Understanding what motivates your client
The following is based on one of The Covenant Group’s clients. All of the names and telling details have been changed.
With an annual income closing in on the mid six-figure range, Victor is a successful advisor. At least by most people’s standards — but not by his. Victor is in his early fifties and has established himself in the high net worth market. Typically his clients are prosperous entrepreneurs, many of them millionaires. Last year, during a meeting with him, he told us he enjoyed the rewards of working in this market, but also found it frustrating. He felt he was losing cases he could have won, and wasn’t sure what he was doing wrong. He knew he hadn’t come close to reaching his own potential, and aspired to the kind of wealth his clients possessed.
As Victor put it, failing to close with a wealthy prospect isn’t like losing the kinds of prospects he used to deal with ten years ago. Back then he had many, low net worth clients and success was a volume game. “Now,” Victor told us, “when I’m favourably positioned in front of a guy who has a seven-figure estate, and I end up working hard to gain him as a client, it’s a terrible loss if I don’t close.” In our meeting, Victor asked for help on a particular case he was afraid of losing. The prospect was Angie Lowrey, owner of a health food store chain.
We asked Victor to tell us about his relationship with Angie. What Victor told us would betray a singular flaw in his approach to Angie. It is a flaw we find in many advisors, even successful ones. Correcting this problem would be the key to unlocking Victor’s potential.
Victor told us that he had had high hopes before his last meeting with Angie. She had very little insurance, and a large family — two children with her first husband and two with her present husband. Her health food stores were doing extremely well and she had a personal net worth of several million dollars. She was an ideal client. Victor went into his meeting with Angie convinced that she needed his services. There was a definite need to protect her family and she had the financial resources to do so. Unfortunately, Victor didn’t understand Angie and this tragic problem would lead him into a trap.
Early in their meeting, Victor had established that her children were very important to Angie. She loved her kids and spent a lot of time with them. However, when he asked Angie how she planned to care for her family after she died, she just shrugged. Victor was slightly stunned at her response. So far she had been quite amiable and forthcoming. Now, it was like a layer of ice had frozen between them. Victor, thinking she was nervous about making a commitment, decided to push on. He elaborated on the benefits of working with him and putting insurance in place to provide for her heirs. But still, she said nothing. He began to sweat. He steeled himself to make one more pitch to her, but abruptly she cut him off. “Victor,” she said, “I’m sorry but our time is up. I have a meeting I’m supposed to be in. Thank you for your time, but I’m really not interested in what you have to offer.”
Victor told us he had left that meeting in shock. He didn’t know what had happened. In order to understand what went wrong, we asked him for more details about Angie. As he described her, it quickly became clear that Victor lacked a fundamental skill that he would need to close her case. He failed to clearly understand how people make decisions. In particular, he never gained an understanding of what drove Angie to make big decisions in her life. He’d fallen into the trap of prejudging somebody. He saw her through his own eyes; but, to turn her from a prospect into a valuable client, Victor would need to know what uniquely motivated her. Victor had already established that Angie loved her kids. Unfortunately, that wasn’t enough to make her want to buy. We explained to Victor that, if he was to stand a chance with Angie he would have to find out what drove her. When we explained this to Victor he looked perplexed, and asked, “How do I do that, I’m not a psychologist?”
We replied, “Fortunately, people show you what’s inside them through their outward behaviour. People demonstrate their values by how they spend their time and money. Find Angie’s values and you have the key to her business.”
Two weeks later Victor managed to talk Angie into meeting with him again. At the beginning of the meeting, he asked her whether she still saw her children from her first marriage. She said that she spent as much time as she could with all her children, but, unfortunately, she was very busy with the business.
As she elaborated, Victor began to form a new picture of his prospect. She spent long hours at the office. She often stayed late and frequently took work home on the weekends. When he asked her how she was preparing for her retirement she just laughed and said she was so busy she couldn’t see herself ever retiring. When he pressed her, she admitted that she wasn’t making any investments. She was putting all of her money back into the business.
As she told him, “My future is right here in this office. Look around you, this business has been around for thirty years, it’s not going to disappear overnight. This business will provide for me when I’m older. When I’m gone, it’ll look after my kids.” When she said that, Victor smiled and nodded. She had given him his answer. He now understood what motivated her. She saw her business as her insurance policy and her retirement savings plan. She valued her family but was also strongly motivated to make her business succeed. The success of her business would eliminate her other concerns. Victor had the opening he needed.
“I’m here to protect your business,” he told her. “But, let me explain two risks you face by relying on your company for your investment and insurance needs.”
Victor went on to explain that if Angie died suddenly her company could be thrown into turmoil. Suppliers and business partners may not have the confidence in Angie’s replacement that they had in her. Secondly, if she died or wanted to retire during a downturn in the business cycle, there may not be enough liquid assets to satisfy the needs of her estate. In both cases, her business could have trouble surviving, let alone providing for her heirs. And, if Angie didn’t diversify her assets and protect her heirs with insurance, she would expose herself to needless risk.
Victor had hit a nerve. When he explained the risks that Angie’s business could face, her eyebrows perked up. By the end of that meeting, she had agreed to let him work on a proposal to eliminate her risks. Three weeks later, Angie became Victor’s client.
Lessons Learned
Two things have to happen for a case to close: one, the advisor must sell their solution to their prospect; and two, the prospect must make the decision to buy the advisor’s solution. While this is an obvious statement, it sometimes gets lost on the way to making a sale. Advisors must remember that, rather than selling, they are helping their prospects to buy. And the key to doing this lies in understanding how people make decisions. The best advisors know that values are the most powerful motivator. Unfortunately, many advisors have been taught a needs-based approached to sales, which implies that if people understand their need for a solution they will buy it. While needs are a factor, they are less important than someone’s values. As this case with Angie shows, one of the keys to selling is the ability to ferret out someone’s values. And a big mistake, as Victor demonstrates, is coming to the case with preconceived ideas about what someone’s values might. Advisors should avoid looking at people through the prism of their own perspective. As David Cowper used to tell me, “In order to sell to John Smith, you have to see John Smith through John Smith’s eyes.”
________________________________
The Covenant Group is referred to by many as where entrepreneurs go to become Business Builders. They are considered to be thought leaders and authors of the best-selling books, The 8 Best Practices of High-Performing Salespeople, The Entrepreneurial Journey, and The Business Builder.