Boosting NPS by 20 Points: Legacy Bridge Listens and Adapts

Boosting NPS by 20 Points: Legacy Bridge Listens and Adapts

Executive Summary

Legacy Bridge Advisors, a growing RIA managing over $750 million in assets, faced a concerning decline in their Net Promoter Score (NPS), signaling client dissatisfaction and potential attrition. To address this, Chief Operating Officer Patricia Brennan spearheaded a strategic initiative to actively solicit and act upon client feedback through quarterly NPS surveys and targeted follow-up interviews. This data-driven approach resulted in a remarkable 20-point increase in NPS and an 8% reduction in client attrition, demonstrating the power of listening to and addressing client concerns.

The Challenge

Legacy Bridge Advisors experienced rapid growth over the past five years, expanding their client base by 60% and AUM by 110%. While the firm excelled at acquisition, the leadership team noticed an alarming trend: their Net Promoter Score (NPS) was stagnating and even beginning to decline. This was a significant red flag, as NPS is a critical indicator of client loyalty and the likelihood of referrals, both vital for continued growth and minimizing client churn.

Specifically, their NPS had dropped from a high of 52 two years prior to a concerning 32 in the most recent annual review. This placed them squarely in the "Good" category but far below the "Excellent" threshold of 70 or higher that Legacy Bridge aspired to achieve. Deeper analysis revealed that the decline was particularly pronounced among clients with portfolios valued between $500,000 and $1 million – a key demographic for the firm.

The implications were significant. A lower NPS translates to increased client attrition, higher acquisition costs (it costs considerably more to acquire a new client than to retain an existing one), and potentially negative word-of-mouth referrals. Legacy Bridge estimated that losing just 1% of their client base due to dissatisfaction would cost them approximately $7.5 million in AUM and associated revenue annually. Furthermore, their client surveys indicated that 35% of passives (those scoring 7 or 8) were considering alternative advisors, representing a substantial risk to their continued success. Leadership recognized that ignoring this trend could severely impact their long-term profitability and market position. They needed a proactive strategy to understand and address the underlying issues driving the declining NPS.

The Approach

Patricia Brennan, COO of Legacy Bridge Advisors, took ownership of the NPS challenge and championed a client-centric approach focused on actively listening to and acting upon client feedback. Her strategy centered around three key pillars: regular NPS measurement, in-depth qualitative feedback gathering, and swift, decisive action based on the insights gained.

First, Brennan implemented a quarterly NPS survey process using Delighted. This allowed for more frequent monitoring of client sentiment compared to the previous annual survey, providing an early warning system for potential issues. The survey included the standard NPS question ("On a scale of 0 to 10, how likely are you to recommend Legacy Bridge Advisors to a friend or colleague?") and an open-ended question asking respondents to explain their rating.

Second, Brennan focused on gathering in-depth qualitative feedback from detractors (those scoring 0-6) and passives (those scoring 7-8). She personally conducted follow-up interviews with a representative sample of these clients. These conversations were structured to uncover the specific pain points and unmet needs driving their lower scores. For example, a recurring theme among detractors was a perceived lack of personalized communication and a feeling of being "just another number" as the firm grew. Many mentioned infrequent check-ins from their advisors, a lack of proactive advice tailored to their individual financial goals, and difficulty reaching their advisors in a timely manner. Passives, while generally satisfied, expressed concerns about the transparency of fees and the performance of certain investment strategies.

Third, Brennan implemented a structured process for translating client feedback into actionable improvements. She established a cross-functional team comprising representatives from client service, investment management, and technology to review the feedback and develop solutions. This team prioritized addressing the most frequently cited concerns and implemented a series of corrective actions, including:

• Enhanced Communication: Implemented a new client communication protocol that included proactive quarterly check-in calls from advisors, personalized investment updates tailored to individual client goals, and educational webinars on relevant financial topics.
• Advisor Training: Provided advisors with additional training on active listening, empathy, and personalized client service.
• Fee Transparency: Created a simplified fee schedule and a clear explanation of all fees in client onboarding materials and ongoing communications.
• Investment Strategy Review: Conducted a thorough review of underperforming investment strategies and made adjustments to align with client risk profiles and market conditions.
• Improved Accessibility: Implemented a dedicated client service hotline and expanded online self-service capabilities to improve responsiveness and accessibility.

Brennan also emphasized the importance of closing the loop with clients. After implementing changes based on their feedback, Legacy Bridge proactively reached out to detractors and passives to inform them of the actions taken and solicit their feedback on the improvements. This demonstrated that their voices were being heard and that Legacy Bridge was committed to providing a superior client experience.

Technical Implementation

The success of Legacy Bridge's NPS improvement initiative relied on a strategic combination of technology and process integration. Key technical components included:

• Delighted: Used for administering and analyzing NPS surveys. Delighted's user-friendly interface allowed for easy survey creation, automated distribution via email and SMS, and real-time tracking of response rates and scores. The platform's built-in analytics tools provided valuable insights into trends and patterns in client sentiment. The data was segmented by client demographics (age, AUM, risk tolerance) and advisor assignment to identify specific areas for improvement. Delighted's integration with Zendesk allowed survey responses to automatically create support tickets for follow-up. The annual cost of Delighted was $2,400.

• Zendesk: Employed as the central platform for tracking and managing client feedback tickets. All NPS survey responses, client emails, and phone calls were logged as tickets in Zendesk, ensuring that no feedback was overlooked. The tickets were assigned to the appropriate teams (client service, investment management, or technology) for resolution. Zendesk's reporting capabilities provided visibility into the volume of feedback, resolution times, and client satisfaction scores. Specific tags were used to categorize the type of feedback (e.g., "communication," "fees," "performance"), enabling the team to identify recurring issues and prioritize improvement efforts. The annual cost of Zendesk was $5,000.

• Internal CRM (Salesforce-based): Integrated with both Delighted and Zendesk to provide a comprehensive view of each client's feedback history. This allowed advisors to see all previous interactions with a client, including NPS scores, survey responses, support tickets, and communication logs. This 360-degree view enabled advisors to personalize their interactions with clients and address their specific concerns effectively. The data from the CRM was used to create dashboards that tracked key performance indicators (KPIs) such as NPS, client retention rate, and client satisfaction score. Legacy Bridge leverages Salesforce Financial Services Cloud at an approximate cost of $20,000/year.

The integration between these systems allowed for a seamless flow of information, enabling Legacy Bridge to proactively identify and address client concerns, improve service delivery, and enhance the overall client experience. The technical team developed custom API integrations between Delighted, Zendesk, and Salesforce to ensure data consistency and accuracy. These integrations automated the process of creating and updating client records, saving time and reducing the risk of errors. Specifically, the team used Python scripts to pull data from Delighted's API and push it into Salesforce every night, ensuring that client records were always up-to-date.

The calculation of NPS was performed using the standard formula: (Percentage of Promoters - Percentage of Detractors). For example, if 60% of clients were promoters and 20% were detractors, the NPS would be 40.

Results & ROI

The implementation of Legacy Bridge's client feedback initiative yielded significant positive results, demonstrating a clear return on investment.

• Net Promoter Score (NPS) Increase: The NPS increased from 32 to 52 within six months of implementing the new strategy – a substantial 20-point improvement. This placed Legacy Bridge in the "Excellent" category and significantly improved client loyalty and advocacy.
• Attrition Rate Reduction: The client attrition rate decreased by 8% within one year. This translates to a savings of approximately $600,000 in AUM-related revenue, based on the average client portfolio size and fee structure.
• Increased Client Retention Rate: The client retention rate increased from 92% to 95% in the same period.
• Improved Client Satisfaction: Qualitative feedback from clients indicated a significant improvement in satisfaction with communication, service delivery, and fee transparency.
• Referral Rate Increase: While difficult to directly attribute solely to the NPS initiative, Legacy Bridge saw a 15% increase in client referrals in the year following the implementation.

The financial impact of these improvements was substantial. By reducing attrition and increasing client retention, Legacy Bridge was able to protect existing revenue streams and generate new revenue through referrals. The cost of the initiative (including software subscriptions, advisor training, and staff time) was approximately $50,000, resulting in a significant return on investment. Specifically, the increased retention of 3% of clients with an average AUM of $800,000 each at an average fee of 1% of AUM amounts to an additional $24,000 in revenue per client or $720,000 in total, easily justifying the $50,000 investment.

Key Takeaways

1. Actively solicit feedback: Don't wait for clients to complain. Proactively seek feedback through regular NPS surveys and follow-up interviews.
2. Listen and take action: Client feedback is only valuable if you act on it. Develop a structured process for translating feedback into actionable improvements.
3. Close the loop: Let clients know that you've heard their concerns and that you're taking steps to address them. This demonstrates that you value their feedback and are committed to providing a superior client experience.
4. Segment your data: Analyze NPS data by client demographics, AUM, and advisor assignment to identify specific areas for improvement and tailor your approach accordingly.
5. Invest in technology: Leverage technology to streamline the feedback gathering and analysis process and to improve communication and service delivery.

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