Sometimes there is a great temptation by advisors to scare clients into taking actions that are in their own best interests. Resist the temptation. Fear works as a motivator only for a small proportion of older clients — generally the ones you don’t want anyway because they are poorly educated and not affluent.
Fear doesn’t work because it gets in the way of learning. And in order to come to a buying decision, clients need to learn things about an unfamiliar investment product, such as the characteristics of a specific mutual fund you are recommending.
The problem with fear is that it creates negative emotions. Negative emotions decrease the flow of the body chemicals, including adrenaline, and constrict the arteries, decreasing the flow of blood to the brain. The result of those physiological changes is that it is more difficult to learn and more difficult to remember what is learned.
In other words, fear inhibits the sale by making it more difficult for clients to comprehend the product’s characteristics and, therefore, why it is good for them. “If you don’t make this investment, you’re going to have to eat dog food when you retire” is not the best way to get a prospect to understand asset allocation.
Instead, try connecting the product to something positive. “This investment gives you the opportunity to develop additional income to take more of the kind of vacations you love” is the kind of connection that is likely to increase the ability to learn.
It creates positive emotions. Therefore, the flow of body chemicals, including adrenaline, increases. Arteries may expand, increasing the flow of blood to the brain. These physiological changes make it easier to learn and to remember what is learned.
Excerpted with permission from “101 Easy Ways to Increase Business with Boomerplus Clients!” by Richard B. Ross and Michael P. Sullivan. For more information, visit www.graymoney.biz.
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