Executive Summary
As financial planning continues to shift further and further away from selling products and towards the delivery of quality advice, many have suggested that financial planning may soon reach the point where it departs entirely from its "sales" roots - a vision widely supported by both consumers and new financial planners entering the profession, who all view sales with a highly negative stigma.
Yet the reality is that at its purest level, "selling" is really just about persuasion and influencing the decisions of others, and financial planners really are in the business of persuasion, convincing clients to: 1) pay the planner for services; 2) to engage in the financial planning process; and 3) to implement the advisor's recommendations. As a result, if you - as the planner - don't know how to "sell" your clients on the value of you, the financial planning you offer, and motivate them to act on your recommendations, then you simply can't succeed as a financial planner, regardless of whether the sale of an insurance or investment product is ever involved (though especially if clients really do need to implement such products!).
Accordingly, the reality is that perhaps it's time to ditch the sales stigma in the financial planning profession, and take a fresh look at how the noblest implementation of sales, persuasion, and influence is at the very core of what it takes to be a successful practitioner. To do this, however, also requires dropping the embarrassing history of how "sales" has been done in financial services in the past, and instead look to the latest tools and research available, so that we can develop proper training for how to "sell" effectively in the 21st century.
The inspiration for today's blog post is a recent new book by Daniel Pink entitled "To Sell Is Human: The Surprising Truth About Moving Others" which makes the point that despite the stigma, and the emergence of technologies that make it easier than ever to buy products and services directly, sales is actually on the rise in the US. The book notes that not only are 1 in 9 people working in an outright "sales" job position, but when employees across the world are surveyed the findings show that about 40% of the time we spend at work, even in a non-sales job, is engaged in a "non-sales selling" process that involves persuading, influencing, motivating, and convincing others, albeit in ways that don't necessarily involve the purchase of a product in the end. The video below - the official book trailer from Vimeo - provides a further description of these trends.
As a result of the emerging ubiquity of sales skills, the reality is that selling - done properly and right - is becoming a key skillset for the 21st century... and financial planning is no exception.
Non-Sales Selling In Financial Planning
As Pink notes in his book, a significant amount of time is spent even in "non-sales" jobs doing things that are essentially still "selling" - or at least, work that involves convincing or persuades someone to give up something they value for something you're offering or recommending. Whether it's pitching an idea to a boss, trying to motivate staff to get on board with a new initiative, or getting a client to move forward on a recommendation, there's a remarkable amount of "selling" activity in the workplace... for everyone. However, some industries transcend these mere on-the-job skills; for some professionals in particular, the entire purpose of their job may be to motivate people to action or change. In fact, Pink notes that one of the strongest growing segments of the job market for the past decade has been the "Ed-Med" sector - education, and medical/health services. What's significant about the Ed-Med sector in particular is that it is entirely built around a foundation of helping people to learn, and convincing them to change their behaviors by implementing the recommendations of a professional. Simply put, these are professions all about "moving people" towards some better outcome, and selling is a key component in order to get people to part with resources or make a change, "not to deprive that person, but to leave him [or her] better off in the end."
In addition, Pink notes how for an increasing number of businesses, there are no salespeople - or at least, no dedicated salespeople who would use that label as their job title. Instead, every aspect of delivering the product or service is part of the sales process, built on the simple idea that if customers/clients are served well, they will do more business in the future and refer friends, family, and colleagues to do the same. As a result, everyone in the business must have the "elasticity" of a skillset that includes service and at least some small component of sales; as stated in the book, "interacting with customers around problems isn't selling per se, but it sells." That being said, businesses that train people exclusively in technical skills but in no element of sales skills may fail, for the simple reason that even a well-served client may still need some gentle, effective nudge towards referring new clients. In other words, even with technical people who have a great technical skillset and serve the clients/customers of the business well, sales is still some component of the job.
Notably, these concepts all map well to the issues we face as financial planners as well. The success of a financial planning business is all about helping to move people towards their goals; in this manner, its reliance on convincing and persuasion is remarkably similar to the mission of teachers and doctors in the Ed-Med sector. Similarly, growing a business by serving clients well is a staple of business strategy in the financial planning world; good service is not just about client success, but also referrals, especially if the rest of the business is well positioned to support the referrals process. At the same time, there are sadly far too many firms that are discovering the hard way that great service with zero focus in marketing and sales doesn't result in the desired referral growth; great service may be a necessary condition for referrals, but it alone is not sufficient without some understanding of sales as well.
And of course, these are all sales skills engaged with people who are already clients, and ignores the most fundamental part of selling that still applies for most financial planners - convincing a client to hire you and pay for your services in the first place!
New Sales Skills For A New World Of Selling
So how does a financial planner succeed in the new world of selling? Clearly, the "old" ways of selling, with high pressure sales tactics with slick and sleazy salesmen in business suits, isn't going to cut it. In fact, Pink points out in his book that the entire world is shifting from "caveat emptor" - where the buyer must be wary of being taken advantage of by a more knowledgeable seller - to a world of "caveat venditor" where the seller must beware, because businesses that serve poorly will lose referrals and growth to those that treat their customers and clients well. This doesn't mean that being in a "sales" business is irrelevant as consumers have more access to information and the ability to buy products and services online, though; instead, it simply means the role shifts, and Pink suggests that sellers will go from being the protectors and purveyors of information to the curators and clarifiers of it instead.
In turn, this means more than ever, effective sellers must be aware and understanding of the needs, concerns, and interests of the people they are working with; in fact, Pink suggests this skill of "attunement" and being able to see the world from the perspective of the client is a key skill for the 21st century. But this isn't just about emotional empathy; in fact, the book cites one study where negotiators who imagined what the other side was thinking performed even better than those who just thought about what the other side was feeling (although both performed better than the control group that was not prompted to focus on either). Another surprising result: because of the importance of attunement, strong extroverts are actually not the best salespeople (because they're not good at stopping to really think from someone else's perspective); instead, those more balanced with some introverted and some extroverted traits did best. (Wondering where you stand? Pink has a nice quick introversion/extroversion assessment on his website.)
In addition, Pink notes how a key trait of successful selling in the future is to help bring people clarity; to help them eliminate the noise, and focus on the key decisions that need to be made. Of course, many financial planners do this already, and the so-called "paradox of choice" and client irrational tendencies are not news for advisors. However, even if we help clients to think through the process, and eliminate some of the distracting noise to get clarity on their goals and issues, it's equally important to help them get to a proper actionable conclusion; in one of the most salient comments of the entire book, Pink notes in the chapter on clarity that "clarity on how to think without clarity on how to act can leave people unmoved."
It's Time For Real Financial Planning Sales Training
Perhaps the greatest caveat of this discussion about sales skills in financial planning is that there's virtually nothing about this currently taught to financial planners! While the CFP Board Topic List for Continuing Education (CE) credit does include classes on client trust and communication - which form the basis for this discussion - real education on selling, or the fundamentals of influencing and motivating clients, is rarely taught despite being so crucial to succeed as a financial planner. And often if any aspects of sales are taught, the education is based on either the "old" way of selling and doing business, or is built upon anecdotes of "what worked for me" rather than hard science.
And the reality is that there is a growing base of hard science about how selling, motivating, and persuasion really work. A clear but unstated theme from the final chapters of Pink's book is the robustness of the science out there about how to sell and convince people successfully, from the fact that we find recommendations and statements more convincing when they rhyme (although it's subconscious it works all the time!), to the fact that granular numbers are more credible than coarse numbers (we think devices with a battery life up to 120 minutes will last longer than those with a battery life up to 2 hours!), to the fact that we work harder when we feel a more personal connection (radiologists catch problems more often on X-ray scans that are accompanied by a picture of the patient). These concepts could be translated into financial planning as well, from a tagline "We help clients retire in the proper attire" (it may sound corny, but you'll find it's remarkably catchy!), to explaining how the firm has helped 87 families achieve retirement success, to attaching a picture of the client to their CRM record to ensure that staff are always seeing the real person whenever they interact with a client.
At a broader level, it's hard to walk away from Pink's book without recognizing that financial planning may have fallen woefully behind in the basic education of practitioners about not only how to market and sell themselves as businessowners, but also about how to help motivate clients to implement their financial plans. While it may take a while for curriculum to be developed, and classes to emerge, though, it seems clear that "To Sell Is Human" may become a staple of the financial planner's library, along with Robert Cialdini's "Influence: Science and Practice" and also Dan Ariely's "Predictably Irrational" as well.
Of course, this doesn't mean selling will be easy. As Pink points out, people still need the buoyancy to survive a veritable "sea of rejection" in the process of trying to persuade clients and grow a business. Nonetheless, for those who struggle, Daniel Pink's "To Sell Is Human" offers some nice guidance and education about how to manage the challenge.
