All decisions are confidence based. This is one of the great truths in understanding how people make decisions. One of the most effective ways to establish confidence with existing and potential clients is by demonstrating your expertise. Howard Haskings, a successful advisor I coach, applied this understanding of behavioral economics to serve a large number of people in his community.
Howard’s financial advisory firm is located in Windsor, Ontario, an economic center very dependent on the automotive industry in nearby Detroit. One of the major automotive companies offered buyouts and early retirement packages to its employees in the area. Howard’s firm had a number of clients who received offers. Understandably, for the clients, accepting or rejecting the offer was a major decision, which caused real anxiety. Howard and his team invested a great deal of time to fully understand the consequences as well as both the pros and cons of the offers. They were proactive in meeting with clients to assist them in determining the financial and career implications of their choices. In addition, they talked with HR personnel in the company and met with union leadership to gain perspective on the benefits and costs of the offers.
The firm’s efforts on behalf of clients led to introductions, recommendations and referrals to other employees in the same situation. Through its involvement with the union leadership and the company’s HR department, Howard’s team earned the right to offer educational seminars to affected workers. The union leadership allowed Howard to promote these seminars and encouraged employees to attend. A local newspaper and a television station heard about the seminars and the work of Howard’s firm and interviewed him. The resulting press and television exposure significantly increased awareness of the firm’s expertise in providing counsel on the buyouts.
Behavioral economics examines how people make financial decisions. We often assume that people make rational decisions that are in their best interest. The reality is quite different. Faced with important decisions, people often procrastinate and feel confused and unsure of what to do. This is when they need a trusted advisor, someone who they can turn to for advice and counsel. How do we know who to trust? The research indicates that people match their behavior to those around them. When people express confidence in a person or an idea, it instills confidence in others.
The endorsement of fellow employees, the educational seminars and the media exposure fostered a sense of confidence in Howard and his firm. They were perceived as adding real value. As a result, they acquired a large number of new clients and made additional sales to existing clients.
Howard and his team took this lesson to heart and now incorporate these activities into their marketing system. The firm’s target markets include pre-retirees, retirees and business owners. In each market, the team works hard to acquire expertise and demonstrates its expertise in review meetings with clients, through educational seminars and by increasing media exposure. It is the combination of all of these activities that contributes to the firm’s success. It seems so simple. Act in a manner that builds confidence and people will turn to you for advice.