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In a recent article, I discussed the importance of asking questions. Asking questions, however, will only get you halfway to your destination. It is critically important that you listen carefully to the responses.
As Ernest Hemingway said, “When people talk, listen completely. Most people never listen.”
Are you one of those people?
For many years, I fit neatly into the category of a person who did not really listen.
There is a massive disconnect between our perception of ourselves as effective listeners and reality. In one study of more than 8,000 business people, virtually all those surveyed thought they were average or above-average listeners. More objective studies have found that the average person has a listening efficiency rate of a meager 25%.
Listening isn’t always easy
Good listening is surprisingly difficult. This is especially true for advisors. We have an agenda. We have what is known as “asymmetric information,” which means we usually know much more about investments than our clients. We assume prospects come to us because of our superior knowledge and expertise. It is only logical for us to demonstrate our expertise by speaking and not listening.
Listening does not seem very complicated. Don't be fooled. Really listening to what is being said is an art. You have to train yourself to do it right.
Competitive versus genuine listening
Picture this scenario: An elderly widow comes in to see you. She has inherited $5 million. She doesn’t know how to invest it. She is very unsophisticated, but she has some general ideas about her investment goals, which she explains to you as best she can.
Are you really listening to her? Or are you are figuring out how you are going to respond to what she is saying? The latter is competitive listening. You are pretending to have a genuine interest in her agenda, while your mind is focused on your agenda.
If you were engaged in genuine listening (sometimes called reflective listening), here’s how you would be interacting with the widow: “I understand your primary concern is making sure you don’t run out of money during your lifetime, but you would also like to leave an inheritance to your children. Do I have that right?”
By genuinely listening to her answers to these questions, you would gain enough information to provide your prospective client with the best investment solution for her.
Listening tips
How can you become better at listening? Keep these suggestions in mind.
Avoid selective listening.Training yourself to become a genuine, reflective listener requires a dedicated effort to reverse your default behavior.
If you tune out in some situations, you’re being a selective listener. Selective listening is very harmful to your ability to capture business. If you engage in selective listening based on your biases and self-interest, you will fail to recognize the value your prospective client is placing on subjects you are excluding. If you react negatively (and instantly) to something that is being said, you may incorrectly assume that you are being asked for your opinion, when in reality the other person may just want to be heard.
Stop talking. I know it’s obvious, but you can’t listen and talk at the same time. To gauge whether you are predominately listening or talking, apply the “80/20 rule.” Listen 80% of the time. Talk only 20% of the time. I have had thousands of interactions with salespeople over the years. None of them has come close to applying this rule. I have to work really hard to comply with it myself. Our normal inclination is to believe what we are saying is very important and everyone is interested in it.
Let the prospect speak first. Advisors often assume they should go first and begin the conversation with a lengthy monologue. This is a critical error. Give the other person permission to talk freely by asking a short, open-ended question. I typically start meetings with prospects by saying: “Tell me about yourself.” Try it. You'll be amazed at the responses.
Avoid interrupting. The opposite of listening is interrupting. Interrupting sends all the wrong messages. It can be perceived as rude. It conveys a lack of interest in what is being said. It shows a lack of respect for the speaker.
You can learn a lot from police detectives doing an interrogation of a suspect. They are taught to ask a question and then refrain from doing anything that might cause the suspect to stop talking.
Most of us are not aware of our tendency to interrupt. Try this exercise. Ask your family or friends, “Do I interrupt you when you’re speaking to me?” You may be surprised at the response. If it is “yes,” ask them to make it a point to tell you every time you interrupt them, regardless of the context. Also, keep a mental scorecard of the times you interrupt others. You will be amazed at how often you fall into this trap. Remember, the key to effective selling is eliciting information and listening to what is being said. What you are saying is of far less importance.
Be patient. Even when someone is saying something wrong or offensive, let the other person completely finish the thought. Follow up with questions instead of statements.
Pause before replying. When your prospect stops talking, you may think you need to respond instantly, but you don’t. Pausing for a few seconds before replying ensures that your potential customer has stopped speaking. It also gives you the opportunity to carefully consider what was said instead of responding with a canned script.
Paraphrase. It is important for your prospect to be confident that you understand his or her views. You can achieve this goal by paraphrasing back what was conveyed to you. You might say something like this: “I understand you are much more concerned about preserving your capital than achieving maximum returns. Is that correct?"
Don’t assume you’re being asked for advice. I have fallen into this trap all too often. Given my background as a lawyer and an investment advisor, it’s easy for me to assume prospective clients want my advice. This is rarely the case. Most people know what they want. They may just want you to acknowledge that you are hearing their views.
I am not suggesting that your prospective client will never want your advice. After you have elicited information and carefully listened to it, there will come a time when the client asks you questions. This is the time to provide advice, geared specifically to what is on the client’s mind.
Be especially careful to not interrupt women. There is considerable evidence that women are interrupted more than men. Be particularly sensitive about interrupting a woman. She will appreciate it.
Harness the power of rapt attention. Flattery, when done in a manipulative way, is a very poor sales strategy. People aren’t stupid. They understand when they are being played. But according to Dale Carnegie, the author of the iconic book How to Win Friends and Influence People, “Rapt attention is the highest form of flattery.” Think about that for a moment. By simply listening intently to what your prospect is telling you, you can demonstrate genuine interest and concern.
There is a serious payoff if you can suppress your normal inclination to talk. How do you want prospects to perceive you? Is being thought of as glib, slick or someone who has all the answers really the impression you want to create?
In stark contrast, think about these perceptions: “Really understood what I was trying to convey.” “Thoughtful.” “Analytical.” If the prospective client called his or her spouse and described you in those terms, wouldn’t you feel like you had made a terrific impression? It’s no guarantee you will capture the business, but you will have skewed the odds in your favor.
Dan Solin is the director of investor advocacy for the BAM Alliance and a wealth advisor with Buckingham. He is a New York Times best-selling author of the Smartest series of books. His latest book, The Smartest Sales Book You'll Ever Read, has just been published. He consults with corporations and advisory firms on ways to improve their sales.
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