Client service: Why variability is enemy number one

Business consultant Steve Billingham on how variability – generally a positive concept – could bring your business to its knees.

In many advice businesses the way advice is delivered and the type of service received is often likely to be highly variable, based principally around which adviser the client happens to be working with.

Such ‘variability’ results in an unpredictable and inconsistent client experience which adds little in terms of brand value and can even undermine the key marketing messages and values the business is trying to operate to.

For the typical advice business, it makes complete sense to standardise and systemise both the advice and the ongoing service processes. Any textbook on operations management will insist that variability must be eliminated as it represents enemy number one in terms of quality and profitability.

The danger is that an infinite number of customer needs and preferences can quickly turn your business into an incoherent mess that provides hundreds of sub-optimal, sub-scale offerings each with lousy economics. And all because you were simply trying to meet and serve the needs of your customer.

In today’s marketplace, however, clients are becoming more demanding.According to the recent Cap Gemini World Wealth Report, they are looking for a greater degree of personalisation with more frequent and improved reporting, greater transparency and more involvement in investment decisions. In a nutshell, they want to be treated as an individual.

So, are consistency and a highly tailored service mutually exclusive? The answer is no. The client experience can be highly personal and individual while at the same time delivered through consistent back office processes.

Ultimately, this is a strategic decision and there are three basic responses to those clients seeking something outside of your standard offerings:

● 1. Resist them: There is nothing wrong with sticking to your tried and tested proposition if it works for and provides value for enough people. Henry Ford did it. McDonald’s does it. You just have to have the confidence and the guts to say no to customers who want it their way.
● 2. Appease them: You can offer customers what they want (up to a point). Offer them your standard package of services at a standard price and then price additional services separately on top. Such a strategy will require incredible operational discipline to make sure the boundaries of your standard service do not inadvertently ‘creep’.
● 3. Indulge them: Go the full distance and make variety a virtue. Make it your key differentiator, the source of your competitive advantage, the single most important characteristic that you are recognised for. This will require you to get maximum revenue from a few clients, rather than some revenue from many and to focus on profitability over growth.

Each of these strategies can be effective but what undoubtedly is mutually exclusive is trying to combine them. Pick one, just one, and focus 100% on it.

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