In recent posts we’ve talked about how “purposeful” businesses seem to outperform others. We wouldn’t necessarily be surprised if some readers might dismiss this as no more than new wave management mumbo-jumbo.
After all, a laser-like focus on revenue generation and keeping expenses under control is the key to business success, right? We’d argue there’s rather more to it. And that great financial results are in fact just that - the result of other things that go into making a business great.
If you’re not sure our proposition could even be possible, we have a question...where does revenue come from in the first place? Most people would simply say something like “our customers”. Our answer is it comes from a steady stream of the right customers buying the right products or services at the right price. We’d also suggest those customers are predisposed to doing repeat business.
And here’s the thing. People will only truly engage with your business and ultimately become customers (and, more importantly, repeat customers) if they buy into what the business stands for - its purpose.
If you really need convincing that a lack of clarity around business purpose can have a significant impact, we don’t think you need to look much further than the Australian financial planning industry.
Here’s an industry that according to all the research is badly lagging in terms of trust from the general community (Roy Morgan research). It’s also an industry that is bleeding customers. The industry currently has 25% fewer “active” customers than it did a decade ago. And if that’s not enough, the evidence also suggests that for every new customer financial planners sign up, they lose two.
However, financial planning is a service from which most Australians would benefit. The level of satisfaction among existing customers of planners is remarkably high. Yet only a minority - around 20% - of Australians actually engage with advice. Oh, and let’s not forget the research mentioned above that suggests it’s also a shrinking industry.
We have a theory about all of this. Probably not surprisingly, that theory has to do with clarity of purpose.
Our observation is that few individual advisers can clearly articulate their purpose to prospective customers. Certainly the relevant industry bodies don’t do it.
We’ve held the view that this lack of a clearly and consistently articulated purpose was doing the industry no favours. In light of that view, we conducted our own research among non-users of financial advice a few years back which clearly pointed to a lack of any real understanding about financial planning - its value and its benefits.
If you want to validate our contention that a “fuzzy” purpose has contributed to the current state of the financial planning industry, our challenge to you is to check for yourself. Talk to a handful (or more...it’s up to you) of advisers and ask them what they do - what’s their business purpose. You’ll get no consistency and come away confused.
Of course other factors impacting customer engagement are at play in the planning industry. In spite of those other factors though, some individual businesses are leaving the rest behind. They’re the ones that can very clearly articulate their purpose and vision in terms that resonate with potential customers.
We believe the very best businesses are those that engage customers and teams through a clearly articulated purpose, vision and strategy.
There’s endless evidence from around the globe that “purposeful” businesses outperform the rest. Not only are they the ones with the most satisfied customers, but they also tend to be the ones with the most engaged teams.
Sound like Nirvana? We believe it’s an achievable outcome for most businesses. Give us a call or click here to drop us a note to see what the possibilities could be for your business.