Do you remember what things were like just before 1994? I suspect it feels like a lifetime ago and not only because just over half a century has passed. Ah! It is coming back to you now, right? The end of Apartheid! The birth of Hope and Optimism, the twins of the Rainbow Nation.
I want to share with you some of my experience. I do so, first to remind all of us about the insidious nature of Institutional Racism prior to 1994 and that we cannot gloss over this. Secondly, I want to show how we responded practically and strategically when we started Northwood Financial Services cc. If the latter resonates with you as an entrepreneur and you want to learn more, perhaps you want to enter into a dialogue with us through our Business Coaching Unit.
Layers upon layers upon layers
We learnt it wasn’t just a matter of ‘Accepting And Celebrating That We Are Now One’. We could not ‘Just Start Over As If Nothing Happened’. Apartheid did not just feed us a daily diet of disinformation and hate. It systematically and thoroughly ensured that in all areas of life people who were not White heterosexual males were treated differently. And yes – there were all kinds of shades of discrimination. This evil goes by many names: Institutional, Systemic or Structural Racism.
Apart from the obvious examples, it determined which bench you could sit on when you waited for your (separate and more crowded) bus, where your children could swim in the sea, which counter you could use at the post office or where and to whom you could donate or receive blood from. It determined what jobs you could apply for, your chances of promotion and what you would be paid, compared to others, for the same work. Because ‘it’ was ‘everywhere’ ‘it’ became normalized and invisible.
Your ethnicity, your gender and your sexual orientation all influenced how you would be treated, what opportunities or services you would have access to or be excluded from. Racial profiling made insurance cover for Black and Brown people more expensive. A woman could not make any financial or legal decisions without her husband’s approval and signatures once married. Anyone who dared admit they were members of the LGBTQIA+ community could only buy insurance from one company, who charged them 200% extra in fees. They had to be tested once a year for the ‘Gay Disease’ called AIDS because they were assumed to be automatically at risk of contracting said disease. Should they test positive, the value of their pay-outs would drop to less than 10% of what they would have received if they were not HIV positive.
Trevor would not have it
Post-1994, the first Minister of Finance, Trevor Manual, fined the insurance companies billions of Rands for their unscrupulous investment practices. Past employees had to be informed and the pension and provident contributions from their ex-employers had to be paid out to them.
Rats jumping ship, repeatedly
It was not a good time to be an insurance broker! The sensational revelations made a job selling insurance start to look a lot like social leprosy. My father asked me why I was embarrassing the family by selling insurance! Billions of Rands were wiped off Retirement Annuities books as clients cancelled faster than new policies were sold.
It was best to go in, make as much money as you could from commission and get out. Company hopping became a national sport. Companies guaranteed a basic income for six months for any new agent. Thereafter they had to rely on commission from new sales and the fish were not biting quite so enthusiastically anymore.
Even today, the way commission-based agents make money is by selling you new products. Some unscrupulous agents may even try to get you to scrap your old policies and sign-up for new, more comprehensive products. The ‘added value’ often translates to ‘more expensive’ as you obviously pay for all the shiny bells and whistles.
Nico Kleynhans would not stand for it either
I had worked in the financial services sector for a few years before I started my own brokerage, Northwood Financial Services cc (NFS), in 1990. I wanted to offer an ethical service where transparency and fair treatment was paramount. I wanted my clients to trust that they are the centre of the (business) universe as far as I and my staff were concerned. I realized this was going to be difficult in an industry with a tarnished reputation.
So how now Brown Cow?
I asked myself what I came to understand as the crucial question – what makes us and what we offer different from everybody else?
I realized that if offering an ethical practice would be my differentiating factor, I would have to prove I am trustworthy. I had built up relationships of trust with clients that I interacted with at the company I worked for prior to launching my own company. When these clients heard that I was leaving they followed. I am proud to say that some of them, (even though they are now ancient!) have remained loyal clients up to today.
Facebook advertisements you pay for; Word of Mouth is priceless
We decided that we would rely on our existing clients to act as our mouthpieces. Our first ten clients recommended twenty of their friends. Our client numbers grew steadily and though contracts are renewable every year, clients stayed.
We banked on the fact that if you see your friends sticking around, and they consistently recommend their broker you would take a closer look. Since your friends cared about you, you would be more likely to consider at least attending the first meeting – it is free, after all!
We put words in their mouths
The bottom line to our bottom line is that we need to make sure our clients want and know how to refer others to us. There is nothing wrong with asking. We do not believe in playing games. Our clients know that if we grow, they also benefit.
So, we ask. We ask regularly. We collect testimonials from clients. We discuss with them how and what they could say about our services. This gives both them and us a good idea of how well they understand our services. In clarifying what to say to others, they often gain greater insights into their own circumstances and why they need our services.
We can do this because we build a relationship with our clients where we meet more regularly than most commission-based brokers. Our staff complement is compact, well educated, very stable and each has a designated role. There are no interchangeable, anonymous call centre agents to deal with.
We discuss their financial needs, priorities and opportunities. We assume nothing. We do not come with ready-made products that they need to squeeze their realities into. Our clients understand we see ourselves as coaches. They know we will ask the difficult questions and have the hard conversations in a non-judgmental and supportive manner.
Here are the lessons we have learnt
- Know what sets you apart and become an expert
NFS provides a bespoke service to a niche market. This means we do put quality before quantity.
- Constantly update your knowledge of your industry and the local and broader factors in the business environment that impact this
I am involved with training institutions and sit on professional committees aimed at developing practitioners and our industry.
I monitor, interpret, and comment on political and social factors and indicators that affect my clients as well as the general economic climate.
- Know why you do what you do and practice talking about it in ways that are easy to understand
NFS embraces different forms of media to spread its messages – industry-related commentary, values-grounded interpretations of events, public education and calls for economic justice. I take part in regular radio broadcasts (these are made available as podcasts on Facebook). We produce a weekly blog post which is posted on the website as well as a variety of social media platforms like Facebook and LinkedIn.
- Be present when crises arise – communicate honestly timeously, explain your interpretations patiently, reassure, offer alternatives, problem-solve
When Covid19 hit we did not switch off our phones as some Financial Advisors admitted they did! I had endless discussions with our client base. I offered alternatives and explained why I was not panicking. Those who listened and understood my timelines were rewarded when markets turned.
Most of those who had followed my advice timeously and had diversified their assets have recouped temporary losses because we offer actively managed portfolios. Some portfolios held and managed by others in the sector lost as much as 35% in a month.
Putting in the effort is rewarding
Some of the key questions we ask of our Business Coaching clients are:
- What is the biggest compliment that you would like to receive?
- How will you know when you’ve ‘made it’? .
- What would you have to do to make that a reality?
- What would you have to do to sustain such a ‘win’ over time?
Think about that for a moment. There are no right or wrong answers here. It may change as your company grows or evolves. Maybe it will stay the same.
For us at NFS it is these bits of feedback that we receive quite often:
- ‘You explain difficult concepts in ways that I can finally understand.’
- ‘I can see you do comprehensive, ongoing research.’
We know we can measure our success by:
- The number and rate at which people renew contracts year upon year
- The amount of Word-of-Mouth referrals that we receive
- The number of referrals that are converted into paying customers
It pays to invest in your relationships with clients. Apart from being the right thing to do, it ultimately makes good business sense. It is cheaper to re-engage an existing client than woe new clients. Communicate clearly. Communicate honestly. Communicate regularly. This will allow people to become familiar with your brand and your brand values. This builds trust and loyalty.