A question I have been mulling over – ‘is financial advice negative or positive’ – or is it aimed to create negative feelings, then solve them with overly positive predictions or scenarios, or actually, should it be to create positive feelings, then stay sensibly grounded, aware of what could happen (negative scenarios)?
Step 1. Create a Negative Future
Have you heard of the SPIN sale technique – hugely popular in Lloyds bank in the 2000’s the selling circle posed a few Situation questions to :
“ …minimize the small talk and focus on finding background detail that can be used to make sense of the buyer’s business situation. Context creates meaning. This is about understanding the wider context before you zoom into the details. ”
Then on to the Problem questions – to uncover a selling angle :
“Ask questions to uncover problems which your product can address…If you are selling life insurance, ask about how many dependents the person has…”
Then the pain – the Implication questions :
“..the goal is now to get them to see (and feel!) the problem. By asking questions which draw out the implications of the problem, they get to feel the pain that will drive them towards your product. This is the ‘hurt’ of Hurt and Rescue.”
Finally, as a saviour the Needs Pay Off questions :
“Having hurt the target person with your implications, you now give them a straw to grasp at by asking how their pain could be resolved. With careful questions, you can get them to the state where they are asking for your product even before you show it to them. This is a very neat ‘rescue’ of Hurt and Rescue, where they either rescue themselves or ask you to rescue them.”
The whole purpose of this, and still many approaches which exist today is to put the client (as they refer to as a target) in pain, to make them feel hugely negative and uncomfortable about life and the future, really twisting the knife when it hurts most. The secret we were told (and I saw a classic example of this by my trainer in the Bank after a few lunch-time beers) is to reduce them to painful tears, then keep going, so they will sign anything you put in front of them. Hurt and Rescue – how absolutely shameful that thousands of sales people expose their clients to this and other similar strategies each day (probably after driving to the appointment playing a CD telling them they are a tiger!). Don’t laugh, many mainstream approaches today, whilst not quite as extreme anymore, still very closely follow this pattern – make them feel bad, then save them!
Step 2. Promise the Earth
Having turned the customer into a blubbing wreck, not only can the problem which has been manufactured to an extreme example be solved, but solved with the most wonderful of products. Investments which always go up ‘it may waiver from time to time, but look here at last year’s performance – that’s what it says on the sheet’, wonderfully complex products with glossy brochures which seem too good to be true, but it has a London address and a picture of the Gherkin, so must be OK, or perhaps an insurance which pays out if you stub your toe on the bath?
So now, we have taken the client from the edge of despair, to having the most wonderful, overly positive product in the world – maybe something which gives you life cover, then, at the end of the mortgage, will repay it, and give you enough extra for a world cruise? – hang on, that was the endowment patter. How about something which never drops in value, grows every year, and you can get your hands on all your money early if you want – oops – that was With Profit Bonds (which were subject to some bonuses being withdrawn, reduced, and a Market Value reduction of 25% sometimes being applied)?
The poor client becomes an emotional wreck, is Rescued with the wonderful product, only to find years into the distance, that they didn’t really know why the bought it, nor did it meet their real aims, probably ended up wasting a load of money, and getting further away from their true aspirations. So we had an overly Negative experience, an overly positive solution, then a negative outcome at the very end. But hey, at least we hit our sales target!
How about something very different?
How about making the client feel good, listened to, positive about life and their future ? How about working for the client – after all, they are the ones who ultimately pay us!
It’s not for everyone (although there is no reason why this should be the case), but Financial Life Planning aims to do just this – focus on the client (the right way), listen to them, create a positive future – without talking products, allow them to dream rather than have nightmares and being fearful.
What, if, instead of SPIN®, we used EVOKE®?
E – Exploration – to listen to the client and understand their issues, concerns and aspirations
V – Vision – after 2 meetings, to paint a picture with the client of their future, one full of positive outcomes, fulfilling what they truly want
O – Obstacles – a meeting dedicated to dealing with things which may get in the way – not making them feel terrible, but helping them work through the obstacles towards the future
K – Knowledge – working with the client to build a robust financial plan for the future – using Financial Scenario Modelling, to show not just the positive future, but also the impact of market down turns, and crisis such as the Credit Crunch.
E – Execution – putting an agreed plan into place, where the client understands what they are doing and why they are doing it – all with the knowledge that this is a relationship, and everything surrounding that relationship is about working towards their future and aspirations.
EVOKE® was created by George Kinder and the Kinder Institute of Life Planning
So now we have a client who has been listened to, appreciated, enthused and enlightened. Educated with realistic outcomes, and worst case scenarios, so that, although the financial journey is rarely a smooth one, what comes along can be taken in their stride as they move towards their future – a good, fulfilling future.
Which would you prefer to be on the end of?