Sales is a strange topic for RIA fiduciaries. It almost cuts against the grain of everything they believe in.

Only one in nine Americans actually works in sales. But that understates its importance, Harvard professor Daniel Pink told attendees this week at the annual Schwab Impact conference in Washington. When asked how they spend their time, the average American worker says they spend 40 percent of their time trying to persuade others to do something or understand their viewpoint.

RIAs spend a great deal of time trying to convince clients to take actions in their best interest, Pink noted. In reality, they are selling, even though “the cash register isn’t ringing.”

“Like it or not, we are all in sales,” Pink said. Many professionals, however, fall distinctly into the “or not” category.

Pink cited a study of 7,000 Americans who were asked the first word they associate with sales. Among them were pushy, sleazy, hard, car, annoying, smarmy, dishonest, slimy and manipulative.

“Even smarmy makes the top list,” Pink joked. “Smarmy should never make any top 25 list.”

Only five of the top 25 words associated with sales were positive, including challenging, necessary and fun.

These results reflect ordinary Americans’ experience as buyers of products in a world of information asymmetry. But in the last two decades as information availability has proliferated, the world has changed, allowing buyers to put sellers on the defensive.

In financial services, information is ubiquitous. It used to be “Buyer Beware;” now it’s “Seller Beware,” Pink said.

So how can RIAs be more effective in sales?
 
1. Increase your effectiveness by briefly reducing your own feelings of power. Take the perspective of the client, Pink said. Reassess and recalibrate the context of the discussion so you are not the important one. More powerful people tend to be less capable when it comes to seeing other people’s perspective. Act powerless.

2. Use your head as much as your heart. Interestingly, this also happens to square perfectly with the definition of fiduciary duty. What do you think is more important to sales effectiveness? Imagining what the other side is feeling or imagining what they are thinking? Pink said extensive research shows that correctly imagining what they are thinking is actually more important.

3. Who is better at sales, extroverts or introverts? Everyone thinks it would be extroverts and they are the ones who typically get hired for sales jobs. But the correct answer is neither. Extreme extroverts perform only slightly better than extreme introverts. Ambiverts do much better, according to tests Pink cited. Ambiverts “can go right, they can go left, they know when to speak up and they know when to shut up,” Pink said. Strong extroverts don’t listen and tend to be pushy like the caricatured used car salesmen everyone ridicules and despises. In a test of how they performed, extreme introverts scored 120, while extreme extroverts got only 125 points. In contrast, ambiverts tallied 155.

4. Use persuasion with a question. Asking a question forces you and the client to engage each other, think and respond. If done correctly, clients will find their own reasons for agreeing with you. The classic example of a question that swayed millions of Americans came in a presidential debate in 1980 when Ronald Reagan stood next to Jimmy Carter and asked Americans, “Are you better off than you were four years ago?” In the fall of 1980, Americans faced double-digit inflation and interest rates, 8 percent unemployment and long gas lines. Though things weren’t great in 1976, they were a lot better. Mitt Romney tried the same line only once in a 2012 presidential debate and it flopped. He never used it again, Pink noted. Why? Though the economy was stuck in an anemic recovery with 7.5 percent unemployment and adding a meager 150,000 jobs a month while wages were stagnating in October 2012, the question made people look back to the fall of 2008, when 750,000 jobs were being lost every month, banks were folding as the financial system was collapsing and the stock market was in the middle of a 50 percent bear market. Bad times are all relative. Pink’s point was that when the facts are not clearly on your side, “get some new facts.”

5. Use specifics, avoid generalities. Context is important. Make decisions easy for people rather than trying to change their minds. Give people an off-ramp, like automatic 401(k) enrollment plans, which Pink called the most successful sales strategy in the financial services business in a long time. He cited the results of a general vs. specific letter in a charity’s fund-raising drive. Within the mailing, the senders singled out some recipients as most likely to contribute and others as least likely. Among the recipients who got a general letter, 8 percent of those considered most likely to contribute did so, while 0 percent of those deemed least likely did. When a specific letter was sent to people in the same two groups, the contributions rose to 44 percent and 25 percent, respectively. Professionals who are leaders trying to persuade should try to serve first and sell next, Pink said. It’s called servant leadership and involves turning the traditional pyramid upside down. But it’s a better way to do business and it creates a better world.