Easy Way to Use Psychology in Your Marketing

Pam and I were interviewed on two radio shows recently:

http://www.ducttapemarketing.com/podcast.php?id=P1329
http://www.contacttalkradio.com/hosts/archives/eldontaylor.html

During the Duct Tape interview, John Jantsch asked a question about using psychology in marketing. We explained that the easiest way is to segment your target market by professions. See, each profession attracts people who tend to have the same personality type.

For example, surgeons are cut from the same bolt of cloth. They are people who want to be (need to be) the king of the mountain. They want to tell other people what to do. The must be able to make snap decisions and be right. They have the Driver personality type.

Now, knowing that, all you'd have to do is appeal to that personality type to reach them more effectively. If you approached them in any other way, they would filter out your message.

There are three or four different types of doctors. Half a dozen different types of business people. Several different types of financial people. Each one is represented by a personality type, or a combination of personality types. If you don't have a solid understanding of personality types, you will completely miss out on this strategic psychological advantage. So, isn't it time to improve your knowledge?

Follow this link: http://www.aboutpeople.com/Catalog/index.php. That's where you can find a description of our book Face Values. It is the best book on the planet to learn about using personality types (and values) in your marketing and selling.

-- Michael Lovas

The psychology of referrals - part 1

Since 1986, the common advice for getting referrals is ask for them. It took me years to figure this out - It's wrong. It's bad advice.

In this article I will share some of the research that clearly proves the folly of asking for a referral. Plus, I'll share with you some guidance in developing an approach that is much more effective.

Fact Set #1

The following comes from a 2008 report titled Investor and Industry Perspectives on Investment Advisors and Broker Dealers.

FACT 76% of Investors Found Advisors through Referrals
Regardless of the types of services received, the most common way respondents found their current advisor was by referral from a friend or family member.(45.6%) The second most common way was by a professional referral (30.5%).

FACT Investors seek Attentive, Likeable and Credible Advisors
When asked "What do you like about the services you receive from your advisor" the types of comments most frequently mentioned fell into 3 categories:

1. Accessibility or attentiveness ("she stays up to date on my issues," "is there when I need her")
2. Relationship or personality (he's "personable" or "friendly," "listens, asks good questions, understands my needs")
3. Expertise (she is knowledgeable about " or "knows her business")
   

There are really only two sides to every client relationship --- the personal and the professional. The more important side is the personal. Unless that side is addressed effectively, you could give your clients the impression that you consider them nothing more than a number. And, that number would be their contribution to your income statement.

FACT Investors dislike advisors who fail to keep in contact
When asked why they disliked an advisor, the most common type of comment was in accessibility or attentiveness category ("lack of contact" or "doesn't call me frequently enough"). One other notable negative comment commonly cited refers to the advisor's focus ("I don't think he has my interests at heart." or "He is trying to make money for himself" or "Often tries to sell securities that the brokerage firm is pushing."

Most clients won't call you on it. People are loath to cause stress. They will merely nod and make you think they're in agreement with you. Then, they will log it into their memory and move you from the "referable" category to the "un-referable" category.

FACT Investors are looking for an advisor they can Trust
Trust of the individual financial service professional was the most cited feature of what investors look for in a financial service provider.

Trust of the individual was cited as more important than trust of the firm for which that individual works.Who you are as a person, your personal congruence, is much more valuable to your clients than the firm listed on your business card. Your credibility is the most important asset you have. And, it's the glue that bonds all the other elements together to make you referable - or not.

CONCLUSIONS:
Based on the research provided by this research, we see that most people who are looking for an advisor end up finding the one they hire through a referral from a friend or relative. The people making the referral are feeding new business only to a certain type of advisor --- one who keeps in touch with them, is accessible to them, has demonstrated trustworthiness, and one who has that client's best interest at heart. In our world, we call that Credibility because it effectively and successfully covers both the personal side and professional side.

With that in mind, my prescription to you is to create an effective system for keeping in touch with your clients, at least with your best clients. Mix your contacts with personal visits, lunches, small gifts and greeting cards.

Approach these touches personally. Think of it as individual communication or one-to-one marketing. If you can make those personal communications relevant to each person, you will have taken your first step into the realm of "Credibility Marketing."

The psychology of referrals - part 2

(continued from Part 1)

In this article I will share some of the research that clearly proves the folly of asking for a referral. Plus, I'll show you an approach that is much more effective.

Fact Set #2

The following come from a 2008 report titled Economics of Loyalty --- Conducted by Advisor Impact. One of the areas covered in this study was the dynamics of a disintegrating client relationship. In other words, what is really going on in the mind of your client just prior to your being fired or replaced If you knew that, you'd be able to plug the hole and retain that client.

Let's look at the findings:

FACT If you're not building the relationship, you're putting it at risk. One of the notable factors about client satisfaction in the financial industry (and most likely every industry) is that clients are on average very satisfied. That is an extremely misleading statistic which may lead us to believe that very few client relationships are at risk.

The key point (for advisors, consultants and relationship managers) is that the relationship seems to be at risk when overall satisfaction is at a 7 or less out of a 10-point scale. The numbers suggest that even if the relationship had been excellent, there was a decline in satisfaction just prior to making a change. In other words, if you're not building the relationship, you're putting it at risk.

These results together with those from the Investor and Industry Perspectives study suggest that client relationships slowly erode over time and probably hit a tipping point relative to some event or time when the advisor should have been responsive but wasn't. (9-11, 400 pt down day, Bear Stearns imploding).

To many financial advisors, the client relationship is not with the person but with the person's money, estate or account. Big mistake. When you focus on the impersonal aspect, you allow the human to drift away. So, how does that affect your ability to get a referral from that person? It destroys it.
FACT Engaged clients are most likely to give referrals. The study finds four categories of client relationships Disgruntled, Complacent, Content and Engaged. As you might expect, the more engaged a client is in your relationship (and work together), the more loyal the client is. The more loyal a client, the greater the chance he will give a referral. After all, the engaged client has something (more than money) invested in you. Giving a referral is one way they validate their connection to you.

FACT Asking for referrals does not produce referrals. The process of asking for referrals does not impact the likelihood of getting them. Consider how most advisors ask for referrals, "Can you share with me the names of some friends I might be able to call on."

Over the years, I've personally asked hundreds of advisors to tell me how they ask for referrals, and that's what most of them say. It is backwards! It is tantamount to saying, "I may not be able to help your friend, but I sure do need the business."

The findings from this study suggest that the reason clients give referrals is not to help the advisor; it is to do their friend or colleague a favor. If that is the case, how does that change your referral strategy?

For example, you might consider immediately implementing a communication strategy to show yourself as more responsive. This could include some or all of the following:

1. Personal phone calls to discuss the market and involve the client in the most appropriate next steps.
2. Lunch with a small group of clients to discuss the market and appropriate positioning of assets.
3. Devote time to developing your "value proposition." What do you want your clients to tell their friends about you? Perfect that language, then teach it to them to day on? your behalf.
4. Launch a greeting card campaign to enhance the personal side of your client relationships.
   

Conclusion.
Referrals are the result of a complex set of factors. You are in control of most of those factors. Referrals are NOT the result of asking for them. People who are engaged with their advisors are more satisfied with the relationship. Engaged clients give more referrals. Communication is a key to increasing the level of engagement.

Want to learn more? How about a FREE report on the 6-Step Referral Process? If you want it, just send me an email: michael@aboutpeople.com