In Daniel Pink’s bestselling new book To Sell is Human, he compellingly makes the case that it’s a brave new world for all of those in the business of persuading, influencing and convincing others, i.e. which is pretty much all of us.
In the old days, the balance of power between buyer and seller was greatly skewed towards the seller by virtue of the fact that the seller had all of the information. Pink calls this ‘information asymmetry’. Sellers had all of the information, knew all of the choices, and were able to control the conversation. It was caveat emptor, or ‘buyer beware’.
These days, the worm has turned. Buyers have lots of information, a multitude of choices, and many ways to enter (and even control) the conversation.
As coaches to financial advisors, we have observed that the savviest of advisors fully understand this new dynamic…and use more nuanced, client-centric approaches to guide investors to make their decisions.
1) Information overload and the paradox of choice. In The Paradox of Choice, psychologist Barry Schwartz argues that more consumer choices were not helping consumers. Indeed, greater choice was leading to more confusion and anxiety, not less. (Confused buyers don’t buy…they freeze.) In the world of financial services, AllianceBernstein is a good example as to how limiting private client investment choices through a closed-architecture can also eliminate investor bewilderment and angst. Going forward, one can argue the sustainability of this approach, especially to Baby Boomers and Gen X and Gen Y where ‘choice’ is seen as an immutable right. However, the AllianceBernstein’s past success has been well documented. Simple is good. Less is more.
2) Listen with the intention of understanding, not responding. Too often, our ‘listening’ isn’t really listening. We are simply waiting until the other person pauses to take a breath, and we then jump in to say what we’ve planning to say all of the time. What we observe is that the most successful financial advisors today are great listeners in that they are able to: (a) take in information from others while remaining nonjudgmental and empathetic, (b) acknowledge the speaker in a way the invites the communication to continue, and (c) provide limited, but encouraging, input to the speaker’s response, carrying their idea one step forward.
3) Find problems that people don’t know they have. It’s one thing to solve problems that people are fully aware of. However, the most adept financial advisors are adept at being ‘problem finders.’ They are able to identify a problem that someone doesn’t even know they have (yet). They can ask the question where the investor responds, “Gee! That’s a good question. Nobody’s ever asked me before.” When financial advisors are able to illuminate problems that investors don’t yet recognize for themselves, they are in a perfect position to offer a solution.
Daniel Pink argues that sales have changed more in the past 10 years than it has in the prior 100. Today, selling is ultimately about service. Financial advisors who understand this changed dynamic have a strong advantage over those who don’t.
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