Communication

Difficult Conversations After a Confidence is Broken Batch 2

Difficult Conversations After a Confidence is Broken

Managing Difficult Conversations in the Workplace

The President of a company called together his senior executives and announced that the CEO had a heart attack. The CEO was hospitalized, but after surgery he was expected to make a full recovery. The President insisted on complete confidentiality until he had more information to share.

The President was a wise man. He was formal, systematic in all his dealings, good at analyzing information, a man of integrity, thoughtful and well respected.

His Head of Marketing left the meeting feeling confused, a sense of instability, emotional, and concerned. He immediately used social media to encourage all his friends to think about the CEO and believe for a fast recovery. The Head of Marketing was empathetic and warm. He was a person who needed stability and a calm, predictable working environment. He was very well liked, very good at his job and had a wide network of friends and business contacts.

Four Primary Communication Styles Graph

Directly after the meeting, the President received a call from the media asking for a comment; the company share price dropped 10%. The next call was from the Chairman insisting the source of the leak be found and fired.

The news of the CEO’s heart attack was now only 3 hours old; the potential fall out to the business (and the family) was significant.

The President recalled his executive team kept them standing and insisted the culprit own up immediately. The Head of Marketing owned up and the remainder of the team left the room.

The President immediately put the Head of Marketing on notice saying, “I instructed you to keep what I told you in confidence. That means you agree to keep the information completely, totally secret and not to repeat the information without permission.” He continued, becoming even more analytical in his communication, “asking someone to keep a confidence is a solemn contract. You broke it.”

The Head of Marketing tried, without success, to respond. The President left the room leaving the executive confused, bruised (metaphorically speaking) and devastated that he had acted so inappropriately. His first reaction to the news was driven by feelings and a loss of certainty about his future. He’d given no thought to the family or the consequences of such news reaching the marketplace.

Communication Differences Relationship Performance

The reality of the situation is that the President and Head of Marketing were operating from their natural zone and they did not have the awareness to adapt.

Had both parties understood their inherent communication and behavioral styles this would have been a different scenario. The President would have emphasized the potential market risk. He would have understood the inherent behaviors of some of his team. He could have stressed the importance of not bringing emotions into the situation. The Head of Marketing would have understood his own reaction to the challenging news. He would have realized he’d be concerned about the potential loss of stability and safety in his environment and known how to manage his reaction to the news.

Difficult Conversations After a Confidence is Broken  Insert Photo 3

  1. Set a structured agenda and have prepared questions.
  2. Meet in a more formal environment in the office.
  3. Expect yes/no answers.
  4. Offer details and analysis.
  5. Avoid abstract ideas in communication, and keep to specifics.
  6. Present the research performed to come to the specific conclusion.
  7. Provide case studies as examples rather than having a high-level, conceptual discussion.
  8. Show the risks are minimized (not eliminated) in the recommendations.
  9. Say what you are going to do and then do it. Be very transparent.
  10. Provide them with newsletters and books, economic information.

How we handle responsibility for our decisions, as well as our mistakes, is a direct reflection on our character. However, without insight into our inherent communication and behavioral style we do not know our default reaction to a situation such as the Head of Marketing faced.

 

The Harsh Reality About Communication Styles

The Harsh Reality About Communication Styles

“We treat you like you’d treat you”. This commercial gained tremendous popularity for one reason: for effective service you need your communication styles to match each client’s unique style.

I like transactions that are easy, effortless, and fun. Save me some time and the aggravation of not having to wait in a long voicemail “queue” and I will reward your firm by sharing my positive experience at every opportunity.

But how would a customer service employee know that about me if they haven’t had frequent interactions with me? And furthermore, what difference does it make?

The hard-edged, measurable results are that you will get more business. According to Gallup research, 23% more business to be exact, from me and from my referrals.

A few weeks ago, I needed to call customer service at a major financial services firm. Like many of you, I was dreading having to even make the call. Why? Long automated menu selection, not even having the option that I need to select, then having to figure out how to get a “live” person, and then going into another “queue” that informs me I am calling at a high volume time and my anticipated wait time is five plus minutes.

“Really?!”

Then, after the wait, I finally talk to a service person, only to get the wrong information. I had to call back two more times (and yes, go through the queue again) before I received the correct procedure.

I certainly shared my experience on the satisfaction survey I received the next day. I guess it is no surprise that no one has acknowledged the poor service or tried to assure me that they want me to have a better experience next time.

How many calls come into the typical customer service center on a daily basis? 1,000 plus! The way I see it, a firm gets 1,000 plus opportunities to build and strengthen client relationships.

If you are relying only on customer surveys to gain intelligence on how to create a unique customer experience rather than learning how to customize communication styles, you will be left behind by the competition.

To provide unique customer experiences from the very beginning, you need the right behavioral information at your fingertips. So bring the solution to your firm so you can say with confidence: we treat you like you’d treat you.

About the author:

Peggy Mengel – Senior Consultant, Human Behavior Solutions Advisor

Peggy Mengel has spent 30 years helping financial services firms build deeper, stronger and more trusting client and employee relationships. With an understanding people before numbers approach. Peggy helps you navigate the human differences in your business to create sustained success. Armed with behavioral intelligence, you will be able to attract and retain the right clients, empower your team for authentic productivity, and enjoy a 23% boost in revenues. Read more

Millennials and their Money- they are Savvier than you think.

Millennials and Their Money: They are Savvier Than You Think!

Companies are currently bending themselves out of shape in an effort to attract the 83.1 million Millennial [Source: 2015 U.S. Census Bureau] in the US to their offering or services. But what are they really doing to get to know Millennials as a group?

The Financial Services Industry could do well to recognize that Millennials are very specific about what they want from their Financial Advisors:

Millennials and their Money 1

Source: Millennials and Money Merryl Lynch

This survey highlights the importance of really understanding what Millennials want to do with their money, and what kind of relationship they want with their financial advisor.

The message: Get to know Millennials. Understanding the Millennials behavioral style will enable messaging to be targeted to the individual. Regardless of their age or generation – are the Millennials naturally spenders or savers, goal driven or content to build a balanced life, risk takers or cautious, trusting or skeptical etc.? Put another way, Millennials can be your “Millionaire Next Door” type who is frugal or that person who lives large, spending all they have in the belief tomorrow will take care of itself. There have been these types of people across all generations.

With this insight, find the most appropriate medium to converse with them. Revealing their behavioral style, core talents, and decision-making approach will ensure you get their attention if you translate that knowledge into a personalized offering. Remember, Millennials now represent the largest generation in the United States.

For every person, regardless of generation, there is always a lot going on below the surface that is motivating his or her life and financial behavior. Generally, these behaviors cannot be easily or quickly measured by human observation. This then makes it difficult to know how extreme and/or predictable the behavior will be.

A structured behavioral finance approach benefits both the advisor and the client by making the advisory process more tangible and robust. This is achieved by both the advisor and client participating in an objective financial behavior discovery process when the planning process starts.

A key point that financial advisors must always remember is that their behavioral style will influence how they perceive the investment markets, their clients, and the advice they give. Research studies show that advisors can have “Over-Confidence” and “Myopic Loss Aversion.” Therefore, advisors will have a behavioral bias that may influence their recommendations. This together with a population segment bias about Millennials, ensures the financial services industry will be unlikely to attract any new younger clients, regardless of demographic. In other words, do you already have a bias towards Millennials based on all the adverse publicity they are receiving? It’s a question worth asking and answering.

The Millennials are not dummies. According to a new survey undertaken by T. Rowe Price:

The 18 to 34 year-old set is better about tracking their spending and sticking to a budget than Baby Boomers. 75% track their expenses carefully. 76% of Millennials stick to a budget; 40% of Millennials have increased their 401(k) contributions in the past twelve months. Source: Millennial Investment Behavior.

Uncovering and understanding the behavioral style of Millennial clients and how they want to use their money allows the Financial Advisor to target their services more effectively. Harvard Business Review in their article “Stop Designing for Millennials” highlights the importance of understanding customer attitudes and behaviors:

Defining an ideal customer for a potential product or service using broader human themes allows you to create solutions that resonate with a larger group of people. ..Far too many companies take a “product-out” view of segmentation, where they essentially ask their customers to line up around their products by demographics such as age or income. They should take an “outside-in” view that orients its products around their customers’ attitudes and behaviors instead. Meeting the functional and emotional needs of a group of people is much more likely to generate transformative results than targeting a generational cohort with tenuous links. Source: Stop Designing for Millennials HBR

An example of this approach can be seen in the fall off of the banking system as we know it.

Almost all (88%) of Millennials do their banking online and half of those use their smartphone to do so. This experience leads about three-fourths of Millennials (73%) to be “more excited about a new offering in financial services from Google, Amazon, Apple, Paypal or Square” than from a nationwide bank. Since both the technology and the financial wherewithal to offer such services exists within these firms, the study’s prediction of “seismic” change in the near term future of banking appears to be at least a realistic vision of the future.” Source: “Millennials Invest More Time in Digital Banking,” emarketer.com, March 25, 2014.

As a financial advisor:

  1. You must learn how to communicate with Millennials on their unique terms defined by their behavioral style (regardless of the communication vehicle).
  2. If you know the Millennials behavioral style, then you know how to frame information to attract them.
  3. Get to know where your inherent bias and behavior sits. Then learn how to manage both.
  4. Stop reading Millennial-focused press clippings that cause undue bias or incorrect perceptions about them.
  5. Get to know the Millennials already in your world. That insight will be invaluable to what kind of an advisor you will be to your Millennial clients.
Know Your Client Communication Behavioral Finance

WTF DNA (Why Try Financial DNA)

So, you’ve decided that using a behavioral finance tool can help your practice. You have taken the trial, learned from the training how DNA Behavior’s tools work, and how to understand your different types of clients. Now comes the most important part: how do you implement these new tools into your office’s routine? Good financial advisor offices are like singers: they can all sing “Sittin’ on the Dock of the Bay,” but not all audiences will like the way certain singers add their twist on the song. Most good singers are able to read their audience and know when to change their tune. As a financial advisor, do you know how to read your audience and change your approach? That’s what we’re here to help you with.

Many of the questions we get revolve around wherein the client acquisition cycle the discovery process should be implemented. Several current clients of ours will not schedule a meeting with a new client until they have completed a Communication DNA Discovery. This happens for several reasons:

 

  • So they know best how to open the conversation with the new client
  • How you present to a Goal-Setter (get to the bottom line) is very different from how you would speak with a Stability person (Soften your tone)
  • Having this one key piece of information can be the difference in winning, or losing this client and offers an immediate differentiation from competitors

Let’s say, Charles, an advisor, just met with the new client and understands their preferred method of communication. What comes next? Before any talk of investments or portfolios comes into play, Charles must understand their natural tendencies. This is where his new client should complete the Financial DNA Natural Discovery process which really gets under the surface so he can truly understand what their goals are. But, Charles needs to understand a couple of key points before putting this in place. The first key is that he needs to commit to it. He must have a complete buy-in that is obvious to his clients. When they see how important it is, their buy-in will be that much easier and will simplify the rest of the process. The second key is that it needs to be early in the process. Charles needs to figure out if he can work with this prospective client so he’s not wasting his time with someone he won’t be able to please. Otherwise, if Charles doesn’t let them know how important this can be they will have a hard time completing it if he does not convince them that these tools are essential to the success of their relationship.

It is important to remember that the power of DNA Behavior’s tools is in the questions we give you to get the conversation going in the right direction. You will be able to naturally connect with 40% of the prospective clients that walk through your door. Will you be able to change your song to connect with the other 60%? The answer is now a simple YES.

Try Financial DNA for yourself today.

 

behavioral fnance

So You Think You Know Me? Here’s What You Missed

Do you think your sales team is connecting (i.e., maximizing revenue) with all the advisors in their territory? They might tell you they are but read on.

I’m very intuitive, said the wholesaler of a major asset management firm. Excellent, we should get along very well, I replied.

I was talking with a wholesaler who wanted to learn more about one of our behavioral solutions, Communication DNA.

The wholesaler’s goal was straightforward: Show me a solution that decreases the amount of time it takes me to get to know an advisor so trust can be built immediately.

The wholesaler was skeptical about what I was saying so we decided to do a test. We had been talking for 30-minutes (about the same amount of time you talk with an advisor) when the wholesaler suggested to me that he could already tell exactly what “type” of personality I was.

Game on, I said.

OK, here’s what I’ve gathered so far about you in the first 30-minutes:

  • Fun
  • Fast-paced
  • Very sociable and enjoys people
  • Likes to take the lead

So what did I miss? asked the wholesaler.

Just a few pieces of critical information that most sales people miss about me (and why they lose the sale):

  • I can be very fun but turn into a “driven, goal-oriented” individual, especially under stress. Do you think an advisor’s job contains any elements of stress? As a wholesaler, you could keep going down the fun path when I have taken a sharp right turn. If you are not with me, I may smile and act like I am listening, but I have totally disengaged.
  • Getting me to make a decision: Tell me stories about how you have helped others like me. Don’t try any other “closing technique.”
  • Trusting you? I am loyal beyond belief. But you need to prove yourself from both a competency level and people skills in equal amounts.
  • The amount of detail: Don’t confuse me with the facts. High- level first or I will not even listen or worse yet, cut you off. I will let you know how much and when I need details so follow my lead.

Now the wholesaler was ready to listen: How could I possibly get all this behavioral intelligence before an advisor even decides to do business with me?

You don’t have much time to create a good impression and to get an advisor to trust you. Find out how to become a behaviorally smart wholesaler. Your business success depends on it.

Robo Platforms Are Missing Personality

Robo-Advisor Platforms Are Missing Personality

In the last couple of years, Robo-advisor investment platforms have taken an important position in serving the middle and lower markets for financial planning. They are here to stay and should be encouraged. The question is does the Robo model for investments in its current format completely work? Like many new innovations, the problems are somewhat hidden when the markets are hidden. Where the Robo platform is completely stand-alone and totally independent of direct advisor input then the risks increase.

Then, also let’s consider what do investors want? Gallup research shows only 9% of investors want a completely automated service, and this is mainly the younger investor. Therefore, 91% of investors want some human input in their financial planning. Refer to the following research:
http://financialadvisoriq.com/c/1148733/123753/investors_want_both_humans_robo_advisors?referrer_module=emailMorningNews

The issue I see emerging for Robo platforms is that when there is a sharp and/or sustained correction downwards then there could be a mass exodus with a bloodbath of losses. After all, behavioral finance research shows us, people will, in varying degrees, make emotional decisions at the wrong time and follow the herd out of the market. Yes, the Robo platform may have many clients, but they will not be able to communicate with them when negative events happen. Similarly, there is no incentive for the Robo platform to communicate with investors as the market keeps going up and many get out of their comfort zone. In fact, the Robo is incentivized to keep having these people sign-up.

Overall, the structural problem for Robo platforms, as they currently stand, is that they do not know enough of the in-depth financial personality of the investor. The investor is served in a “one-size fits all” way based on a set of algorithms which have no relationship to who they are. The downsides are the Robo Platform does not know:

  1. How to communicate with each investor on their unique terms. Put another way, they do not know how to re-frame information so that it is understandable to the investor.
  2. The behavioral biases of each investor which will drive their decision-making (for instance to name a few, loss aversion, following the herd, taking a consolidated view, over trading).
  3. The correct risk profile which will influence portfolio allocation. Some of the Robo’s have a few questions that relate to risk and others make potentially false assumptions based on demographic data. Not all Millennial’s and Gen Y’s with a high income are risk-takers.

The Robo platform would be greatly strengthened if it had a validated financial personality discovery process incorporated into it. The ROI would be significant in the following areas:

  1. The ability to customize communications from the first point of engagement in the sign-up process. This would not help the initial sign-up process but also ongoing marketing.
  2. Enhance the capability to manage investor emotions in volatile markets.
  3. Provide a more robust framework for making suitable recommendations to meet compliance requirements and also monitor them.

Ultimately, a Robo investment platform will not be sustainable on a long-term basis if there are no mechanisms to “Know, Engage, and Grow” the investor clients. This means that there must be robust online solutions to discover the client’s financial personality and a place for human interaction. These elements can be incorporated on a cost-effective basis and to achieve scalability which is needed to bring financial planning to the masses in a safer way.