Some time ago I decided to explore if there were any tools available to help me measure the strength of the relationships with my clients. It wasn’t a KPI of mine – I just wanted to understand my clients – and how I was delivering services to them – better. Yeah, I know, not something most people would normally do in their job!
There were some traditional ‘satisfaction’ ratings/scores I could use, but they weren’t delivering what I wanted. They’d also been widely discredited as being pretty much worthless.
I felt quite strongly about this at the time because my boss was 100% focused on the financial aspects of my client relationships. They cared little for the quality of each relationship, and how that would directly feed into future financial outcomes.
My boss’s then approach was (and continues to be) driven by the obsession business has with historical accounting results (and all that entails). It still happens a lot today. Most practices are focused entirely on financial outcomes (the after-the-fact consequences of client behaviours) or, as I like to call them, ‘rear view mirror’ metrics.
Long story short – I wasn’t able to find any suitable tools. So I created my own.
It’s our proprietary metric called Strength of Relationship Index™ (or StoRI Score™) and it’s the intellectual property that today lies at the heart of our service.
The StoRI Score™ measures a range of client experiences and attitudes. It predicts client intentions in the financial planning industry. These are then used to predict the resulting financial outcomes. Here’s a quick overview showing how everything is connected.
While historical results are still important to your practice and, indeed, are mandated by organisations such as ASIC and ATO for reporting purposes, if we all drove our cars by only looking through the rear view mirror, we’d all be seriously injured or worse by now.
Managing your practice by only focusing on the past will, sooner or later, result in exactly the same outcome for your business.
If you’re interested in the future, particularly being able to measure the strength of your client relationships (your most important asset, and the generator of your cash flows and profits) and predicting the financial performance of your practice, you should be fixated on the right metrics. Even if you are currently gathering feedback from your clients, I’m sure you’ll agree that one of the biggest challenges you face is actually doing something with the results.
Our StoRI Score™ has been developed specifically to help you do this.
In short, StoRI Score™ is calculated as a percentage (the higher the result the stronger the client relationship) using a client’s responses to a set of survey questions that measure a range of factors that predict things like client satisfaction, retention and advocacy (likelihood to refer). Each client who responds to our survey is assigned a StoRI Score™. We also calculate a mean StoRI Score™ for all client survey responses, so you can get both a micro and macro view of client relationships at a point in time.
Because we developed the intellectual property underpinning this metric, we can also uniquely provide you with specific insights that will help you manage the metric at client level and also predict the financial impact that would have on your bottom line – again at both individual client and practice levels.
You may have heard of a metric called Net Promoter Score® (or NPS®), but unlike NPS®, our StoRI Score™ rolls up survey responses across several key questions to provide an overall measure of the strength of a client relationship which can then be monitored on an ongoing basis and dissected to illuminate the underlying drivers and what areas require the most focus and have the biggest impact. And, unlike NPS®, our approach has been recognised internationally via the grant of patents in several countries including Australia and USA.
Don’t just take our word for it. Dr Chad Perry, Formerly Professor of Marketing and Management, Graduate School of Management, Southern Cross University, has this to say about it:
“I’ve undertaken considerable research in the field of relationship marketing during my tenure as a Professor of Marketing and Management. So I was excited to be asked to complete an independent review of Ray McHale’s rigorous research because he has extended previous research into the two key behavioural intentions of great interest to real-world managers – repeat business and advocacy. The basis of his StoRI® model was already proven in his doctoral thesis which was checked by two academic examiners and I’ve checked the survey results and can confirm they do indeed fit the usual criteria for his kind of research.
This research has allowed Dr McHale to develop practical, sound tools that enable organisations to measure how they can increase stakeholder retention and achieve advocacy for their organisation. The original research was completed in the financial sector but it is easy to adapt the survey tool to other industries and different stakeholder groups. Each firm will discover results from its own stakeholders that will provide solid foundations for improved relationships with them. The insights and actionability available through using StoRI Score™ are significant and surpass those associated with other metrics. I commend the research and the StoRI Score™ to you.”
If, like me, you have ever been interested in measuring the strength of your client relationships, you now have easy access to a service that will quickly measure your client relationships and provide you with the means to make more confident decisions about your most important asset.