We’re all in the business of selling. If you don’t think so, recall the words of Robert Louis Stevenson, author of the classic “Treasure Island.” He said: “Everyone lives by selling something.” Now let’s look at the other side of that: Why do people buy?
People buy for plenty of reasons. As a financial professional, you want to recognize these motivations.
1. They have a need. This is basic. They’re out of milk, so they drive to the store and buy more milk. In insurance terms, they live in the U.S. and are turning age 65. They will be eligible for Medicare, yet they will want to buy supplemental insurance too.
Strategy: Does your client or prospect know you sell the product or service they want? If not, you must let them know the range of your services and how you can help them.
2. You showed them a need. This describes your day very well. You meet with a prospect. You learn about them. The information they provide uncovers a need. Fortunately, you are in the position to provide a solution to their need.
Strategy: Once a need is identified, it doesn’t go away until the need is met. They might not buy at that moment, but they are still a prospect until they buy from someone.
3. They were prospected. This describes another part of your day very well. Your client comes in and says: “A guy just called me and told me about annuities. It sounds good, and I’m going to buy one. I wanted to talk with you first.” They didn’t know they had a need until a third party entered the picture and told them. In this case, you were fortunate your client asked your opinion before buying from someone else.
Strategy: Financial planning enters the picture. You identify immediate and future needs with your clients. When someone else calls, they can say: “My financial advisor already told me. We have a plan for that.”
4. The purchase is part of a plan. Your client is buying because you worked together to develop that financial plan at the start of the relationship. If you created a plan, identified 10 needs and said, “Let’s talk about each one and get them all done today,” you would scare them off! The plan is a road map.
Strategy: You work with your client to prioritize the needs identified in the financial plan. You set up a series of meetings to sequentially address each need in order. This way your client feels they are making progress yet aren’t overwhelmed.
5. Someone bought the same thing. This happens more often with stocks or other investments than with insurance. Your client calls and says, “My friend just bought gold, so I’m buying it too.” You ask the rationale for why they are buying gold. The answer is simply, “She did it, so I’m doing it too.”
Strategy: Bear in mind, it’s their money. However, you might draw them out, explain everyone’s situation is different and perhaps reach a compromise.
6. Someone sent them. This is similar to the previous example but with a positive aspect. The prospect contacts you, explaining a close friend (your client) in similar circumstances just bought life insurance and recommended they do the same. It’s a referral situation.
Strategy: You want to treat each prospect as a unique individual. Assuming the circumstances are similar, life insurance is a good fit for them. Assuming it’s within the rules, you thank your client for having sent their friend in your direction.
7. The item is in short supply. This happens over the holidays when the hottest toys fly off the shelves. People buy because the item is in short supply.
Strategy: Within the insurance world, the company issuing the product might be changing it’s rate at the beginning of the next month. Business written before the cutoff date gets the current, better rate. It’s a motivating factor.
8. They want the newest of everything. There are people who stand in line to get the newest phone the day it comes out. Their old phone works just fine; however, they like the status of having the latest and greatest.
Strategy: It’s important the product fits within their overall strategy. Your firm doesn’t just dream up new products and put them on the market. They do extensive research to identify a need, then develop a specific product to meet that need. You show your client the new product because it would be a good fit. They’re thrilled.
9. It’s a requirement. They are buying because they have to buy. They just bought their first car. They need auto insurance because it’s a requirement.
Strategy: They need to understand you can help satisfy this need. You can make it easy because your agency also provides auto insurance.
10. They have been putting it off. We’re back to the client having a need. Their house might need a new roof. They don’t want to spend the money, so they put off the project. They bring in other experts. Everyone says they need a new roof. They eventually buy a roof.
Strategy: Assuming product pricing is similar, they may come back to the original person who identified the need. Why? Because everyone else they consulted validated the recommendation you made when you first met.
There are many reasons people buy. Understanding their motivation may help you make the sale.
Bryce Sanders is president of Perceptive Business Solutions Inc. His book “Captivating the Wealthy Investor” is available on Amazon.
Find more ideas about overcoming sales obstacles:
- “Why prospects don’t make decisions”(MDRT members only)
- “9 easy ways to explain complicated topics and show value”(MDRT members only)
- “Helping clients make their own realizations” (MDRT members only)