The Number One Reason Prospects Will Reject You as Their Advisor
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Virtually all advisors have the technical competence to construct a plan that will help a prospect. But most make a key mistake when they try to explain that plan, and it almost always causes them to lose the business.
For example, Peter heard that every advisor should use the keep it simple stupid (KISS) principle to explain his plan. But there are many moving parts to a retirement plan. As a fiduciary, isn’t it important to fully explain all the aspects of any plan including the pros and cons?
Most prospective clients are concerned about five basic areas of retirement:
- Running out of money
- Market volatility
- The cost of catastrophic illness
Peter was compelled to fully inform his client about all the aspects any plan would cover. The client listened intently, nodded a few times and said, “These are great ideas. I will think about it and get back to you.” The advisor was sure the client would call back and implement the brilliant ideas he heard.
The reality was the client went radio silent in spite of five follow-up calls. What should Peter have done? Perhaps the plan was faulty. Was there competition Peter didn’t know about? The answer is simple.
There was too much information presented with too little engagement.
The limits of memory and attention
Most of us have an attention span of about 90 seconds. Think of your last webinar and how often you looked at your cell phone. One TV commercial showed basketball star Steph Curry driving while trying to remember what his wife asked him to buy on the way home. He hasn’t paid attention to the original request.
This is how your clients think.
Aside from an attention span shorter than a goldfish, memory is even worse. We forget 70% after one day and 90% after three days. As a grad student at the University of California at San Diego, we tested memory retention. One test entailed 10 random two-digit numbers given two seconds apart. The students weren’t allowed to write or rehearse the numbers. Some students recalled three correctly. Two subjects even remembered five. But after one hour, no student remembered more than one.
Your clients don’t remember much either. If you let them leave your office to think about your solutions, they will remember little of anything you presented. But there is a way you can not only get them to remember more, but also help clients make more cogent, well-thought-out decisions.
The 333 closing presentation strategy
I have discussed in other articles that most of us need three needs to make a decision. According to research, one need well addressed has a 36% closing ratio. Two needs will end in a close 56% of the time and three needs will get a client to say yes 92% of the time. So why not use this concept to present solutions you would like them to implement?
The steps are:
- Story, then trial close
The rest of the presentation is rinse and repeat. This process should be done three times during a meeting with a trial close at the end.
The trial close
Most advisors I have worked with in my coaching practice first present a concept for about 45 minutes. They expect the client to be so impressed they immediately ask to implement the solution. The truth is that most clients get confused and want to think about it. Trial closing is the answer. This is the process of gaining small agreements throughout the presentation without being manipulative.
The correct way to trial close is:
“Does this seem like the right approach so far?”
“Do you think this might work in your portfolio?”
“Am I on the right track?”
The wrong way to trial close is to say:
“If I can show you a solution that works, is there any reason we can’t do business together?”
“If I can give you a plan you like, will you hire me as your advisor?”
All of these are manipulative. They will push the client to be more guarded and defensive. You will lose trust and rapport. They will be less open and provide less candor.
The 333 presentation approach
“Mr. Jones, the first concern you had was avoiding running out of money. Your mom was 84 and left with only Social Security. You don’t want that to happen to you and your wife. Did I get that right?
The ideas I have to avoid running out of money is to make sure we separate retirement assets into long-term growth and mid-term asset protection. But, most importantly, we need to keep two years of assets in liquid investments. That way if the market goes down, we will have time to recover any losses over the long term. Do you have any questions about how this might work?
One of my clients, Don, just like you had his own construction business for 40 years. At 66, his body was wearing out and Don didn’t want to hire more workers producing even more headaches. He sold his business for $550,000 and wanted to travel and see his grandkids more often. His income needs were about $35,000 per year plus Social Security. We put $400,000 into long-term growth investments he wouldn’t touch for a few years. We then put $100,000 into investments that he wouldn’t need for at least two years and $50,000 in cash he could use when needed over the next one to two years.
We balanced the portfolio annually. After five years, it has grown substantially. It’s important to be flexible because there are always unforeseen needs and emergencies. But if we can stick to this plan, we can work to make sure you will never run out of money.
Does this seem like this plan might work to make sure you also don’t run out of money?
Putting it all together
The next step is to present need number two and then follow the same steps. After three needs are presented, all that is required is one last trial close.
“Does this whole approach seem like the right was to go?”
“Do you think all of this will work in your portfolio?”
The prospective client has agreed to three trial closes at this point. There is no way they will walk away at the end. Your brilliance and vast experience never has and never will create sales. It is the engagement you gain with trial closes that causes clients to implement your ideas. It’s the stories that cause clients to emotionally feel the solution that puts a plan into action. It’s addressing only three needs that keeps it simple enough to prevent you from overselling.
If you use the 333 closing presentation approach, you will close 35-50% more business overnight.
Write me at [email protected] or call 714-368-3650. After a 10-minute discussion about your practice, I will send you the exact wording and even a video on how to “Trial Close”.
Dr. Kerry Johnson is “America’s Business Psychologist”. He is the best-selling author of 14 books and a frequent speaker at financial conferences around the world. Peak Performance Coaching, his one on one coaching program, promises to increase your business by 80% in 8 weeks. To see if you are a candidate for this fast track system, click on www.KerryJohnson.com/coaching and take a free evaluation test. You will learn about your strengths and what is holding you back. Or call, 714-368-3650 for more information.