Is There A Good Way To Lose Clients?

DJ
Posted by | April 11, 2012

Examining client tradeoffs through Facebook’s acquisition of Instagram

Debrief

  • Facebook acquires the extremely popular Instagram app for one billion dollars (side note: Instagram employees are worth $77 million a piece).
  • Last week, Instagram released their much-awaited Android app, opening it’s user base to hundreds of millions more users.
  • Last year, Instagram was ranked number 1 in the iPhone AppStore (read: it’s quite popular).
  • Zuck claims to leave Instagram largely as is, with it’s own network and sharing options, etc.
  • While nobody knows the number, and taking into account the Android release and consequential flood of users that resulted (CNET’s account increased by a third in one week), Instagram has a lot of users–close to one hundred million, maybe?
  • The outcry on Twitter and other networks claiming that they now have to quit Instagram because of the acquisition, has been staggering.

Let’s say Instagram loses five million users by the end of the week. How many more will they gain in the next week, month, and year via the Facebook acquisition? Probably a lot more. I think Facebook made a very wise decision (albeit, they might have overpaid by a few quid) in their purchase of Instagram. As we’ve said before, Facebook’s “currency” is photos, and shit, photos are what Instagram DOES. I also think that this could put a BIG hit on Pinterest and all that buzz, but that’s to be seen as we don’t know what Zuck’s plans for Instagram are just yet. But what does this have to do with financial advisors?

Ok advisors, you’re Facebook, your secret moneymaker is Instagram, and your clients are their users.

There’s this thing you’ve been thinking of, a big change in your business that you know is going to affect your client base. You know that this thing–maybe it’s a transition to all-digital, a new strategy on how you work with clients, or a specific type of client you’re going to focus on from now on–is, at least, going to lose you a handful of clients, either immediately or in the near future. But you strongly believe that this change will build your business and make you more money in the long run. Would you do it?

They might be good clients. They might be some of your favorite clients, but you’re going to lose them. Could you do it? Is there a good way to do it? Is it going to be worth it in the end?

These are the questions Instagram asked itself before agreeing to the merger, but they got paid upfront. These are also the questions Zuckerberg is probably asking himself right now. Remember, you’re Zuckerberg in this drawn-out analogy. That’s business. Risk and reward.

Is there a good way to lose clients when you know it’s what’s best for your business?

DJ

DJ

DJ is a freelance writer, hopeful photographer, and social media has-been. He writes to financial advisors about lifehacks, science, technology, business and marketing for Blueleaf, a software that helps create dramatically simpler, more scalable financial advisory businesses. You can find DJ across the web (about.me/djswitz) or you can just follow him on Twitter (@djswitz)!

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