At the National Ethics Bureau, we’ve even gotten wind that there are entire marketing strategies built around competitor bashing, from initial solicitation to close. For example, two agents recently slammed a competitor’s products in their seminar invitations. During their presentation, they went on to make disparaging comments about a particular product.
Frankly, we don’t understand the appeal of this approach. It creates bad initial impressions with the public (no one likes a rat). And it does not create long-term success (no one feels loyal toward a rat). Advisors who insist on tearing down their competitors end up losing three things:
1. Their reputation. For every prospect who buys from a negative seller, 10 others will be turned off by slimeball selling. These prospects will share their opinions with friends and family, spreading negative word-of-mouth like bird flu in a crowded chicken coop. And although losing their good name might not damage an advisor’s personal health, it may well affect the future health of his business.
2. Their clean records. When advisors and companies get bashed, they fight back. They complain to regulators who can sanction the offending advisors for unfair competition. The trash-talkers wind up not only with egg on their faces but also with black marks on their records. Result: they get placed on carrier watch lists (slowing down new-business processing and commission payments) and become targets of future regulator scrutiny.