Behavioral Marketing

Managing The Rise In Clients Non-Financial Issues

Pull Up The Couch For Your Next Financial Client

According to David Dubofsky, Ph.D., CFA, and Lyle Sussman, Ph.D. in their study, “The Changing Role of the Financial Planner Part 1: From Financial Analytics to Coaching and Life Planning”, approximately 25% percent of the financial advisor’s contact with clients is devoted to non-financial issues. About 74% percent of planners estimate that the amount of time they are spending on these issues has increased over the last five years. Source

There is mounting evidence to show that financial advisors indeed have to radically change their approach to the way they relate to investors.

Money has always been a ‘touchy’ ‘emotional’ subject. Whether discussions resolve around – making it, losing it, sharing it, incorrectly quoting about it i.e. “money is the root of all evil” when the correct quote is, “For the love of money is a root of all kinds of evil.” Timothy 6:10 – the topic can become toxic.

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Why then are we surprised (as I was) to find financial therapists popping up in our world? Or why do we think that financial advisors need to know all about our life and emotional state like a doctor? Is it unlike the mechanic that inquires about our driving habits as part of diagnosing a problem, or advising if those squeaky brakes need to be changed sooner than later? In that case, we’ve surrounded ourselves with all sorts of professionals and experts, acting as doctors and therapists to help us along in meeting our daily needs and lifelong goals.

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Source Photographer: Josh Dickinson

Well, it’s actually quite simple really: the majority of us have no idea what triggers we inherently have that govern the way we manage our finances. We would be alarmed to know we have inherent behavioral biases. We would cringe at the thought of having allowed the bankruptcy our grandparents suffered to dictate the ugliness with which we now accumulate and “store” our wealth.

But take heart these triggers can be revealed, they can be managed and we can work with our financial advisors to develop plans to create wealth that line up with our life goals and values.

In his book Behaviorally Smart Financial Planning: Behavioral Finance Made Practical for Advisors’ Hugh Massie makes the following comment, “Observations and traditional risk profiles don’t get below the surface where much about investor behavior is hidden. Financial advisors should know how to uncover what is happening as investors think through’ decisions.”

The truth is financial advisors need to know how to uncover what lies below the surface of our decision making. They need to know what historical events impact our view of creating/managing wealth. So yes, they do have to approach the advisor/investor relationship a bit differently today. But here’s the good news, they don’t have to spend 8 years or so studying to become a doctor.

The right tools and training for uncovering our core natural behavior is the key. For example, DNA Behavior International has a significant discovery platform called Financial DNA that reliably discovers all dimensions of an investor’s financial personality and inherent bias for making life and financial decisions. The discovery process is fast and accurate and places vital information in the hands of financial advisors before the first meeting with their investor clients.

Investors need an advisor who can guide them towards making informed decisions, one who speaks to them in a style that’s easily relatable while mitigating emotional, kneejerk responses. Emotion plays a significant role in so many parts of our lives that having an investor to coach us through the feelings and reactions, and keep decision making on the right track is necessary.

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Source

Financial advisors must understand their clients at a deeper level. It is essential to have a practical understanding of the psychology, emotions and biases that significantly influence investor’s imperfect decision-making patterns. Furthermore, advisors should understand how to recognize and manage their own biases when working with investors.

Ultimately, it is fair to say that the role of the financial advisor has changed, and will continue to do so. But there is no doubt that with a reputable and appropriate process, advisors can be well informed in advance of a first investor meeting.

Conversations around money will always be complex. While we talk more freely about other intimate subjects, when money enters the conversation, emotion, distorted stories, ego, and even fear enter right along with it.

In conclusion, if we understand our financial behavior then we can balance our emotions and beliefs. We will act more wisely with our money. Conversely, if we lack understanding and are confused about why we make certain decisions, then the decisions will be poor, creating financial chaos and discontent. Advisors need to be fully equipped and prepared to unravel investor’s complex issues around money. Investors need to be able to trust advisors in order to reveal information.

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How Do I Get People to Listen to Me?

Do you understand the words that are coming out of my mouth?

1998 Rush Hour movie starring Jackie Chan and Chris Tucker

How many times have you been in a situation where you were trying to communicate with someone and it felt you might as well have been talking to the wall? I remember explaining a concept to a client using a PowerPoint and the client didn’t hear a word I said because he was focused on how he didn’t like the color scheme on the slide.

60% of communications fail because communication styles and preferences are not aligned. Based upon 1999 Stanford Research study.

Our brains are hard-wired to process information and learn a certain way. Most people accept this by now due to the volume of research on the topic. However, we can learn how to adapt to different communication styles to increase our effectiveness.

Sales increased 17% just by a salesperson mimicking the communication style of a potential customer. Harvard Business Review

Our research has identified that most people have one of 4 primary communication styles: Goal-Setting, Lifestyle, Stability and Information. There is a lot you can learn about people and how their brain processes information:

  • Learning Style
  • Communication Preferences
  • Information needs for Decision-making

Iceberg picture

With this knowledge, you can make some simple adjustments to how you approach a person to help them absorb the information, understand why your communicating and ensure they take away the points you feel are important (the ability to influence them.)

8 Simple Tips to Adapt Your Communication Style for Others:

If you are interacting with a Goal-Setter primary communication type:

1. Start with the End Goal in Mind – What is the purpose of the interaction and how does it connect to your audience’s goal (what’s in it for them?) Use bullets and executive summaries to convey more information with fewer words. Details can be provided after the summary if needed, but Goal-setters don’t read long emails/blogs or sit through long presentations.

2. Provide Options – If you only give them one recommendation or option, you will most likely get pushback or a “no.” They want to be able to make a choice. They will likely want to discuss it.

If you are interacting with a Lifestyle primary communication type:

3. Explain Who is Involved -Being more relationship-focused, their brains first have to understand who is involved, their role, how they fit into the discussion and what they may think about it. They also respond well to social events and informal communication methods.

4. Use Visuals – Rather than send a long email or written instructions use a picture, infographic or demo to better help their brains process the information and retain it. They need to experience it to learn.

If you are interacting with a Stability primary communication type:

5. How You Say It Matters – The right tone is especially important for this group. They prefer supportive and low-risk interactions and solutions. Email may not be the best choice, but if you do send an email, be very careful to consider them as a person and how they might perceive it or “feel” about it.

6. Slow Down and Reassure – They like to be thorough and appreciate step-by-step instructions. They want to be very comfortable and sure of their actions before they act.

If you are interacting with an Information primary communication type:

7. Stick to the facts – They prefer to primarily focus on tasks/results and do not necessarily want a lot of social interactions. They tend to be logical, want to “get to the truth,” and understand “why,” therefore, they are more comfortable when they have more details, information, and research.

8. Don’t Try Appealing to their Emotional Side – I repeat, stick to the facts, policies and procedures, and the logical explanation. If you try to sway them with name-dropping, leverage office politics, oversell a concept with marketing hype or appeal to their emotional side, you will actually repel them, not influence them.

What’s your communication style? For more information on the research, how it works, or how to apply this knowledge, contact inquiries@dnabehavior.com.

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The Missing Piece of Client Engagement

No one said it would be easy.? Our inboxes and phones are overloaded with emails, texts and voicemails. Our to do lists have grown exponentially.

So how do you create a compelling message to capture advisors attention in less than 30 seconds?

Todays advisor wants you to:

  • Know their business: what their challenges are and how to solve them
  • Communicate on their terms: understand them at a deeper level to engage them

But heres your challenge.? You can know their business but if you dont communicate your message in the advisors style, your message is lost. Translation: NO SALE.

Lets look at an example.

Paul Roth is a top advisor and you have the perfect annuity for him to add to his clients portfolio.? His communication style is Lifestyle which means he likes the big picture, enjoys being around people, talkative and always upbeat.

Your marketing department just emailed him The Top 10 Best Annuities (of course, your annuity is #1). Paul opens the email and all he sees are your logo and lots of words.? He immediately deletes it. Why? He prefers bullet points and pictures.? All of your cleverly crafted words and details of your #1 ranked annuity did not even register with him!

Your internal sales desk is part of this campaign so shortly after the email is delivered, they begin making the calls to get advisors educated and excited about this product.? Paul is in Rons territory, so he jumps on the phone to Paul.? He takes the call because he knows Ron and your firm.? Rons communication style is Information so she starts the conversation by giving Paul all the pertinent facts and is proud of it because he knows the advisors business!

What he doesnt know is that Paul stopped listening within a minute.? Why?? Because Paul wants someone to set the big picture context first and then talk about how other advisors are using it. ?Details of the product offering are secondary to Paul so hewilleither ask the questions later or look it up online.? But Paul is polite, thanks Ron for calling and ends the call. Ron feels positive about the call and he continues on with the rest of his calls with the same script.

Now lets move to the other integral part of this campaign: the external wholesaler.? Luckily, Jennifers communication style is Lifestyle so she presents the annuity to Paul in exactly the way that appeals to Paul. He now understands the annuity, how it differs from the competitors and how to position it in the clients portfolio. SALE IS MADE!

But what if Jennifer wasnt the same communication style?? The three-pronged marketing campaign to promote your #1 ranked annuity would fail on more than half of the advisors. Not because you dont have a good product but simply because you havent customized your message.

Still thinking the soft side of big data doesnt produce revenue?

Maybe now is the time to take a look at a behavioral marketing system that can make a big difference in the effectiveness of your marketing campaigns.

 

Do You Really Know What Lies Beneath the Surface of Your Clients?

7 to 17 seconds. According to many research studies that is how long it takes to form a first impression.

This first impression is based 55 percent on appearance, 7 percent on the words we use during course of our conversation and 38 percent on the tone of the voice.

So even before you get sufficient time to demonstrate your abilities, prospects and clients have formed their first impression and created labels (serious, fun, blunt, friendly, etc.) about your personality.

customer behavior discovery, who are your customers, understanding customer personalitiesThe same is true for you as you meet prospects and clients.

Why is it so important for you to prove (or disprove) these first impressions to understand who your customer really is deep beneath the surface?

Because it has major implications for three areas of your business:
1.?? ?Attracting new clients
2.?? ?Designing portfolios
3.?? ?Ongoing service

Attracting new clients is all about the ability for you to quickly build trust. This involves understanding not only your clients personality, but your own personality strengths and struggles.? Are you a natural listener?? Are you empathetic or more focused on outcomes?? If your style is matched with the prospects, you will build trust with less effort.

When designing a portfolio, many advisors neglect to plan for the financial personality risks. Some clients will envision themselves as bigger risk takers than what they project themselves to be with you.? Or, they may say they are a saver when their expense account proves the contrary.? Discussions on these subjects are very delicate because many clients do not want to admit (or even know) who they really are a deeper level.

Finally, how can you customize your client experience when you may not even know who your customer really is beneath the surface?? You have a lot of different personalities working with you in your office and each one may have to adjust their style to make the client feel truly cared for and understood.? Every marketing action should be tailored to the personality of your clients.? No need to send a long newsletter filled with market data and facts to your big picture clients.? Are you looking for more referrals?? Certain types of clients are much more likely to give them to you if you know their personality.

Is there a way you can know a customer within the first meeting, or even better beforehand?? Or, do you need to wait a year to observe whether their actions and words match to find out who they really are?

Dare to get beneath the surface with your clients. Discover practical and actionable behavioral solutions that you can use with your clients to uncover who they are to create unique customized experiences.

Learn more by visiting http://www.financialdna.com

Customer Engagement Planning with your Head in the Cloud

As the year ends and plans are in place for 2013 many companies will have focused heavily on where social media fits in their business and more importantly produced endless statistics to support (or not) reasons to invest in more social media stuff. The CMOs will be all for it; the CFO will only be interested in ROI; the CTOs will have their exclusive opinions.

Customer Engagement

I wonder where the strategic conversations will turn to How can we attract and/or retain customers?

By now the majority of companies will have some elements of a social media some of which will be integrated with their CRM. But what actually needs to shift significantly to effectively engage customers for the long term lies not in the whizziness of the latest social media investment but more importantly in getting to know your customers communication style and matching service, advisors, product to them.

Social media is changing customer loyalty; suddenly customers have access to faster, wider rages of choices than ever before. Having the ability to track customers behaviors and their preferred communication style could be the difference between keeping and losing a customer.

Click here to see how you can get ahead of the game.