I am fascinated by the disconnect between what advisors say to persuade prospects to become clients and what data indicate would actually work. The truth is that most of us need to radically change our approach to prospect meetings.
Many advisors conduct meetings with prospects by presenting, educating and explaining technical aspects of finance. As I discussed in a previous article, the data indicates that advisors should abandon this approach. It would be far more productive to ask questions, listen and establish an emotional connection.
Often, prospects interview a number of different advisors before deciding which one they will choose to manage their assets. If you ask how they made their decision, most prospects would tell you that they objectively and rationally selected the best-qualified advisor. They may believe that, but it’s probably untrue.
What drives decisions
We can learn a lot about how prospects pick advisors from criteria used by employers to make decisions about hiring. As Richard Wiseman explains in his excellent book, 59 Seconds: Change Your Life in Under a Minute, employers believe they hire the job applicants whose skills best fit the position. But a prominent study demonstrates that another factor sways the decision-making process. Wiseman refers to this factor as “a mysterious and powerful force.”
The study collected data from 116 undergraduate business students who registered for job-search assistance at their campus placement office. The researchers collected data on the qualifications and work experience of the job applicants, and interviewed the students after they went on job interviews.
The study found that an employer’s decision about whether or not to make a job offer isn’t based on qualifications or work experience. The critical factor influencing the hiring decision is whether or not the candidate is a pleasant person. According to Wiseman, “those who had managed to ingratiate themselves were very likely to be offered a position.”
Ramifications for Advisors
The ramifications of this study for advisors are profound. Most advisors I’ve met spend an inordinate amount of time improving their technical expertise. Presumably, they believe this time is well spent because it will increase their ability to secure more assets under management.
While expertise is important, “likability” may be an equally significant, or even greater, contributor to an advisor’s ability to convert prospects into clients. According to Mitch Anthony, the author of Selling with Emotional Intelligence, “likability is as important as ability.” Dr. Robert Cialdini, an expert on persuasion, agrees. He notes that “people prefer to say ‘yes’ to those they know and like.” Michael Lovas, an author and founder of a coaching firm specializing in the financial industry, succinctly summarizes the importance of likability as follows: “Bottom line – if you want to become more successful, become more likable.”
How to Become More Likable
Lovas believes that people who develop the "skill set" of likability are more successful, receive more promotions, close more sales, make more money and get better service. Lovas notes that facial expressions account for 55% of the perception of likability. Fake smiles and a lack of eye contact correlate negatively with likability.
Other suggestions for becoming more likable include being engaged and passionate, having a sense of humor, assuming goodwill, complimenting others, being flexible and showing humility.
Lovas concludes that financial advisors who value relationships over technical expertise tend to be more likable.
The consequences of not being likable can be devastating. According to Lovas, if you are not likable, 83% of people will perceive you as untrustworthy. Research indicates that decision-makers do business with someone they don't like 17% of the time. Those are not great odds.
The Takeaway
What is most compelling about the research on likability is that being likable is something over which we have control. As Lovas indicates, it is a "skill set." Just like other skill sets, it requires time, effort and goal-setting to achieve. Consider allocating at least as much time to becoming more likable as you do to refining your technical skills.
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 is The Smartest Sales Book You'll Ever Read. He consults with corporations and advisory firms on ways to improve their sales.
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