Vendor Versus Partner: What Advisors Can Learn from Fast Food

By John Pojeta

Do you have clients or do you have customers? When you engage another business for a service or a product, do you treat them like a vendor or like a partner? These distinctions may seem like a pointless exercise in semantics, but if you approach your relationships with the wrong lens for the wrong situation, you could be missing out on key opportunities to grow your business.

Like most advisors, you probably have a mix of both clients and customers. Your Grade A clients may occupy 20 percent of your list but generate 80 percent of your revenue. As for the other 80 percent of your list, they may occupy various points on the sliding scale of customer or client, skewing more toward the customer end of the spectrum.

And that is normal. A client relationship is more akin to a partnership. Each party recognizes the value of the interaction and is willing to work together to achieve a goal. Conversations are ongoing and frequent. Both parties recognize that, like all relationships, growing pains and obstacles are unavoidable, but the quality of the engagement makes enduring those bumps worthwhile.

On the other hand, a customer relationship is much more akin to working with a vendor. The transaction is mostly black and white: one party trades money for a product. Once that product or service has been delivered, the relationship is over. A vendor relationship is not better or worse than a partnership. Both can be wholly productive in the right situations. However, understanding the expectations of each party at the outset is still critical. This includes the way you engage prospects as well the way you engage services designed to find you new prospects.

For example, restaurants use vendors on a daily basis to maintain their supplies of everything from ingredients to ketchup packets to napkins. They may use the same vendors for decades, but the relationships, while completely productive and successful for all parties, rarely progress beyond an exchange of money for a batch of product. In most cases, that’s perfectly fine. However, a partnership, if done right, can produce explosive growth.

In the case of two already successful companies, a partnership led to:

• The sale of over a billion units of their co-produced product

• The addition of 15,000 employees to meet the new demand

• The expansion from one pilot plant to six-dedicated manufacturing lines to keep pace with sales

The concept for this new product was one of 30 possible ideas, and it took the development team over two years and 40 iterations to get this single concept right.

But when Taco Bell and Frito-Lay finally debuted their new product, the Doritos Taco, the market exploded. Their partnership — the combination of their unique strengths, insights and knowledge — changed the fast food market forever.

Finding New Business in Your Industry

When it comes to finding new business in the insurance and financial planning industries, producers often engage an outside firm to generate leads or to set appointments with qualified prospects.

Lead generation is a product. An advisor pays a set fee for a finite number of leads that fall within a certain criteria. End of transaction. Appointment setting, however, is more of a premium service. Most involve an onboarding process to help callers adapt their messaging to a client’s brand, and the team behind the callers continues to work with the advisor to refine the approach and dial-in the quality and types of set appointments.

The most successful appointment setting programs are partnerships. Treating an appointment setting firm like a vendor can waste precious time and stunt potential returns. You might not be working together to create the world’s tastiest taco shell, but your relationship is the union of two unique specialties in the space. You have the expertise to serve clients, and a worthwhile appointment setting firm specializes in initiating relationships with your target audience.

An appointment setting firm has a vested interest in your success, and you should have a vested interest in theirs. Success in this relationship is mutual, but achieving it requires open communication and a willingness to collaborate.

The most successful appointment setting firm clients have the partnership mentality. Take Jeremy, an advisor from Connecticut, as an example. From the beginning of his relationship with his appointment setting firm, Jeremy approached the firm as a partner. Jeremy makes about $300,000 annually from the appointment setting program and is projecting an increase to $500,000 by the end of this year.

Here some of Jeremy’s key behaviors:

•  Whenever Jeremy visits or passes through the city where the appointment setting firm’s office is located, he makes it a point to visit and to talk with everyone, from the chief executive officer to the individual callers who handle his program.

• He was engaged with the firm’s onboarding process, working hand-in-hand with their team to develop and refine his storyboard.

• He saw appointments as opportunities to refine his messaging and his target audience, and he relays feedback to his appointment setting firm in a timely and constructive manner.

• He has taken advantage of the firm’s in-house sales training to better capitalize on set appointments, and frequently updates the firm on his and his goals.

From the start, Jeremy treated his appointment setting program as a partnership. He endured the rocky transition from selling to referral prospects to the prospects that he met through set appointments and that has paid off. Appointment setting is now a key part of Jeremy’s new business that continues to generate consistent activity.

Are You an A Client or a C Client?

A partnership is a two-way street, with each party having a responsibility to contribute to the relationship in a meaningful way. When one party falls short, no amount of hustle or additional resources from the other half can compensate for the loss because each party brings a wholly unique perspective to the table. Taco Bell is an expert in tacos and Frito-Lay is an expert in Doritos. As an advisor, you are an expert in your services and your business while your appointment setting firm is the expert in finding new business.

If you are reluctant to return calls or emails, or you are unlikely to work through a collaborative onboarding process, an appointment setting program may not be for you. Your budget may be better spent on lead generation or another form of passive advertising.

If you are open to a partnership, however, and are willing to invest more than just money into a relationship with an appointment setting firm, you have the mentality that can lead to significant returns. When an appointment setting program is coupled with an engaged and motivated advisor, the growth can be substantial.

But it all comes down to how you approach the relationship.

John Pojeta is the vice president of business development at The PT Services Group. He previously owned and operated an Ameriprise Financial Services franchise for 16 years. John may be contacted at [email protected].