads any new articles into an automated email. I can then login to Aweber, review the email and send it to my subscribers.

So every time I write a new article, I can easily email it to my subscribers. And the RSS feed makes this process much easier.

Another use for RSS feeds is via social media like Twitter or Facebook. Every time I publish a new post, an automated tweet is posted to Twitter with a link to the new post. How does this happen? Via the RSS feed.  I’ll write an article explaining how I do this later this month.

Another great use for RSS feeds that I hinted at earlier in this article is to aggregate your reading. I use Google Reader to bring together all the feeds I subscribe to. I have my feeds categorised – Financial Planning in one section, Blogging feeds in another etc. So I don’t have to visit multiple websites – all the new articles are there in front of me.  Think of the time you’ll save if all this new content was streamed directly to one place instead of you having to search for it.

It’s also possible to set up RSS feeds based on certain keywords. Say you want to know every time your business is mentioned on the internet.  You can set up an RSS feed to facilitate this.

Wrap Up

So an RSS feed is a great way to get information delivered to your computer. Think of it like an email, but from a blog or a website.

Whilst a lot of your clients may not be confident in subscribing to an RSS feed, the feed itself can be used to deliver content to an email list – most people are happy to subscribe to something like this.

So RSS feeds can greatly simplify your online life – both for your personal reading and research and also to help your business deliver great content to your clients.

Are there things you’d like me to explain further? Something not clear? Leave a comment below.

And don’t forget to subscribe to my email list to see my RSS feed in action!

photo credit: dullhunk

And you launch it.

And for a few days, it gets a bit of traffic – mainly because you’ve sent out an email to existing clients, (and friends and family).

But after a while, you notice there’s not much traffic at all coming to it.

Welcome to reality! You can have the best website in the world, but without traffic, it means nothing.

Over the next few months we’ll post some articles on how you can get more traffic to your site. For now, here’s a summary.

Two ways to get traffic

There’s two ways to get traffic to your site:

1. You tell people about your site.
2. They find your site themselves.

Let’s look at these in more detail.

You tell people about your site

This is the traditional way financial planners have promoted their websites. This strategy involves you telling others about your site and getting them motivated to go to your site.

Ways to do this include:

• Placing your web address on business cards, letterhead etc.
• Using an email signature that promotes your site.
• Advertising – either online or offline.
• Emailing your existing clients and either they visit your site or they forward the email to their friends who click on the link to your site.
• Using social media like Facebook or Twitter to promote your site.

There’s other ways to do this – I’ve only listed a few above. The main point is that you’re the one doing the promoting.

They find your site themselves

Consider this – every day there are people who are searching for your services but they don’t know you exist.

How do people find a financial planner? Word of mouth is still a popular method, but even with a referral, potential prospects are likely to visit your website before they call you to get a better idea of who you are.

These days, more and more people are turning to the internet to get financial planning advice.

And they’re looking for businesses like yours.

Ways people can find you include:

• Doing a Google search for financial advisers in your local area.
• Searching Google using other keywords, such as retirement planning’.
• Seeing your business listed in the Google local search listing (contact me to find out more about how to get your business featured here).
• Seeing your advertisement alongside the search results when they use a search engine.
• They see your business mentioned on Facebook or Twitter.

There’s a lot of ways people can hear about you.

Imagine if every month in your local area 500 people searched Google for a financial adviser.  What if you could reach just 1% of that number – 5 people. If two of them became new clients, would that be helpful for your business growth?

But you need to do some work with your website to get it in the right positions on the search engines.

Do something different today!

Very few financial planners understand about how they can set up their sites to obtain a better listing in the search engines.

It is possible to get your site to the number one position for certain keywords. And this opens the door to more new clients because now they can find you.

We help financial planners who are interested in learning about how search engine optimization of their website can help them find new clients.

Contact us today to find out more about how we can help.

Do you have questions about this article? Please leave a comment below.

photo credit: jurvetson

What does your website say about your business?

Does it show your visitors that you’re up to date with the latest trends? Or does it show them that your website is not a big priority for your business?

There’s a myth when it comes to websites that says that you must have a fancy looking site. This is wrong. I’ve seen plenty of good looking sites that have very little content. Whilst they look great, there’s no reason to return. On the other hand, I see lots of average looking sites that contain great information. In my opinion, these will always triumph over a fancy design.

So, what are some essentials for your financial planning website?

Make it easy to navigate.

I was looking at a site today, that was very hard to navigate. It was difficult to work out where to go to on the site, and it was hard to get back to the homepage.

On your financial planning website, make sure you have a range of navigation options across either the top of the page or the left hand side of your page. Make these titles large so you can read them and make sure they are descriptive enough so that the visitor knows whether they are relevant to them.

At the end of every article, why not place links to other similar articles? This gives the reader a logical place to go to next. If you use WordPress, there are plugins that will automatically do this for you.

And always make it easy for the visitor to get back to your home page.

Is it easy to read?

Who will be reading your website? Are they old, or young?

Make sure that the important text on your website is easy to read. We suggest dark text over a light coloured background, and a text size of around 12-14 points.

And make sure the words display well on the page. You don’t want people to have to scroll  across the page to read your full text.  And ensure the important words are above the fold i.e easy to read without having to scroll down the page.

And try and avoid text that sits over pictures – it can be hard to read.

Does it speak my language?

Too many financial planning websites use jargon that may make sense to the person who wrote it, but mean nothing to the average reader.

A website may be the first point of contact a potential client has with your business. Can you show them that you speak their language?

No focus, no message

I’ve seen websites that started off well (and look great), but don’t seem focused. They talk about a lot of things, without actually providing any information. Make sure you have pages that explain how you help clients, and think about providing client testimonials that prove you can do what you say you will.

Keep it current

This is my last point, but perhaps the most important one.

Keep your website current.

There’s nothing worse than looking at someone’s site and the most recent newsletter they have is from 2008!

Show your clients that you’re up to date.

With the web solutions that we recommend to advisors, you’re able to update your content quickly and efficiently from your computer, making it a simple thing to keep your site looking fresh.

Content beats pretty designs

People are less fussed about the design of your site as they are with the content. What is your website like? What could you improve?

Leave a comment below and let me know what you think.
photo credit: Mamonello

I’ve been a fan of Don Connelly for a while.  I’ve read a lot of his articles and he’s always got some great ideas about how to communicate with clients.  He’s not into pushy sales tactics (neither am I) – he’s very good at using analogies and stories to help clients understand what they’re doing.

I’ve just had a look at his You Tube channel and I found this video which is ideal for financial planners who have clients who still want to deal with a couple of planners rather than just one.

If you’re receiving this by email, you can view this blog article online here.

What do you think?  Leave your comments below.

I’ve been working through Middleton’s InfoGuru Manual this past week and he’s got one section about creating your core marketing message.  This article gives some great examples.  You can find out more about Robert Middleton and Action Plan Marketing on this page.

So, from February 2007, here’s Robert Middleton with Marketing Messages That Work.

In my current Fast Track To More Clients Program, this week’s assignment was to create an effective marketing message based on the following four steps:

1. Your target market or ideal client.
You need to identify who you work with so that your prospect will know immediately if your message is for them or not.

2. The problem this client is dealing with.
This gets the prospect’s attention by hitting a nerve and letting them know you understand their situation.

3. The outcome that resolves this problem.
Declaring the kind of outcome they can expect makes them want to know more about your services.

4. Story or example that proves you can do it.
Telling a story makes your services real to the prospect. If you helped someone else, you can help them as well.

I’d like to share some of the better messages with you. Use them as a template to help you create your own messages. Stick to the four steps and you’ll have a much more powerful and attention-getting message.

Example #1 – Healthcare Consultant

We work with healthcare organizations, who struggle with hiring and keeping really good people.We help them reduce turnover by up to 70% and hire employees that are more productive.

A good example is one client that was really disappointed by the work ethic of new employees and struggled with 65% turnover. We were able to significantly raise the bar on employee work ethic and reduce turnover by 70%.

Example #2 – Financial Planner

I help people with a six figure incomes who are getting clobbered by taxes, staring at college and retirement and wondering how in the world they’re going to pay for it all.I show them how to send their kids to private college for about the same cost as public colleges, maintain their lifestyles at the same time and fund retirement.

A typical example is a couple that came to me who have two children that will attend college. They didn’t know how much college would cost, how much they should save and how much they were going to need to retire. I showed them how to save over $18,000 in taxes oriented around college funding by finding new ways to save on income taxes. I call these savings a “Tax Scholarship.” That might mean an additional $200,000 for retirement or a more expensive college for their kids.

Example #3 – Management Consultant

I work with CEOS of small to medium sized businesses who are experiencing a steady decline in productivity with their management teams and employees and are finding training programs ineffective. Lack of personal accountability and self-management skills has led to something that looks like procrastination and productivity loss.We increase self-management and personal accountability through practical, easy-to-administer tools that develop leadership growth not only in a local setting, but with remote team members.

One of my clients was a commercial construction firm that had tried several times (and several years) to implement a strategic planning process. However, the CEO had difficulty following up with the many goals that were set and holding the executive team accountable for all the steps and due dates. We implemented an online solution that gave the CEO a bigger picture of what was happening with the strategic plan and gave him the means to follow up quickly with team players that were falling behind. I advised him to move more into a coaching role with the team through this process. It resulted in the company implementing for the first time in 10 years all the goals they had set in their strategic plan. This had a very important impact on the bottom line in a depressed commercial construction market. While their competitors were struggling, they were doing well and did not have to lay off any employees.

Example #4 – Life and Relationship Coach

I work with individuals who have been unsuccessful in finding their ideal partner and with couples who struggle to keep their marriage intact.I help them to understand themselves more fully as individuals and I introduce them to concepts, exercises and skills that will increase their chances for a meaningful and lasting partnership.

I worked with a couple who was planning to get married but they argued incessantly. One of the partners had serious doubts about moving forward. I helped them identify the real underlying problems and taught them to see “the relationship” as a priority. They learned many things such as how to create a mutually satisfying partnership through respect, responsibility, and good communication. Their fighting stopped and they were able to resolve their stuck areas. They ended up getting married and three years later they are happy and expecting their first child.

Example #5 – Retail Consultant

I work with independent retailers who are frustrated with trying to get shoppers to buy.I help them create the kind of shopping experience that gets people to come inside AND buy.

A used music store that I worked with that was struggling to get people to stop and come in the store instead of just walking by. I helped them transform their dark, unappealing window, into a dynamic storefront that would get their customers’ attention.

Example #6 – Management Consultant

We work with busy entrepreneurs and business owners of successful small and medium companies who are frustrated because they are leaving money on the table because they are not getting important back-burner projects completed.We help them get a laser beam focus on what will move their business off the plateau and get those key projects completed and producing results for them, not gathering dust on the shelf.

We recently worked with a 150 year old manufacturing company. In order to bid bigger projects, they needed a higher level of certification in their industry. They had a history of knowing what they needed to do but failing to execute it because they were so busy manufacturing their product. We helped them develop an easy, step-by-step plan so they could see how it was possible. Now they are certified and able to track their inventory, bid more profitable projects and keep their customers happy. Just as important for them was the pride and accomplishment of working together as a team as achieving the goal.

 You’ll note that all of these marketing messages have adhered to the four steps. It’s clear who the service is for, why the service is needed in the first place, what the service actually delivers and proof that they have achieved tangible results with clients.

It doesn’t get much more complicated than that. If your marketing message is not getting results for you, use this formula to increase its impact.

The More Clients Bottom Line: Your marketing message is the foundation of your business. Create a good one and reap the rewards for years to come!

I’ve been working through a couple of the books that form part of the toolkit, and I haven’t been dissappointed.  There’s some great material in the Toolkit, and it was well worth the price.

The good news is, they’re re-opening the offer for a limited time only later this week, on the 8th and 9th of July.  All the information is below – this is a great offer and I encourage you to have a look at the web site and buy it.  Even if only a couple of the products are useful, you’ve save a lot of money.

If you could get your hands on 20 business-building products for a fraction of the cost, would you leap at the opportunity?

Later this week, 20 business-building experts are coming together in a “radical experiment.” They’re practically giving away their premium products and programs to help you grow your business and increase your personal mastery.

It’s called the Ultimate Entrepreneur Toolkit, and you can find out more here:

Take a look at what’s included:

- Andrea Lee’s Pink Spoon Marketing gives you a detailed step-by-step roadmap for creating multiple revenue streams and marketing funnels that attract paying customers to your business
- Nancy Marmolejo’s Quick and Easy Social Networking is a proven 3-Part System to boost your visibility and expand your network using Facebook and Twitter
- David Wood’s Explode Your Practice (6 CDs of material) is chock full of essential strategies and practical how-to information for building a 6-figure coaching practice
- Brad Fallon’s “Stomping the Search Engines 2″ is a cutting-edge video training program that will teach you how to use Search Engine Optimization to bring free traffic to your web site
- Patricia Fripp’s “Become a Masterful Speaker” includes 4 audio training products that will teach you how to become a masterful speaker with superior sales and presentation skills
- Brad Smart’s “World-Class Interviewing and Hiring” video training course will show you how you can identify hire superstar talent for your business
- Ken McArthur’s “Information Product Blueprint Workbook and Action Plan” (an incredibly comprehensive, 674-page manual) will show you the step-by-step process for creating your own information product

… and that’s just a sampler of what you’ll get!

The Ultimate Entrepreneur Toolkit is only available on July 8th and 9th, because of the massive discount involved. Don’t miss this amazing opportunity to get some of the best courses, programs, and tools for business building available anywhere – and save 95%.

I was impressed by the value offered in this unique product, and I’m confident that it’ll be worth it to you and your business.

To get all the details, go to the website

What we learn from Apple

I have a Creative MP3 player, and I recently bought a Samsung player for my son.  I bought my Creative a few years ago.  It was priced at a similar price point to the comparable iPod, but had a couple of extra features the iPod didn’t – FM radio and a voice recorder.  It had the same memory capacity, better video display and these two extra features.  Yet the iPod outsold it.

You see, when you buy an iPod, you’re not just committing to the player.  You also commit to the iTunes store.  And once you commit to the iTunes store, you’re locked in.  Because up until this year, the songs sold through iTunes had digital rights management (DRM) restrictions which were designed to stop these songs being shared.  But because the songs were encoded in a format unique to Apple, it made it difficult for an iPod user to replace their iPod with anything but an iPod.  Why?  Because the songs won’t play on the new player unless it’s an iPod.

When I buy songs through iTunes, I have to burn them to disc and then rip them to the MP3 format before I can add them to my MP3 player.  But if I had an iPod, they’d be ready to play immediately.

The restrictions have been relaxed now, but if I have a library of DRM music, I need to pay extra to upgrade each track if I want to remove the DRM restrictions.

By creating a complete system of buying and then playing music, Apple has created some barriers around its customers that make it difficult for them to move elsewhere.  The simple fact is this…if I have an iPod and it needs to be replaced, it’s too hard to look to any other players, even if they have better features.

This is an example of switching costs.  It costs me too much in time, money or some other commodity to change.  Because of this, I stay.

Creating Switching Costs

When I did my MBA I was introduce to Porter’s Five Forces analysis.  Within this framework was this concept of switching costs. 

Where there is little diversification, and a product is seen as a commodity, then the buying decision is primarily based on price and service.  The sellers embark on price cutting strategies, or offer higher levels of service to win the sale.  Both these strategies could end up costing more over the long term.

Where a product is differentiated and there is little perceived competition, it can command a higher price.  Because it appears different to its competition, consumers are less likely to move elsewhere because they’re not convinced they’re going to receive the same value somewhere else.

Porter, in his book Competitive Strategy outlines some major sources of switching costs:

• Costs of modifying products to match a new supplier’s product;
• Costs of testing or certifying a new supplier’s product to ensure substituability;
• Investments in retraining employees;
• Investments required in new ancillary equipment that is necessary to use a new supplier’s products (tools, test equipment, etc);
• Cost of establishing new logistical arrangements;
• Psychic costs of severing a relationship.

                                           Porter, Competitive Strategy pg 114

This blog is aimed at people who sell services.  If you’re good at selling your product, you should be aware of the relevant switching costs for your product.  This can be helpful if you’re trying to win a new client (so you can understand possible impediments to the sale proceeding) and it can also help you keep clients.

For many clients, the depth of the relationship is a huge switching cost.  Consider the client of an accountant.  They’ve probably spent years with the one accountant, and that accountant probably knows a lot about their personal and financial affairs.  If they switched to a cheaper accountant, whilst they may save some money, they’d see a massive cost in having to build a relationship with someone new.  There’s also the fear of making a mistake – ‘what if we move to this new accountant and we don’t like them?’.

In the above example we can see that in a service environment, cost may not be the deciding factor.  The important thing is to understand what is.

What Are Your Switching Costs?

Have a think about your product or service.  What are some of the switching costs that may inhibit a client moving to you from somewhere else.  How can you reduce the perceived level of pain of those costs?

What about your existing clients?  What are some things you can do to make yourself invaluable to them so they won’t leave you and go elsewhere?

In many cases, switching costs are not financial in nature.  They may be intangible, they may be time-based and they may be relational-based.

I’m not advocating being dishonest and locking clients in to service agreements that stop them from going elsewhere.  This is about respecting your clients, but also respecting yourself and having enough faith in your services that you’re confident in differentiating yourself from the crowd.

What do you think about switching costs?  Do you have any examples to share?  Leave a comment below.

Tonight I downloaded an EP called You, the Night and Candlelight from a guy called Dave Barnes.

I’ve heard a couple of his songs before, been following him on Twitter for a while (hey, he’s also very funny) and tonight I jumped onto iTunes and bought his EP.  I was listening to my two favourite tracks, Until You and Home and I did something I haven’t done for a while – I stopped what I was doing, turned the volume up and just listened.

You see, music has become a good thing to listen to while I’m doing something else, but tonight I stopped the ‘something else’ to listen.

I reminded me of when I was a kid and I’d save up for weeks to buy a new album (on vinyl) and I’d play it repeatedly in my room.  I’d devote my whole attention to it, reading every word on the cover and memorising all the lyrics.

Tonight, Dave Barnes got my attention.  My full attention.  How did he do it?  He produced something worth listening to. 

When I listen to his songs, I hear his passion.  He doesn’t just sing words, he lives the song.  I’m sure when he recorded this record he was determined to do the best he could.

I got so excited about this music, I had to share it with the world.  I jumped on Twitter and wrote about what I was listening to.  This is what fans do these days – they use Twitter, My Space, Facebook, whatever to get the message out.  The smart musos are leveraging this and becoming more accessible through social media.

So how does this relate to business?

I’m challenged about the power of positive word of mouth.  How can I get my clients so excited about what I do for them that they can’t contain themselves and have to tell their friends?

What I’ve learned from Dave Barnes is that spending time (years) refining my message is a good place to start.  Gladwell would suggest 10,000 hours is required.  The other thing I’ve learnt is to become passionate about what I do.  I need to be so excited about my message that people are drawn to the message.

What can you learn from this?