Executive Summary
While financial advisors offer valuable services for their clients, it can sometimes be challenging to gauge how much clients actually value those services. On one hand, a client's willingness to pay an ongoing fee for financial advice suggests that they find the advisor's services worthwhile. On the other hand, the term "financial advice" often refers to much more than asset allocation and wealth management. Many firms also offer regular meetings, webinars, client portals, and other services to enhance the client experience. Yet, with so many services available, it isn't always clear which ones truly make a meaningful difference.
In the 155th episode of Kitces & Carl, Michael Kitces and client communication expert Carl Richards discuss how advisors can look beyond engagement metrics to understand which services have the greatest impact on their clients' experience.
Engagement metrics are often used to gauge how much value a client derives from their financial advisory firm's services. For many advisors, a shift in engagement – such as a long-term client requesting fewer meetings – can be a cause for concern, as it might raise red flags signaling disengagement or even a potential move to another advisory firm. However, changes in behavior like this don't always indicate a problem. For instance, the same client wanting to reduce their meeting frequency from three times a year to just once might reflect not a loss of interest, but instead increased peace of mind, trust in the advisor, or confidence that if anything urgent comes up, they will connect with each other anyway.
This principle extends across many aspects of a firm's value proposition, from client newsletters to account log-in frequency to other common metrics of interest. While offering valuable resources to clients can make a difference, providing too many options risks overwhelming the client. Rather than reinforce the advisor's value, excessive offerings might even be a turn-off for the client, detracting from their overall experience.
This tendency to 'over-service' often comes from good intentions of providing great service and justifying the fee for financial advice, and advisors may hesitate to scale back out of concern for removing something clients value (e.g., a monthly newsletter they enjoy reading even if they never reply). To better understand what truly resonates with clients, advisors may find it worthwhile simply to start by asking. For example, sending a client engagement survey or talking with clients can provide meaningful insights. Similarly, investigating offerings that clients don't engage with – such as document vaults that they rarely use – can reveal where advisors can focus less effort, giving them more time to focus on what really does make a difference.
Ultimately, the key point is that traditional engagement metrics may fall short in capturing the true value clients place on financial advisory services. And, in a world where clients are increasingly busy and advisors face competing demands, the real opportunity lies in figuring out what truly matters to clients. By identifying the services that create the most meaningful connections and deliver the greatest impact, advisors can allocate their time and energy where it matters most – deepening trust, enhancing the client experience, and strengthening long-term relationships!
Authors:
***Editor's Note: Can't get enough of Kitces & Carl? Neither can we, which is why we've released it as a podcast as well! Check it out on all the usual podcast platforms, including Apple Podcasts (iTunes), Spotify, and Stitcher.
Kitces & Carl Transcript
Michael: Well, greetings, Carl.
Carl: Hello, Michael Kitces. How are you?
Michael: I'm doing well. I'm doing well. We're getting into a holiday season, although probably will be just after holiday season by the time that this finishes. So, I'm presuming that means snow is falling in Utah, and you are outdoors on the slopes once again?
Carl: Yeah, yeah, it's been good so far. But for me, it's just fun to be... I do my best work in the mountains, for sure, in terms of thinking and conversations, etc. So, it's been really fun.
Michael: Very cool. Very cool. I've been crunching on some of the research work we've been doing about advisor productivity because, again, you have fun in the mountains on the ski slope and I have fun with the spreadsheet.
Carl: That's right. That's right.
When "A-Level" Service Can Actually Detract From High-Value Clients [1:05]
Michael: And I have been digging into some really interesting results and data and trends we're seeing around...these counterbalancing factors. I'm trying to figure out how to frame this well. So, the more that a lot of the core investment stuff gets commoditized or at least asset-allocated diversified portfolio becomes increasingly commoditized, we're doing more and more in financial planning wealth management, which is just a meta trend writ large across the industry. We're going deeper. We're doing more... I've got to add more value to my clients to be competitive in the current marketplace. And I find it shows up from 2 veins. There is the like, "Okay, what else can we do to add value because that thing just isn't quite as valued as it was in the past because there's so much technology to do it easily?" And then there's a, "I charge my either proverbial or actual 1% fee. I feel like we got to do more to justify our fee, to validate our fees, and what we're doing, and why we're so valuable for clients."
And so, I think of these as the opposite sides of the same coin. Sometimes it's I'm trying to come up with new things to add value, and sometimes it's really just kind of trying to justify my fees and what I do. That sounds worse than I mean it. It's a fair thing to say, "Hey, I really want to make sure my clients are getting full and fair value for the fees that I charge." So, I'm not trying to be negative about that. But there's a version that I see that is, "What else can we do to add value?" And there's a version I see that's cropping up that's, "I feel like we have to do more things for our clients to justify our fees because we want them to stick around and not go away."
And what we're seeing starting to show up in our research is that there really is a difference between those 2. In the purest sense, we see some firms adding stuff, adding services, doing more, but they're not charging more. And so, in the simplest sense like, "I do more, but I don't charge more, and I've got it." Steph Bogan likes to call it service inflation. I used to call it value compression or margin compression. "I'm doing more to get the same fees I always got, which means I'm actually profiting less. This is squeezing me as a business." And then other firms that are going in and trying to do more and be more systematized and their revenues going up and their productivity is going up. And so, it's crystallizing for me down to this dynamic of we're talking about all these different things that we can do to add value to clients. I feel like not enough firms are bringing the lens of, "But is that really a thing that clients want to pay for?"
Carl: Yeah. Or, "Is it really a thing they want at all, whether they're paying for it or not?"
Michael: Yeah, yeah. Or sometimes it's a thing of, "Do they even want it at all?" It reminds me of a version of the dialogue we've had in the profession for years and years around meetings, around in-person meetings. I used to joke, particularly being here in the D.C. area, "The difference between an A client and a C client is that a C client only has to sit in crappy D.C. traffic once a year to come into our office. But an A client has the privilege of sitting in horrifically bad D.C. traffic three times a year..."
Carl: Right. What a blessing.
Michael: "... to come into our office." And I still remember, this probably would have been 10 years ago now, a client who was very deep in the tech world, and we're trying to schedule the meeting for him to come in, and he's very active and busy in the tech world. So, scheduling for him was always difficult to get him to come to the office because he just worked a lot of hours. And he basically said to us at one point, he's like, "You realize I manage a team on 3 continents, and you make me drive to your office." And it was not said in a particularly positive way. And he was happy to meet, but this whole idea of it's a value to allow clients the privilege to meet with you more often in person was literally not of value to him. He was an A client for us, and we were basically pissing him off by giving our version of A-level value, which was not actually a value for him. And so, I remember that from many years ago, but to me, it still comes full circle for what we're seeing today, which is a lot of firms just trying to do more things, do more to show more value, and sometimes clients don't even actually want the more.
Carl: Yeah, it's so fascinating. So, I could tell you a funny story. But first, I think there's a fallacy. I think we could even maybe name it because that's what I like to do, the engagement fallacy. I think it's interesting. I've had lots of conversations with the advisors like, "Well, I want increasing engagement. I want the client to log in more. I want more response to emails." And one day, I was thinking through like, "Well, maybe the goal is knowing it. Maybe they've hired you because they don't want to worry about this anymore. Maybe we got this backwards." And that reminded me of this client I had. His name was...I'll just call him Dr. Terry. And Dr. Terry loved to ride his mountain bike. And he was a radiologist. He worked hard. And I remember asking him at the end of the meeting, it was a question I always asked, which was, "In an ideal world, how often would you and I communicate?" And I would follow up with saying, "And how would you like that communication? Email, in person?" And Dr. Terry leaned back, and he was like, "In an ideal world," he's like, "Never." He's like, "In an ideal world, never. You would just take care of this."
Now, he said like, "I realize we're never going to be at an ideal," but he's like, "As little as possible. That's the goal, as little as possible." And it also reminds me a bit of...we've talked about our...it's actually not a metaphor, but Kevin, our advisor, Kevin, who has built one of the most successful businesses I know of. And if you ask him again today – we should have Kevin on, that would be hilarious – he would tell you, "I rapidly respond to client questions. We answer the phone, we reply to emails, and we give him a consistent experience on the investment side," because he's a heavily investment-focused advisor. "The experience is consistent, and we rapidly respond to client inquiries. That's all we do. We don't send out anniversary cards. We don't have 17 meetings. We don't have like over and over and over is like..." So, I don't know. Now, there may be client demographics or niches, as we like to say, that want... In fact, Dr. Terry said the same thing. He's like, "Carl, you're not my social coordinator. I don't need a client appreciation event."
Michael: Now, that reminds me of a client we had where we basically were their social coordinator. We were their social activity. So, lovely retired couple. And if we called Harold, like if we called Harold, "Hey, we were sending you a form that we need to get wrapped up," Harold will be like, "Oh, I can bring it by the office. I'll sign." We'll be like, "Harold, we can send it to you as e-signature." He's like, "No, no, I can print it out. I'll bring it to the office." I'm like, "Harold, we don't need a wedding signature anymore. The world has moved on with that." He's like, "I can bring it by an hour." I'm like, "Oh, okay, I see. You're bored out of your mind because you retire too early, and you need something to do. Come on by, Harold. Drop the form off because, apparently, I'm the only thing you've got to look forward to today, and you just want someone to talk to for a while." And then Harold would come by, and he would chat with the team for 45 minutes because he was bored. And so, yeah, like in his case, that was a thing to do, something to get out for.
Carl: That was valuable.
Michael: He was a little bored in his retirement life. That was valuable. The privilege of having a form to drop off at our office was valuable for them because that happened to be what he needed. Whereas Andrew, which was our tech client, Andrew had a lot of things to do and hated coming to our office. The fact that you got to drive more often in D.C. Beltway traffic to come see us was killing the relationship because we were treating them like an A client, our version of an A client and the way that we express what we thought was value that he did not.
How Over-Servicing Clients Can Detract From An Advisor's Value [11:07]
Carl: Yeah, I think that's an interesting way to frame it is like, "Okay, are we really adding value that clients want, or are we just running around trying to justify our fees to ourselves even?" And let's let them determine that. And you could, you could build your niche around that. We have a lot of Harolds, and we don't have any of the other ones. And that allows your service model to be more consistent. But the point is the question I love to ask recently is...because I'll come up with an idea. We need to add this to the Society of Advice or something. And the team will often say, "Is anyone asking for that? Did anyone ask for that?" And then we're often like, "Well, no, I just heard it on a podcast somewhere that it's something we should do." And the same with advisors like, "We should add this. Does anybody care? Does anybody want it?" And maybe you like working with people who love to come to the office. Great. That's awesome. Then get a bunch of people that value coming. And don't get hung up on coming to the office versus Zoom. Are we saying it should be remote? That's not the point here. The point is just pick anything and decide like, "Is this valuable to the client, or is it just...?" I think when we're referencing justifying your fees, I don't think we're justifying fees to the client. I think it's justifying fees to ourselves. We sometimes get in this cycle of like, "Oh, fee compression. Oh, no, AI. Oh, no, robo-advisors. We must add more to justify our fees." And often I have found that adding more actually makes it less valuable to people.
Michael: Well, yeah, in the logical extreme, you get to the, "When I buy a service and I use the service, it feels great. When I buy a service that has 20 things and I use the same one thing that I do, all I can see is that it gives 19 things that I don't use and don't have the time to use. And I feel bad that I'm not using it." They say, "Well, if they charge me for 20 and I only use one, apparently, I'm not a good client and not utilizing the service. Well, in fact, I'm probably wasting my money because I only use 5% of it. So, maybe I should just let it go because clearly, I'm not doing it well." It's the same thing that I was totally fine...
Carl: Totally.
Michael: ...paying for until you gave me a whole bunch of other things that I can't use and made me feel bad that I'm not using them. And then made me question whether I'm getting the value for my own dollar because now I just see all the things that I'm not using.
Carl: That was really a revelation to me when I started to understand... I actually started calling it utilization rate. When you start adding stuff, because it inevitably happens where you're like, "Oh, we had a client leave. They must have left because we didn't have enough stuff. So, let's add more stuff." Now, I think your biggest battle, I really think in the value conversation, the biggest battle is confusion and overwhelm. We confuse clients and we overwhelm them like, "Oh, plus you get a knife. Plus you get a Ginsu knife like the old TV commercial." I was really surprised that people would leave a service model because you gave them something for free. I was like, "What's that about?" And it's exactly what you just painted. It's called the utilization rate. It's like, "Well, wait, if you're offering all those things and I'm not using them, I must not be a good fit. I'm probably overpaying." So, trying to match not only the things the clients value, and then also thinking through utilization rate, and if people are utilizing something, take it away, just quietly in the middle of the night. Remove it if nobody's using it.
How The "Engagement Fallacy" Can Manifest In Advisory Services [14:59]
Michael: I'm fascinated by your comment earlier of the engagement fallacy. I feel like just one step further on this because even when we talk about, "what can we take away because they don't actually value it", the other version of this... So, even when I think back to things like client meetings, there was always a point to me. It's somewhere like five to seven years into the client relationship where you're on whatever meeting cadence it is. I'm assuming one of our better clients. We're meeting with them two or three times a year, a client meeting cadence. And we get to some point where, again, we're like five to seven years in, and we reach out for the next meeting and the client says something to the effect of, "There's really not much new going on right now. So, look, we've been working there for a long time. If something comes up, I'll call you."
Carl: So good.
Michael: "If something comes up for you, call me. But short of that, I don't really think I need to come and meet. I love you and what you're doing. Things are great."
Carl: So good. Yeah.
Michael: "I don't really need to come in. I don't think we have much to talk about," which early on my gut response was like, "Oh my God, I'm about to get fired."
Carl: Totally. Oh, no.
Michael: "They they don't want to come in. They must be detaching from me. They're probably already seeing another advisor on the side. I'm doomed. I'm screwed."
Carl: Another advisor on the side.
Michael: And then I went through with a few clients and none of them actually fired us. It was like, "Oh, okay, maybe I was freaking out a little bit more than I needed to." And then it started to set in for me to say like, "Oh, so, basically, we were meeting more often than they cared. And it took them 5 years to build up the courage to tell me to stop."
Carl: This is so good because I think engagement policies may be the right term. It's so good because I remember one of my next-door neighbor who was also one of my best friends became a client, and I invited him to a client appreciation event where we were going to have somebody smart come talk about something smart. And he was like, "Hey, I have an idea. Why don't you go? And then just send me a note using email of anything that I need to know. And that'll take me 3 minutes to read instead of 60 minutes plus travel, plus schedule, plus babysitter." And he was like, "Look..."
Michael: "Because I don't actually need you to be my social coordinator. And if you're just going to impart a bit of wisdom, just send me an email."
Carl: "Just send me what I need to know." And so, one thing I think that we could do when I started doing this is set that up in advance, meaning early in the client engagement, as early as first and second meeting, start saying, "Hey, my goal..." At least the business I wanted to build. You may want to build a different business where you enjoy the meetings and that's totally fine. It's not a problem here. But in this scenario that we've been talking about here, we can say like, "My goal, if we're really good at this, we'll take this plate from you. And if we ever get to the point where we feel like we know we can do incredibly good work for you with a once-a-year meeting – high fives. That's our goal, is to get there." And so then, you're setting up in advance that you've actually become more valuable because they're not thinking about it anymore. They're not worried anymore. They're not anxious anymore. And on top of that, they don't have to come to meetings, and they don't have to go to a lunch and learn, and they don't have to read. They don't have to do any of that stuff because if it was important, Sally's going to call me if it's important.
Michael: Well, to me, then it comes right back to...this is why I'm fascinated by the framing. Like, "Yeah, I feel like we have this engagement fallacy." Again, the first time a client said they want to meet less, my first thought wasn't...
Carl: Mine, too.
Michael: "...like then I guess we just don't need to." Like, "Oh, I'm so sorry. I was bugging you with all the meetings." My brain didn't even go there. I'm in like, "Oh my gosh, they're about to fire me. They're about to break up with me. This must be the breakup moment. It's coming any moment." Just the immediate fear panic set in of, "Oh, if their engagement level is going down, I must be in trouble." Not that, "Maybe if their engagement level is going down, it's because they're so happy they don't need more, or heaven forbid, it's going down because I was actually basically bugging them with too many meetings. And it just took them 5 years of client relationship to tell me to stop asking them for meetings."
Carl: I agree. I think there's a warning here, though, that's interesting, that I noticed this, and I had a client advisory council that once a year, I would take 8 clients, 8 client households, so 16 people. We'd have a meeting where I'd ask them questions. And I noticed that we would send out this monthly email that simply said, "We've looked at your stuff. We've said this in the past. We get a million emails about this. Please don't email. We've performed the 17-point wealth management audit. Whenever I say that, everybody wants to see the audit. Don't worry. It's just a list of stuff. We've gone through a list of stuff. We've looked at your stuff. Everything seems to be okay. Based on your financial plan, your statement of financial purpose, whatever, everything seems to be okay. If anything's changed in your world, let us know. If not, we'll talk to you soon." We'd send that email out and nobody would reply to the email, or I'd make a phone call, and they'd be like, "Fine, that's great. Everything's good." "Okay, how are the kids?" "All right, great." And so, at the client advisory council, I asked once, I'm like, "Look, it's pretty obvious to me that this doesn't matter much. There's never anything to change or update. Is it okay if we just stop?" And all the clients were like, "No, we love knowing that somebody is on top of this." So, this engagement fallacy is like...
Michael: "I appreciate that you asked. Don't be offended that I say no and don't engage with it every time. I still appreciate you asked."
Carl: Just knowing. It was amazing. So, I think, to me, that's the key here is find a way to regularly remind them that you're on top of things. Just like, "Hey, we've looked at all your stuff. If anything's changed, simple email. If anything's changed, please let us know. If not, we'll see you at our annual state of the plan meeting in February. If anything's changed." And so, you're just finding a small little way. I loved, "We have 17 points we review every month, or we have 12 points, or we've looked at everything, your dividends are being reinvested."
Michael: You realize 17 is better than 12. Don't downgrade it, Carl.
Carl: Of course. Whatever. Like, "Is your beneficiary designations correct?" We had a whole list. We just made a list of everything we did. And then we'd tell them, "We've gone through the checklist this month. Everything looks great on our end. If anything changed on your end, and then we'll see you in your annual state of the [plan]. If anything comes up between now and then, we're one email away." So then, I think you're really hitting this both like, "We want you to know we're engaged. We want you to know we're looking at your stuff and go about your lives. That's what we're here for, to remove stuff from your plate." Here's an example. Does anybody really want...? This is going to be controversial. Does anybody really want a document's fault? Some clients do. But if nobody's using it, is it your job to force them?
Michael: Well, and how many new clients do you get today who have been living their lives for the past 3, 5, 7, 10 years and do not already have someplace that they put electronic files?
Carl: Dropbox.
Michael: Yeah. Who really doesn't have the...? It's one thing to say, "Look, I've got a document portal for where we securely share files back and forth between clients. I'm dropping you. We often have that with our service providers. Please don't email me things that have private information." But, yeah, just try to make the distinction like, "How do we exchange files back and forth securely? Do I need to give my clients a service of a document vault to put all their financial statements and their information and their wills and their trusts and whatever else as though they don't already have something?"
Carl: And again, maybe there's use cases for that stuff. There are. I can think of them right now. It's really important. But I'm simply remembering back 10 years ago when I was forcing people to use those things. And people were like, "I don't want to use that. I got a file folder at my house. My husband or my wife know where it is. The kids know where it is. We're good." So, I'd be like, "No, you have to use it." And it'd be like, "The utilization. Oh, no, they must not like our thing." And like, "No, we're good." So, it's just an example.
Michael: A lot of firms I see, our client portals have these 10%, 20% utilization rates.
Carl: Interesting.
Michael: One version says, "Okay, we're not doing good enough a job engaging our clients. We have to get the engagement rate up. Look how few people are using the portal." And the other version is, "Or maybe it's not that useful to them. And how much time could we save by not trying to offer that?"
Carl: Yeah. And I don't know the answer either way, but that's exactly the inquiry I would engage in. Like, "Well, maybe it's not important to them."
Michael: So, I feel like there's an implication in the engagement fallacy framing that, basically, it's us, not them. That's the thing we're doing to assuage our fears of whether we're offering enough.
Carl: Yeah. Are we valuable? The conversation we had over and over where people are like, "Man, a teacher gets paid 1/4. How am I justified?" "Oh, no, AI, oh, no, all those things." Yeah, it's us. I don't think it's your client.
Michael: And that's more terrifying when clients really aren't engaging much. "Do they do they still like me? Do they still love me? Are they still engaged with me? Are they still rejecting me?"
How To Figure Out What Financial Planning Clients Really Value [25:05]
Carl: These are deeply human feelings, of course, like deep empathy for this feeling. And the question really becomes like, "Wait, who said somebody was upset? Who said they're leaving because they didn't return your email? Who said?"
Michael: Well, I was going to ask, so how do you separate the wheat from the chaff? How do you figure out whether it's a thing they really don't value and I should stop, whether it's your example,87 they totally value it, even though they completely don't engage because they're so appreciative that I was thoughtfully offering a thing that they just persistently decline and don't use? Make the case, maybe...not maybe, I can think of client scenarios where they were probably quite happy to be asked to come into the office several times a year and then persistently declined it. Wasn't bad that I was asking. They didn't want to get the traffic and come up, but they probably appreciated that we were diligently reaching out to them, saying, "Now's the time for the check-in. Did you want to come into the meet in the office?" Then they'd say no. And they weren't getting angry or rejecting us. They just really were cool and trust us and happy, but probably appreciated that we asked. So, how do you figure out which is which? Sounds like your approach was client advisory board?
Carl: Yeah, here's all I would do. I'd just run experiments. And one thing to keep in mind in experiments is revealed preferences are more valuable than stated preferences. And so, here's a crazy example. And again, I don't know if this works in a big firm, a small firm, a little firm, but just start paying attention. What if you didn't do something? We had a... not with clients, but we had a service once where we were pretty sure nobody was using it. And so, we did a security global reset of passwords where everybody would have to go in and get a new password. And it was like a security audit anyway. It was valuable anyway. And...
Michael: You waited to see how many clients actually reset their password.
Carl: No one reset their password. So, that's interesting. Asking the client advisory council, "Do you want this email?" That's an experiment. It was a stated preference rather than revealed. A revealed preference would be, for instance, does anybody listen to "Behavior Gap Radio?" My daily podcast? Well, all I have to do is not do it for a week and see if anybody misses me when I'm gone. If I get emails like, "Where did it go?" Then that's interesting. And again, these kind of experiments where the sample size is small, we don't want to over-index on any of the results. But I think you just use the phrase like, "Oh, that's interesting." So, I just run experiments like, "Is there something you're doing?" "Hey, we've been meeting every quarter for 2 years. I've been making you drive in. Would you like to do this via Zoom?" Or, "I was thinking we could get away with meeting twice a year. What do you think?" "Oh, man, that'd be nice." If you do a quarterly client appreciation event, maybe ask. If it's really hard work to get anybody to come, well, that's interesting. If you've got a service that you're trying to wrangle people to use, interesting.
Michael: Yeah, I think my struggle, it's one thing... I totally agree. If I'm trying to offer a new thing to my clients and it's really hard to get them to engage with it, maybe they just actually don't really want the thing, and I should stop. They're voting with their feet. They're revealing their preferences by not jumping at the new tech or offering or portal or whatever it's that we're rolling out. My struggle is the subtract part because I'm terrified I'm going to take something away and then people will be pissed, and then I may or may not have already done damage by the time I try to put it back. So, I actually agree with you very much on the dynamic of revealed preferences are better than stated preferences. Sometimes people say they want a thing, and then they don't use it, or they say they don't want a thing, but then they actually get upset when you take it away. So, looking at what they do is much better than just what they say. But if I take away something and what they do is get pissed, it's kind of a little bit...
Carl: Yeah, let's frame this a little bit clearer. Don't take away a core part of your offering without some real thought. But I think we're generally talking about things around the edges. And I think you can always add it back in. I first discovered this when I accidentally forgot to mail out quarterly reports. And I thought it was the end of the business. I realized it over the weekend. I'm like, "Oh my gosh." I've heard this story before. I was like, "Monday morning is going to be terrible. There's going to be so many upset people." Guess how many people complained? Exactly zero. And so, I forgot again the next quarter. And then I changed my ADV to say, "Reports available on demand." If you need them, ask, I'll generate a report. But we stopped mailing quarterly performance reports. I didn't know that was allowed. Clients were like, "What? I don't even open the thing." That's amazing. Nobody cared. And if they did, guess what? "Hey, man, I got one printed right here. I'll mail it to you," or, "Hey, I've got the PDF right here. I'll email it to you." That's an example of an experiment. Accidental experiment, but...
Michael: Obviously, being spreadsheet guy that I am, I'm still like, "I want data first. I'd rather do a client survey." Just ask.
Carl: You know what they're going to say, though. That's the problem. But it's something. It's something. I agree.
Michael: So, in that vein, I don't do surveys by saying like, "Do you want us to keep providing the portal? Do you want us to stop sending the quarterly statements?" Because clients, they're trying to figure out what they think you want them to answer of yes or no, and then they answer accordingly, and it may not actually be how they really felt. I just do these by saying like, "Look, here's a bunch of the things that we do on a scale of 1 to 7. How valuable do you think this is for you?"
Carl: Interesting. Yeah.
Michael: And whatever shows up with a whole bunch of really low scores, whatever is lowest on that list, maybe I could take that away because apparently people literally don't care that much. It's one thing if like, "They love everything I do. Everything gets 7s and one thing gets a 6." A 6 is pro, is still pretty good. But if the reality is the client portal, almost no one logs into, you're going to send it out and the average is going to be a 2 out of 7, or just like a 1. "I don't use it. I never log in." And you start getting a sense of where clients really are. Yes, it's still a state of preference and not revealed, but I can take that and then corroborate it against, "Well, my..." Because we're picking on portals, say, "My portal got a 2.5 out of 7." And then I go look at my utilization rates and it's 12. It's like, "Okay, that's all fitting together that the revealed preferences appear to be consistent with their stated preferences that this isn't a thing, and then maybe if I want to, I can have a client advisory board structure and ask them for feedback there." I know some advisors that will do a survey and then bring their survey results to their client advisory board, and then ask them at the client advisory board because they're like...
Carl: They're smart.
Michael: ...belt-and-suspenders approach to checking. But I like to do it with surveys where we just ask, "How valuable, like how valuable to you is our client portal, our quarterly reports, our 3 times a year meeting structure?" Whatever other thing you want to put on there and let people express.
Carl: No, that's great. I think a lot about experiment design in terms of... And this to me is just from the entrepreneurship world around product market fit. What are we offering here that's valuable? And trying to design experiments to ferret out that information. But even a survey that's like, "If you were telling your friend about what we do here, which of the following five would you tell them about? Can you list five? None of the above over these five?" Just thinking carefully. But here's where I'd love to wrap on this, at least from my perspective, is I promise you that you are doing things that clients don't value. They don't care. I don't know what they are. I don't know what they are, but I promise you. And I also promise you if you dig into it, you will be shocked. You'll be like, "What? I think that was the most important thing I ever did." And I promise you'll be shocked. And then if you do realize that, you'll be like, "Oh my gosh, my business could be so much simpler, the stuff that people really value. I could really double down on making sure we do that better than anyone." We really like, "If they call, we reply immediately, and we make sure that this one report that everybody loves is seamless and delivered perfectly. We execute flawlessly on the things they care about, and we cut ruthlessly the stuff they don't care about at all." I promise you that you'll learn things if you think that way. I don't know what, but I promise you you'll learn something.
Michael: I like it. All right. Thank you, Carl.
Carl: Yeah. Cheers, Michael.
Michael: Thank you.
Carl: Okay, let me adjust the light.
