In early December, I had a first hand reminder that satisfaction isn’t driven by the absolute level of performance, communication or service – but rather the level compared to going in expectations.

With an invitation to speak at a conference at Whistler on December 1, in October I decided to extend my stay for four days to ski. Given notoriously unreliable snow conditions that early in the season, there was a good likelihood that the skiing would be marginal – but decided to take my chances. 

A first hand experience on the ski slopes

In late November, Whistler began sending out emails that they’d received 18 feet of snow – the most ever in any one month. Obviously, anyone planning to ski in early December had gotten incredibly lucky. This was especially the case given that ski resorts everywhere else in North America had little snow.

When I headed out the first day with some other conference attendees, we were all anxious to take advantage of our good fortune – only to be get an unpleasant surprise.

Yes, the mountain had received 18 feet in November –but as it happens hadn’t received new snow in the past ten days. Further, it had rained a couple of times during that period and as a result, the hill was hard packed and quite icy.

To make up for this, though, at least the first two days were mild and sunny.  (Sun is something else that’s unreliable at Whistler in December, as it will often be overcast and foggy with flat light.)

On Day Three, a system came in that made it very cold and incredibly windy – some of the lifts had to be closed due to wind. (I recognize that for non skiers reading this, none of this will make them take up the sport.)

 In fact, it was so unpleasant that many skiers came off the mountain early.

My last day, I debated not going out at all – but given that I had already paid for my lift ticket decided to give it a try.  While still cold and windy, it was much less so than the previous day and I skied the full day.

The role of going in expectations

In talking afterward to others who had skied the past four days, I was struck by the number who said they were pleasantly surprised by conditions on day four – even though all four days were similarly icy and it was actually quite a bit colder the last day than the first two.

What was at play here, of course, were expectations in action.

Our expectations on Day One were elevated by all the hype about 18 feet of snow – none of us were prepared for the reality that we encountered.

By contrast, Day Four’s expectations were tempered by the cold the previous day. We were all prepared for conditions similar to Day Three – so the fact that the wind had died down and the temperature was a bit warmer was a bonus.

While we were disappointed with the snow conditions, no one blamed the ski operator for the icy conditions or the cold – we recognized this is the inherent risk of the sport.

At the same time, there was lots of grumbling about the fact that lifts were operating very slowly on the two windy days – not only did it take more time to reach the top of the hill, but the wind made being on the lifts quite unpleasant. In talking to someone in management at Whistler afterwards, he explained that during windy conditions, safety requires the lift speed to be taken down.
 
Translating this to advisors’ reality

Without pushing the comparison too far, there are some parallels to client satisfaction with their advisor.

Let’s start with the good news – most people are reasonably rational when it comes to pointing fingers at things beyond anyone’s control.

No one blamed the mountain for cold and icy conditions. Similarly, while stressed and disappointed, a year ago most clients weren’t blaming their advisors for the fact that their investments had taken a hit – when talking to investors, most said “Everyone I know is down – I recognize that no one saw this coming.”

That said, just as many skiers felt a bit misled by Whistler’s avid promotion of “the biggest snow month ever”,  s ome investors did feel that the investment industry hadn’t painted a balanced picture of the downside risks going into 2008’s market meltdown.

And just as skiers were quick to point fingers at things that they did see within the mountain’s influence such as lift speeds or staffing levels, so investors can be critical in cases where they think their advisor or firm has fallen down on things within their control.

The implications for advisors

There are a few lessons from advisors from this experience.

First is the critical importance of setting expectations – both on big issues as well as small ones.

First, when a client has a problem or a question and you say “I’ll get back to you”, always specify when that will happen. You may hang up the phone planning to get back in one or two days, thinking that this is reasonably good turnaround time - meanwhile, your client may be expecting a call within one or two hours.

Second, ensure your clients understand when you run into problems that are beyond your control.

  A common source of frustration for many client is feeling overwhelmed by the volume of mail concerning the mutual funds they own. Take the time to explain that this is something beyond your control and is a function of regulatory requirements – the same applies to client statements that may be hard to understand.

One advisor who changed offices sent out a note to key clients in advance, explaining that during the 30 day transition the response level from her staff might be less than they were used to.

“No one was upset” this advisor said. “In fact, most clients thanked me for letting them know – and wished me luck on the move.”  

  Finally, recognize the element of surprise means that you’re likely to get the best response the first time you do anything new – whether it’s a client conference call, a dinner or structured telephone meeting to review a client’s statement.

One solution is to mix things up – one advisor does a different client thank you event every year, simply because he doesn’t want clients to see his events as routine.

That doesn’t mean that it doesn’t continue to make sense to do these – but recognize how quickly clients assimilate these into what they expect.

Remember, if you want to get maximum impact from what you do and clients to be pleasantly surprised, you have to constantly look for ways to raise the client experience compared to going in expectations.