If you’re giving clients and prospects too many choices, they may freeze and not make any decisions because they don’t understand the differences in the choices. They then may pick none, meaning there is no sale. To overcome this, simplify the process for clients.
How it works
Suppose a prospect came to you and said, “I sold my house, and I need income. What do you suggest?”
You want to be seen as someone with expertise, so you tell them about bank CDs and annuities. You mention three varieties of bonds: corporate, municipal and government. You then go on to talk about dividend-paying stocks, such as utilities. You mention these stocks and bonds can be bought separately, in mutual funds, ETF and managed money formats. You have given them so many possible options that their head is spinning! How can they decide?
What does simplifying mean in this example? Go back to what the prospect asked, which was, “What do you suggest?” They didn’t say, “Tell me every option, good and bad, you can think of.”
Your expertise is shown by quality, not quantity. Instead, say to your client, “There are many possible solutions, but in my opinion based on your situation, (this one) is the solution I recommend.”
You’ve now shown your skill in simplifying, which is evaluating the options and recommending one.
Simplifying also means keeping the client comfortable while you are presenting. This may include the following:
- Respect their understanding. Your familiarity with municipal bonds and mutual funds can make it easy to talk in jargon. Don’t assume the client knows what you are talking about though. You might say, “I know you are familiar with mutual funds, but I just wanted to review the basics for a minute or so.” They might not know and don’t want to admit it. They appreciate you spelling it out.
- Trial closes. You might want to say, “Are you following me?” It’s gentler than saying, “Does that make sense to you?”
- Introducing a new product. This is an opportunity to say, “This problem exists or came up recently. People did not have a solution before, and our firm (or the industry) designed this product to meet this specific need.” It’s like identifying a problem and finding a solution.
- Use road maps. We are trying to get from Point A to Point Z. Point A might be the prospect’s financial situation now and Point Z might be retirement. You explain you are following this route. You stop for more gas along the route. This is when the client is adding money annually. You work in periodic reviews as car inspections or checkups.
- Use analogies. There are plenty of opportunities to use this approach. When explaining stock commissions, I use the example of buying wine at the store. You pay the cashier the listed price plus sales tax. Your commission is like sales tax, a charge that is added on.
- Ask questions for them. You might insert a question by saying, “People often ask …”. You then answer the question. It might have been something on the client’s mind, but they couldn’t put it into words and it’s bothering them.
- Periodic reviews. Financial services firms today provide advisors with great tools to produce excellent reports that include all the necessary disclaimers and legal language. These can make the reports big and confusing though. While you want to be able to review this in detail and answer questions, it can overwhelm clients. Instead, first offer the simplified version of “This is where you started (date). This is where you are now (date). This is how much you added. This is how much you took out. This is what your return was.” You can go into detail later but give them the bottom line, which is what most clients want to know.
- Talk in dollars, not percentages. People understand percentages, but it’s abstract. They know what dollars are. They can count them and theoretically hold them in their hands. Clients understand numbers and performance better when you say, “We made this much” and talk in dollars.
With these tips, you’re not talking down to someone. You are turning complex subjects into easy-to-understand segments, therefore making it easier for clients to buy the financial products and services they need from you.
Bryce Sanders is president of Perceptive Business Solutions Inc. His book “Captivating the Wealthy Investor” is available on Amazon.
For more ideas about effective and easy-to-understand client communication
- Read “Simple talk”
- Watch “Why objections really are questions” (MDRT member exclusive)
- Watch “Guiding clients to requesting life insurance”
