Tom Watson of IBM coined the expression, “Nothing happens until a sale is made.” The object of sales presentations is to get the prospect to say yes. You have a unique gift shared by fewer people than you might imagine: You have the ability to look someone in the eyes and ask them for money! How are you going to do that?
You were given plenty of sales training when you became a financial advisor. Let us assume you know the time-tested strategies for closing a sale. You read my earlier article, “Three Closing Strategies Beyond the Obvious.” Here are three others to consider.
Strategy #1: The Cost Of Waiting
We have all been there before. You present your recommendations. The prospect says. “Let me think about it. I will get back to you.” The sale often dies there. This strategy recognizes prices are changing all the time and there is a cost associated with waiting to make a decision.
The simplest way to make this point is to assume your prospect has cash on the sidelines earning a low interest rate. You have suggested buying several stocks. This involves buying a certain number of shares at that day’s price to build this portfolio. You keep track of those numbers, after the client says, “Let me think about it.”
You get back in touch. Perhaps it is a month later. What would the cost of the same amount of shares in each of those stock positions cost at today’s prices? The difference between the cost then and now is the cost of waiting. In fairness, you need to also take into account the change in value of the prospect’s current holdings. If they are in cash, it would be interest earned. When you offset that amount versus the cost to buy now, you have the cost of waiting.
This can be a big number! If the prospect was considering investing $500,000 and the difference between now and then is $50,000, that might be 1%, but it is not a small number. A 2023 Mercedes C Class sedan is in that range. The “cost of waiting” could be expressed as enough money to buy a cool car!
You are not saying: “I was right, and you were wrong,” but you are trying to make the case prices are heading in the right direction. This keeps the prospect still in prospect status, even if they didn’t agree the first time. Your follow up shows belief in your recommendations.
Strategy #2: Buying Into Each Other’s Ideas
I was presenting in Hawaii and invited by a corner office advisor to sit and talk. He explained he had a prospect, newly arrived from the mainland. He looked over all their holdings and would be meeting with them again soon. His recommendation would be to “sell everything” and buy his recommendations. I sensed trouble ahead.
Consider this from the prospect’s point of view. They have been successful in life to the extent they can afford to buy and live in Hawaii. An advisor who they never met before is going to tell them everything they bought previously is wrong. They need to sell everything and start over afresh. That could be a tough pill to swallow.
The strategy of “buying into each other’s ideas” involves developing a plan, then examining the prospect’s current holdings and finding a few currently held investments that fit into the new plan. Present your proposal and highlight the current holdings you want to incorporate into the new portfolio. Compliment them on making good choices and why they are a good fit. You might mention not only do you recommend keeping them, we should add to those positions!
You have created a security blanket for the prospect as they consider stepping into the unknown. They should be more agreeable to accepting your recommendations because several of their familiar holdings are retained. Even if they don’t not accept all your recommendations, they should be agreeable to adding to those positions.
This strategy shows the advisor has been listening. It helps build a foundation of trust and should generate “buy in” starting with the positions you would like to retain and increase.
Strategy #3: You Are Not Doing This For Yourself
Insurance has often been associated with peace of mind. An advisor in Northern California told me about this strategy, and I have remembered it for years.
The advisor would meet with both parties listed on the account, often husband and wife. As he delivered his proposal, he would explain the objective is not to simply make money or beat the stock market indexes. The objective is to provide for your family and children. (Already he has introduced legacy planning, assets that live beyond the client’s life.)
Most couples have one decision-maker with whom the advisor interacts on a regular basis. The advisor has been careful to get all named parties on the account together. They have put the decision-maker into an awkward position. Saying “no” to the advisor’s proposal equates to not wanting to provide for their family and children.
In his presentations, insurance might be part of the proposal. He would ask: “Do you want the $250,000 death benefit or the $500,000 death benefit?” On one occasion, before the decision-maker could speak, their spouse announced: “We will take the $500,000 death benefit!” The advisor picked up an ally during the presentation!
This strategy changes the rules of the relationship. It moves the conversation from performance to protection. It gets the prospect focused on a higher goal. When discussing investments, it’s an opportunity to introduce the family index concept, the return the client needs to achieve to reach their stated goal.
These are different strategies that can fit different closing situations.
Bryce Sanders is president of Perceptive Business Solutions Inc. He provides HNW client acquisition training for the financial services industry. His book Captivating the Wealthy Investor is available on Amazon.