Yes, it sounds crazy, I know.
You might think it’s about more leads, fees, AUM, or commissions. But no, it’s not.
The real reason is far more interesting. And it’s something most financial planners don’t know.
So before I’ll tell you the truth about how you are able to double your income while having highly satisfied customers, let me first tell you a story.
In their groundbreaking book Made to Stick, Dan and Chip Heath write about a group of researchers at Carnegie Mellon University who decided to see whether most people would donate to an abstract cause or to a single person.
They handed participants an envelope and a charity-request letter giving them an opportunity to donate some of their money to Save the Children. A charity that focuses on the well-being of children worldwide.
The researchers tested two versions of the request letter. The first version featured statistics about the magnitude of the problems facing children in Africa, such as the following:
- Food shortages in Malawi are affecting more than 3 million children
- Four million Angolans – one third of the population – have been forced to flee their homes
- More than 11 million people in Ethiopia need immediate food assistance
The other version of the letter gave information about a single young girl:
- Any money that you donate will go to Rokia, a seven-year old girl from Mali, Africa. Rokia is desperatly poor and faces the threat of severe hunger or even starvation. Her life will be changed for the better as a result of your financial gift. With your support, and the support of other caring sponsors, Save the Children will work with Rokia’s family and other members of the community to help feed and educate her and provide basic medical care and hygiene education
The researchers gave participants one or two different letters, then left them alone. They chose how much money, if any, to put back into the envelope, then they sealed the envelope and handed it back to the researcher.
On average, the people who read the statistics contributed $1,14. The people who read about Rokia contributed $2,38 – more than twice as much.
It seems that most people have this in common:
Appealing to the heart, trumps the abstract cause
It gets even more interesting. The researchers decided to give a third group of people both sets of information – the statistics and the story about Rokia. As it turned out the people who received both letters gave $1,43, almost a dollar less than the people who got the Rokia story alone.
The researchers theorized that thinking about numbers shifts people into a more analytical frame of mind. When people activate their left brain and think analytically, they’re less likely to think emotionally. The researchers believed that it was people’s right brain and emotional response to Rokia’s plight that led them to act. And donate more.
To prove this argument, they ran a second study. In this study they primed some people to think in a left-brain analytical way by asking questions such as: “If an object travels at five feet per minute, then by your calculations how many feet will it travel in 360 seconds?” Other people were primed to think in terms of right-brain feelings: “Please write down one word to describe how you feel when you hear the word ‘baby’.”
Then both groups were given the Rokia letter. And, confirming the researchers’ theory, the analytically primed people gave less. When people were primed to feel before they read about Rokia, they gave $2,34; about the same as before. But when they primed to calculate before they read about Rokia, they gave $1,26.
These results are shocking.
Once we put on our analytical hat, people are far less willing to spend money on a cause of which we feel is important to us.
What Financial Planners Better Should Not Do
Financial planners are “default” highly educated advisors. And, we’re also almost always helpful people, by nature. Therefore it’s quite tempting to spread your (analytical, left-brain) knowledge when explaining your service, telling your story and talking to your customers.
To test what language most financial planners use on their website I just googled “financial planner <name city>” to peek at some – randomly chosen – financial planner’s websites. It turnes out that every site I visited uses words and phrases like:
“facilitating the accomplishment of long-term financial goals”
“answering financial questions”
“assist in making financial decisions”
“maximizing the tax efficiency of client portfolios”
“fee-only financial planner”
“investment management services”
And so on.
Those financial planners probably – and unconsciously – have put on their “analytical hat” when making the text for their websites.
So, I wonder….
Do you think – after reading Rokia’s story – that when you explain your financial planning service, or tell your story (on your website), or talk to your customers with words like financial, tax and fee-only, how do you think this effects your (potential) client’s willingness to pay your price?
I bet the answer is obvious to you.
What Financial Planners Better Should Do
Don’t feel bad. We can’t blame ourselves. Financial planners are almost always analytical left brainers. Why? Because we are educated to be analytical, logical and rational. Think about your CFP examination. Or other financial planning education.
How much percent of the program is about engaging your clients?
As you probably know by now, numbers and facts certainly do not engage. But that’s not all…
When using analytical language you also – unconsciously – influence your client to think in an analytical, left-brain way about your service. Which has the annoying consequence that it decreases your client’s willingness to pay your price. Which leads to the unpleasant thought that your clients want to pay less than 50% of your price.
On the other hand…if almost every financial planner speaks in an analytical way, what are the possibilities for a higher income when we start talking in a more emotional, engaging and memorable way?
Chances are that people are far more willing to pay more for your services. And it’s not only that. They also feel more engaged about you and your services.
So what exactly should we do?
First, I believe it’s crucial that your (potential) clients believe in you and your services. That counts for a lot.
But belief is not enough.
For people to take action so that they really want to pay your price, they have to care.
Belief does not necessarily make people care enough to act. And certainly not make them want to pay a higher price.
For example, everyone believes that eatling lots of fatty food leads to health problems; there’s no doubt about the facts. But the belief does not make people care enough to act.
However, there is one thing that does make people act.
It’s all about feelings. Feelings do inspire people to act.
How Do You Make People Care? (And Act, And Pay Your Price)
To make people care, your story, your language, and your customer materials should be based less on logic and more on tapping into emotions. It’s less about presenting information and more about persuading people deep down.
The effect of your story should be that you capture attention, entertain, enlighten, and persuade. And most important: matter. Your story should be memorable and shareable — and appeal to emotions.
Studies from the Journal of Advertising Research show that people are twice as likely to be persuaded by emotion than by facts.
The story of Rokia shows that people are willing to pay you twice your price.
There’s only one challenge. And I know for sure that you really can conquer that. What you need to do is to fulfill your right brain potential so that you really can make an emotional connection with your customers.
So, your story matters … but how do you tell your story?
What, specifically, makes for a good and engaging story?
If you want to know the 5 Things Every Great Story Needs, you’ll receive the PDF.
All you have to do, is to answer this question:
What Is The One Thing You Want Me To Do, To Help You Make Your Business Matter?
Please, leave your answer here below in the comment field.
And you’ll get the 5 Things Every Great Story Needs.
To Your Success,
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Thanks for this great article.