Wednesday, February 11, 2009

Tuesday, February 10th

I have to admit that on Tuesday’s class when I had to ask Doug what he meant by “intimacy” in business before I could lay out my argument for it, I felt a bit stupid after he answered my question. After all, it was a very simple concept that had been temporarily twisted by my Latin mind. But then, after class, when I asked the rest of the Latin gang to tell me their respective positions on “intimacy” (no pun intended) in business they all asked the same thing that I asked in class: mmmm, what exactly do you mean by “intimacy”? (some even gave me a naughty face). So, enough said, I am not alone. Plus we had been talking about Masters & Johnson and the fact that they watched 10,000 sexual acts so I guess it was OK that I was slightly confused…oh, and I am sure everybody checked but, just in case, Persian Kitty is still alive.

Anyway, now let’s move on to the important stuff. For me, some of the most interesting slides were the ones with the Retail Value curve because in a way they highlight the increasing importance of intimacy. It is a concept that is applicable across most industries. As a former Private Banker I can certainly relate to the importance of intimacy. In that industry, I quickly learned that it’s all about intimacy and developing a good relationship with the customer. Most bankers have access to very efficient operations and can buy any stock or bond in the blink of an eye. Sometimes you might even be charging slightly more for a similar level of efficiency and returns but there’s a myriad of intangibles that determine whether a client stays with you or goes to another Financial advisor. After all, how can you put a price on trust? As an example, in 2006, during my first year as a Private Banker, a client gave me $ 2 million to manage and he gave the exact amount to a competitor. He told me that by the end of the year he was going to have only one consolidated account. A year went by and the client came for a visit with a portfolio analysis from the other bank. We had been outperformed by them, not by a very wide margin, but outperformed nonetheless. Therefore, I was sure I had lost the account. To my surprise, he then showed me a copy of the letter he had given his other advisor asking for all his funds to be transferred to the bank I was working at. I guess he noticed my surprise because he immediately added, with a smile in his face: “Martin, I just trust you a whole lot more, keep up the good work”. Some years from now (maybe decades who knows), efficiency and accessibility will be almost standard, everybody will operate in a highly efficient environment. When that time comes, what will truly make a difference will be the ability to differentiate ourselves from the rest on a personal and emotional level. I just hope I will be ready for it!!!.

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