Distraction-Proof® Advisor Ideas

When it comes to growing your business profitability, having only a fair idea of client profitability will often prove very expensive.
…
When I was managing Speedo New Zealand, each year we would have a new range of swimwear to take out. We might have had 24 styles of women’s swimwear to show the retailers, but we knew those top eight styles that were most profitable for us. And we knew within those eight styles, that sizes 10 and 12 would be our most profitable sizes. With sizes 14, 16 and 18, the margins would thin out somewhat. With sizes eight and six, retailers would order very few. So we knew that for those eight styles—our key styles to focus on—sizes 10 and 12 were where we were going to make the most money. We were aware of what we wanted to push most.

As an advisor, you have to do the same. You need to know the approximate profitability of each of your clients or each of your households. Yes, these numbers, these totals, will go up and down literally by the day. I get it. But overall they will usually stay relatively close, relatively similar, year in and year out. You need to know where the majority of your revenue is coming from. All your other costs are fixed—things like rent and staff. These are fixed costs that you need to know you’re tracking towards paying more easily each time, by adding more profit to your business. But you can’t do it unless you know how profitable each family is for you.

This can be a bit of a bear to undertake, to get going. But if you’re serious about doing it,

1. Commit to it. Commit to it and set aside a time block each week to spend time figuring out where your most profitable clients are.


2. Use resources. Get help to do this. There are many ways of doing it, but there is a process that will get you to the endpoint sooner rather than later. Connect with us at Ash Brokerage. Connect with me personally: Paul.Kingsman@AshBrokerage.com. I’ve worked through this with an RIA. I know what’s involved. So connect with me, and I’ll help you through it.


3. Refer back to the results. When you see who your most profitable clients are—your top 10 or top 12 most profitable families—you will immediately be more attuned to finding people just like them.

You’ll struggle to do this if you just keep a general idea of this in your head, just having some basic, broad head knowledge of who your most profitable clients might be. Get these names written down, and, by default, you’re going to focus far more effectively on finding even more of these high-paying, high-profitable clients.

I look forward to bringing you another Distraction-Proof Advisor Idea next week.