Lessons for Financial Planners from the Thomas Cook collapse
Blockbuster Video, Woolworths, and now Thomas Cook.
Three High Street names in the UK that collapsed after failing to keep up with changing times.
What do these examples of once-successful businesses mean for Financial Planners and other professional advisers who fail to innovate?
In this video, why advisers face a simple choice; adapt or die.
This week, Britain’s oldest travel firm, Thomas Cook, has collapsed.
The 178-year-old holiday firm failed to secure last-minute funding and entered liquidation, triggering the largest ever peacetime repatriation of more than 150,000 British holidaymakers.
As well as causing inconvenience for travellers, Thomas Cook’s demise places 22,000 jobs at risk worldwide, including 9,000 here in the UK.
I’ve no doubt there will be a lot of debate over the coming weeks about the causes of this business failure. The comments of travel expert Simon Calder, I think, have it spot on. Calder said Thomas Cook “wasn’t ready for the 21st Century”.
He said: “It was using a model that was great for the second half of the 20th Century where people would obediently go into their local travel agency and book a package holiday.
“Now everybody can pretend they are a travel agent. They’ve got access to all the airline seats, hotel beds, car rentals in the world and they can put things together themselves.
“Thomas Cook simply wasn’t differentiating enough.”
This should be a wake-up call for financial planners and other professional advisers. Failure to innovate, differentiate and stay relevant in a changing market environment places your business at risk of failure.
Risks like these don’t usually creep up on businesses. If you’re receptive to change, you can see them coming a mile away; like a slow-moving steamroller. It then becomes your choice entirely whether to get out of the way or stay rooted in your current position.
From a marketing perspective, there are three things professional advisers need to consider to stay relevant.
Firstly, how is your customer behaviour changing?
All too often, we focus on what our competitors are doing. This is a risky strategy. Yes, some of your competitors could be pursuing the right approach, the winning strategy in the long-term. But following competitors can be a case of the blind leading the blind.
Instead, go straight to the source. Talk to your customers. Don’t make assumptions about customer behaviour. As Financial Planners, it’s too easy to assume we know our clients well; after all, they tell us everything about their wealth, their health, their families.
But without asking the right specific questions, we could be missing big changes in their behaviour.
For example, what newspapers do your clients read? Do they still read newspapers? We know that the UK newspaper industry is in decline. One industry report predicted that 1 in 10 UK print publications would cut its frequency of publication in half, go online only or shut entirely.
It’s essential to find out about the media your clients are consuming. I would hazard a guess that, if they are like the majority of people, they are increasingly getting their news, insights and opinions online these days. You need to know this because you need to know what you’re competing with when it comes to their attention.
One powerful way to understand your clients and their changing behaviour is through the use of client advisory boards. These are small group meetings with a select number of your most influential clients, designed to learn more about them, their hopes and dreams, their fears and concerns. Half a day a quarter, plus a nice lunch, spent with 8 to 10 of your clients in a room, run to an agenda, can help to shape your business strategy in the future.
Use these client advisory boards as a sounding board for any changes you plan to make within your business, and as a way to keep up to speed with changing client behaviour.
The second thing you need to consider to keep your business relevant in the 21st Century is your total brand experience.
It’s no longer enough to believe your brand is represented by the one or perhaps two face-to-face meetings you have with your client each year. Instead, your brand is everything you do, and everything you don’t do.
Keep in mind here that you’re now competing with non-financial services brands. To wow your clients, you need to measure up against the likes of Apple, BMW, Waitrose and all of the other brands your clients experience regularly.
This means considering every ‘touchpoint’ your clients have with your business. The impression you leave them at a face-to-face meeting is vital, of course. Consider the meeting venue, the refreshments on offer, how they are welcomed at the door, even how they spend the rest of their day.
Going beyond the experience of the meeting, what’s their interaction with your business and your brand during the rest of the year. I think this is all about consistency. Every interaction with your business needs to have the same feel, as we build our impression of brands based on multiple interactions.
Make sure your online presence reflects your offline presence. On a number of occasions in the past few weeks, I’ve spoken with business owners who have websites and social media profiles which are miles apart from their actual businesses. In one case, an estate agent selling multi-million-pound properties had a basic website which fails to reflect his premium brand.
Everything you do, including all of your marketing collateral, needs to reflect your brand consistently. One good exercise is to lay all of your printed material out on a large table so that you can view it together. Is this the impression you want your business to give your clients?
The third thing you need to do to keep your business relevant is to take risks.
Treading the same path that has got you to where you are today, is unlikely to get you to where you want to be tomorrow. Following the established protocols and traditions of your profession won’t help you make progress either.
One of my favourite quotes from the book Purple Cow by Seth Godin is, “In your career, even more than for a brand, being safe is risky. The path to lifetime job security is to be remarkable.”
Being remarkable involves taking risks and differentiating yourself from everyone else. I think this is especially important in our increasingly noisy online world. Getting your message across, even to your existing clients, requires more than just making a louder noise.
What can you do, today, to take a risk and behave differently to everyone else, differently from your past behaviour? Stay true to your values in doing this; don’t suddenly act like an entirely different person or brand.