by Ryan H. Law
Imagine you are on a plane and someone sits down next to you. They say, “Hey – I’ve got something interesting to show you” and they proceed to pull out a flipchart that shows stats about people in their church.
Their flipchart shows that people in their church have half as much cancer, 35% less heart disease, they live 5-6 years longer than others, have a lower divorce rate, and a higher happiness rate.
Then they say to you, “Isn’t that interesting? Do you want to join my church?”
While you might find these facts interesting, I doubt you are going to say, “Sure! Sign me up.” Most people would say something like, “Oh – no thanks,” then quickly try to change the subject (or get a different seat if they persisted).
I served as a missionary for my church when I was 19 years old, and I assure you that we did not do missionary work this way. The numbers above are actually true for members of my church, but never, in my two years of service, did I share those numbers, because numbers don’t convince anyone.
What did I do instead? I shared my story, I shared my church’s story, I spent time building on common ground and building trust, and I helped people make and keep commitments.
However, when I started in the financial services business I put together a binder with about 20 charts showing various numbers that I would pull out during every appointment. I had charts that showed the average return of the market, past returns for the main funds we used, the colorful chart that showed which asset classes outperformed others over the years, what happened if you missed the 10 best days in the market and more.
The fund prospectuses and brochures I would show clients were also full of numbers – past returns, alpha, beta, and standard deviation, to name just a few.
I was sure that all of these numbers showed absolute proof that people should work with us.
As financial planners, many of us are convinced that if we just show people the right numbers they will see our brilliance and be convinced that they need to work with us.
It doesn’t work.
Alpha, beta, standard deviation, past returns, and other numbers will not convince most people, just like numbers wouldn’t convince you to join a church.
Walter Chen of DataHero1 said, “The reality is that our decisions are not driven by data, they are informed by data and based on several variables beyond data, including…intuition, past experiences, judgement and context.”
Notice Chen’s wording, “informed by data.” Our decisions are informed by data, not driven by data. In fact, according to Harvard Business School professor Gerald Zaltman, 95% of our purchase decisions take place unconsciously2. Decisions made unconsciously are not driven by data.
Michael D. Harris on Harvard Business Review3 said, “I’d argue that too often, selling to Mr. Rational leads to analysis paralysis, especially for complex products or services.”
Let’s be honest – financial services are complex products and services. There are a lot of moving parts – goals, present needs, college planning, retirement, tax considerations, asset allocation, diversification, estate planning, and more.
If we appeal to the rational brain only, we won’t make that connection with the client that we need. Financial services and working with clients should be informed by data (numbers), not be driven by data.
Behavioral Psychologist Susan Weinschenk4 said, “…if you want to really reach people, if you want to communicate with them, if you want to persuade them, you need to figure out how to talk to the unconscious part of their mind.”
How do we “talk to the unconscious part of their mind?”
Let’s go back to Michael D. Harris on Harvard Business Review:
“If you want to influence how a customer feels about your product, provide an experience that creates the desired emotion. One of the best ways for a customer to experience your complex product is by sharing a vivid customer story. Research has shown that stories can activate the region of the brain that processes sights, sounds, tastes, and movement. Contrast this approach to a salesperson delivering a data dump in the form of an 85-slide power point presentation.”
Get rid of your 85-slide power point presentation and focus on stories.
Contrast these two examples:
- Rob tries to sell life insurance by talking about insurability, the lower cost of buying when you are younger, the differences between term and whole life, and numbers showing probability of dying at various ages. Rob uses logic and tries to appeal to the rational brain. Rob’s practice is driven by data.
- Susan also sells life insurance, but she shares client stories. One story is about a client who wanted to “think about it” and got killed in an accident on vacation. His wife and children were left destitute and, in addition to grieving, lost their home. Another story is about a client who purchased insurance at a young age and ended up becoming uninsurable a few years later. Susan is appealing to emotion and the unconscious part of the mind by telling client stories.
Susan eventually needs to use data (numbers) to sell the insurance, but her clients will be informed by data, not driven by it. The unconscious mind will have made a decision based on client stories that speak to a desired emotional state.
Is Susan being manipulative by sharing stories that evoke emotions?
Harvard Business professor Gerald Zaltman, who has studied and written in depth about using emotion to reach customers, was asked this same question. Here is his response, “All knowledge can be used in constructive, socially responsible ways just as it can be used harmfully…If we want the opportunity to use knowledge to benefit consumers we should not shy away from learning more about the inner workings of the human mind. This also runs the risk that some people might use that same knowledge in ways we consider inappropriate2.”
If Susan believes in what she is selling and acts as a fiduciary, then she is not being manipulative.
I eventually threw away my binder with all those charts, and I started to think about financial services like my missionary service. Just like I did when I was a missionary, I focused on sharing my story, learning their story, spending time building on common ground and building trust, and helping people make and keep commitments.
All of these things speak to the heart, or emotions, of the client. It’s how we build trust and establish a connection.
- Write down a story that relates to one of the products or services you are selling. I keep a “Story” notebook on Evernote where I keep track of stories. Writing them down makes it more likely you will remember it and use it.
References and Resources:
(1) The Science Behind Gut Feelings and Making Data-Driven Decisions
(2) How Customers Think – The Subconscious Mind of the Consumer (And How To Reach It)
(3) When to Sell with Facts and Figures, and When to Appeal to Emotions
(4) The unconscious, emotions, and our decision-making process
Images in this post are licensed by Ingram Image – Stock Photo Secrets (AFF)