- On September 25, 2017
Calculating the time cost of client acquisition transitions
Yes, time is money but with acquisition transitions, money is time.
Not only has a buyer spent a sizable amount of money on the acquisition but by doing so has also committed time to transition and retain the clients on top of maintaining current client relationships.
The #1 concern for buyers regarding the acquisition is client retention. Meeting with new clients multiple times in the first year goes a long way in the retention rate buyers experience.
Some buyers will spend 94% of each work day in client meetings during their first 12 months post acquisition. Do you have the time and resources to acquire and retain?
Calculating the time cost
Let’s look at an example of how quickly time flies.
The key variables in this example:
- Buyer has 300 current clients they meet with twice per year.
- Acquiring a practice with 300 clients they will meet with 3 times per year in the first year of transition.
- 200 actual work days in the year. 260 work days per year (Monday-Friday) with a typical deduction of 60 days for vacation, sick days, personal days, and difficult work days of the year to reach clients during holiday periods.
- 8 hour work day.
- 1 hour allocated per meeting
How much time will your acquisition money cost you?
This would equal 1500 client meetings per year.
7.5 total client meetings per work day
94% of work day in client meetings
Now consider additional time required for any travel time back and forth meeting with clients out of the office, all the regular phone calls you have during the day, the time required to manage and develop your staff, any current marketing programs, time required for research, portfolio construction, evaluating SMAs, paperwork, and paying your bills.
Okay, so you aren’t going to meet with clients this often?
What is the current time allocation that has been successful for you with your current client base? For your first year, and longer, depending on the complexity and client make up, a newly acquired client takes more time to retain than an existing client.
The first 3 months are critical in getting off to the right start, but the next 9 months are when extra time is spent on establishing a foundation for trust and loyalty.
Different advisors have different service models with accompanying time commitments and client meeting strategies for stretching time.
- Some enforce the 80/20 rule and spend 80% of their client facing time with their top 20% of clients.
- Some allocate by client size: 20% of clients 3 meetings per year, the next 40% twice per year, the next 40% once per year.
- Group events are smart ways to leverage your client facing time if the event is meaningful, fun, and memorable.
- Hiring service advisors that you can match up with ideal newly acquired clients allows for a high touch service scalability that does allow for more frequent client meetings but the servicing advisor is doing most of the heavy lifting with the larger quantity of clients who are the smallest average client size.
Every buyer and acquisition is unique. The point of this message is to calculate the time and have a plan, so no matter what your service style, you will be able to adequately implement with acquired clients.
Check out the free calculator in the next segment to customize your projection.
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