Think about your sales experiences as a customer.

What are some of the things that disappoint or frustrate you whenever you’re trying to buy a new product?

Vague offerings?

Out-of-stock goods?

Uncustomizable products?

Nosy or pushy salespeople?

When mapping the customer sales experience, one of the natural bottlenecks often turns out to be the salesperson.

Think about this: Many customers encounter a salesperson and often have a natural aversion towards purchase, hesitant to disclose their true needs.

Whether in real estate, home electronics, or hiring consultants, there is a natural fear that the salesperson may attempt to sell more than what the customer needs.

This issue becomes evident when a salesperson approaches a customer and asks:

“Can I help you?”

… and the most common customer response?

“I’m just looking.”

Consider two types of transactions: In the first, customers purchase and choose a product through a salesperson who has a fixed set of offerings.

In the other transaction, a website allows customers to self-select and deliberate from a myriad of offerings, unhampered by the pressure of a salesperson.

As seen in the second transaction, with the barrier of sales pressure gone, the customer is free to purchase at will, and may even choose to purchase more features than if a salesperson tried to “upsell.”

Photo from Unsplash

With no bottleneck, business exchanges can flow more freely as need fulfillment is sought more openly and willingly.

… BUT WAIT.

We’ve waxed poetic about the sales process over the course of a few paragraphs.

What does this have to do with your financial advisory practice?

Well, you’ll just have to keep reading below.

Redesigning the Customers’ Processes

The advent of the Internet allowed for a number of new business models to come out.

InsWeb was a case in point.

Photo from Crunchbase

Just a brief context: Many different types of insurance policies exist—car insurance, home insurance, insurance of personal valuables, etc. InsWeb noticed this and thought that with the Web, a one-stop shop for insurance could be made.

The goal?

To get people to think about InsWeb when they think about insurance!

… but here’s the thing: Few people reading this would recall InsWeb, and for good reason.

InsWeb was unsuccessful in its attempt to fulfill an unmet need. People do not think about insurance as an isolated subject.

Instead, people tend to think about car insurance when they buy a car.

They think about home insurance when they buy a home.

They think about life insurance and disability insurance after getting married or having children.

Simply said, a portal that aggregates insurance products of different types doesn’t fit within the customer’s natural processes. A one-stop shop for insurance might have made sense from an industry or vendor standpoint, but not from a customer standpoint.

So, with 10 years of publicly available information from 1998 to 2007, InsWeb’s earning power levels had never risen above zero.

On the other hand, Walmart was able to redesign its exchanges in retail in many different ways. One example is the strategy to provide the vital few offerings people need or want instead of the costly many.

Photo from Britannica

The reason for this is Walmart realized how much consumers value time and convenience. In many departments, such as toys, Walmart carries fewer selections of products than its competitors. Instead, the company focuses on selling products that are in-demand.

Besides, very few customers enjoy parking their vehicles at one store, shopping, getting back in their car, driving to another store, parking and shopping again, and so on. Using this information, Walmart has focused on having just the 20% of goods that sell 80% of the time.

When coupled with prices as low as or lower than other retailers, the convenience of a smaller but “more popular” selection overwhelms the need for an exhaustive selection.

This has resulted in customers bypassing the inconvenience of visiting several stores, and focusing so much of their purchases in just one store—particularly, Walmart.

So… what can financial advisors—both novice and experienced—learn from these two case studies?

Prioritizing your customer’s experience based on need is important.

Just because a business has removed one of the natural bottlenecks to sales—the salesperson—and taken advantage of newer business models, that doesn’t mean the redesigned process or strategy will certainly be successful.

Financial advisors still need to consider the customer perspectives when redesigning processes.

No matter how good a strategy is, it won’t make a HUGE positive difference if it doesn’t actually fulfill an unmet need.

Redesigning to Improve the Brand

Better maps, better planning, and superior navigation are critical elements of a high-performing financial advisory practice… and when redesigning processes, return-driven financial advisors strive to relinquish attachment to previously held ideas.

Just because an activity has been done a certain way for decades does not mean it needs to continue to be done that same way in the future.

By rearranging processes, realigning relationships, and redefining and better understanding needs, financial advisors find new ways of fulfilling otherwise unmet needs.

Dr. Wayne Dyer, the renowned self-development author and speaker, captured this idea well:

“When you change the way you look at things, the things you look at change.”

For financial advisors, this means the most successful practices go beyond simply executing transactions.

They take the time to understand the deeper exchanges happening with their clients and the real motivations behind them.

The top financial advisors look past the functional aspects of their services, like portfolio performance or financial management, and instead focus on uncovering their clients’ unmet needs.

By understanding the full picture of what a client is truly seeking, such as a sense of being understood, confidence, and security, advisors can deliver a customer experience and process that meets those needs more completely.

Best regards,

Joel Litman & Rob Spivey
Chief Investment Officer &
Director of Research
at Valens Research

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