The Exponential Experience

Clients learn about us by what we do and not what we say. Our actions reflect what is most important to us. If our customer contact time is spent talking about our products, our services, and ourselves, the customer soon understands what is truly important to us and it is not the customer. As Peter Drucker says “the aim of marketing to to make selling superfluous, to so know and understand our clients that the products fit them and sell themselves.” The financial services industry even has the “Know Your Client” Rule and we all agree this is important. The problem arises when we start to work with the customer. Our need to close the business, to generate revenue, and to feed our families, forces us to speed up the process and “get to the close.” These motives reveal themselves in our initial contact, when we do not focus on the client and their needs but rather on our agenda. If this shift from the customer to ourselves is generated by what motivates us, are we realizing what we truly want? Or are we selling ourselves short and settling for something less than the best in our business. In the coming weeks we will look at what we really want as business owners. Before that we need to understand how relationships are built.

Since 2000, the customer has changed and no one has informed Corporate America. Clients do not act as quickly on recommendations and many in the sales professions complained that clients are harder to close. What was once easy was now becoming difficult. Top producers in every industry are finding business complicated and less enjoyable. The problem is not with the client, it goes back further, to the beginning of the relationship. There was no trust established. Businesses do not know what motivates their clients, they know the facts of their client’s lives but not the feelings and motivations behind those facts.

A relationship follows trust and is enhanced as the trust grows over time. We learn early to trust people based on what they do and not what they say. This was overlooked in the go-go years of the last quarter century. Facts superseded feeling. Information was king and who ever had the information was the most sought after person. Client relationships were established on cold calls. Direct solicitation worked and seminars worked even better. But once the roller coaster ride of the 1990’s was over clients began to reexamine whom they worked with and how the relationships were established. Many businesses came up short in the accounting.

Trust is established after a meaningful conversation. We understand this in our own experience if we look back to our dating years. A casual conversation may tweak a person’s interest, but no more. We must move beyond the surface and focus on the other person, not ourselves. This is the heart of the problem. When we examine most business conversations eighty to ninety percent of the conversation is about the interest of the business, it’s products and services, or directly about delivering solutions. Less than ten percent of the conversation is about the client, their life, issues, concerns, needs, or problems.

The old axiom says the one thing a person most wants to talk about is them self. Amazingly, the one thing businesses rarely let clients talk about is themselves. Herein lies the problem. The clients learn more about a business by what it does, rather than what it say. If a company focuses most of their conversations on them self, the clients clearly understand that the companies agenda is more important than theirs.

For the twenty-five year period, beginning in the mid 1970’s and ending in 1999, the financial markets basked in the sunshine of client trust. An entire generation lived constantly in a buy mode, dealing with whoever had the best story or the most exciting advertising. Solicitation was the game of the day. Sale techniques improved an individual’s chances in capturing a slice of the consumer’s spending. A person’s ability to sell was the most important hiring criteria. The industry had products to sell, after deregulation, and customers were willing to be sold. There was little need to know the client, sales were easy and only a few facts were required to open a new account. Because everything was advancing, the relationships looked sound, everyone was happy.

The selling celebration ended in 1999. In the early years of the new millennium the American consumer had several shocks from which they have not yet recovered. First is the breach of faith by several of the large accounting, law firms, brokerage firms, and corporations in failing to disclose the truth of their circumstances. This breech of trust hit at the heart of information. Following the bankruptcies, embezzlements, fraud, and high-tech meltdown in 2000-2002, the four trusted advisor groups: accountants, lawyers, financial advisors, and corporate executives had each lost the trust that had been built over generations. Never in history have consumers lost faith with such a large sector of advice givers. Trust was assumed in the years prior to 2000, clients just wanted information so they could make better decisions. That has changed. I repeat for emphasis, that has changed.

Clients today are not willing to trust carte blanche, a firm or an advisor. The solicitation that worked so well over the last decades now meets resistance. The baby boom generation has read all of the sales books and knows that a fixed gaze and a firm handshake hide a hidden agenda of solicitation. They have come to view sales techniques as manipulative tools to get closer to their money faster, rather than getting to know them better. Peter Drucker continued to declare for over sixty years that we need to stop selling and really get to know our clients. He said, “the aim of marketing is to make selling superfluous; to know and understand the customer so well that the product or service fits [them] and sells itself.”

The business community has avoided for decades, the malpractice risks of the healthcare industry. As we become a more litigious society this escape will not continue. Too many advice givers have for too long, written prescriptions for their clients’ problems without proper examination and diagnosis. The financial service industry in particular, and all business in general, is at risk of being sucked into the vortex of litigation, if they do not immediately change.

We can eliminate malpractice as a concern, buy becoming competent advisors, understanding the difference between telling and listening, realize people learn more by what you do than what you say. We can reverse the impact of all the sales manuals of the last three decades that focus on getting to the close faster and have forgotten about the client along the way. We need to start with a proper focus on the customer and their needs. We can avoid the coming suits and litigation by not trying to force ourselves into their lives with sales techniques, we can build a relationship where they reach out and grab us and pull us into their lives as trusted advisors and confidants.

North American business is at a crucial turning point in history. The heart of marketing is a business’ ability to establish a trusting relationship with the customer. Without some degree of trust the consumer will look elsewhere for the product or service. Business is at risk. It is only a matter of who will be affected. In the coming weeks we will discuss how to make certain it is not you.

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