LaValley: Understanding how clients think and act

Regular readers of this space know that people don’t always behave rationally or respond to logic because of the overriding influence that emotion has on how we think and act. It is the emotional intangibles that make communication more complex than it needs to be.

If our brains operated as simple calculators producing results based on what was keyed into them, advisors would need only to show a client what was in their best interest and they would make a decision solely based on that discussion alone.

Sounds simple. Just take more of a right-brain approach and your clients will be sold on your ideas, right?

But it still isn’t that simple…

While it is true your clients make decisions based on how they feel about your message, there is yet another filter they put the information through which can still get in the way of sound decision-making.

We call this filter the “compliance principles” of human behavior. These are internal rules we follow based on how we see ourselves in relation to others. In fact, even in the face of logic, emotion and common sense these compliance principles may still get in the way of your client learning new things or making decisions.

Consider these your client’s “fall back” position that may ultimately trump everything else and they cannot be ignored in the communications process. Seldom are these conscious thoughts; they are generated by their psyche and most often they don’t realize these influences are in place.

Here are the eight compliance principles of human behavior:

The principle	The rule	How you can make it work
Authority	We tend to listen to those people whose credentials have made them ‘authorities’. People will generally follow the advice of those they perceive to have expertise. Perceived expertise elicits respect and ultimately, compliance.	•Show that you have a team of experts for the benefit of your clients • Be proud of your own educational achievements. • Know your products and services. • Understand your client’s life and business. • Dress the way your client would like to see you. • Acquire a problem-solving attitude, be goal-oriented, focused and optimistic. • Print your professional designation on your card.
Reciprocity	We tend to want to do things for people who have done nice things for us.	• Show them that you care about them and not just their money. • Helping a client build an overall financial plan for the future that now provides them with a sense of financial comfort. • Holding education events for clients that help them understand things that are important to them. • Make them feel like you are a catalyst in helping them in their lives by showing them how they can best utilize the financial resources that they have.
Rapport	People follow the advice of those they like. We like joining and belonging to groups and are inclined to favor members or contributors to our “gang”.	• Become a subject-matter expert in something that is important to them. • Be the “advisor of choice” in a particular niche or target market. • Try to find ways to establish commonality, either in personal conversation or by becoming an expert in an area that is important to the client. • Remember important personal information about your client to show them that you care about them and not just their money. • Meet your clients at their home or place of business. • Have your client discussions around a table rather than over a desk.
Reason	People have a natural tendency to respond positively to requests that make sense.	• Make sure that you focus the benefits of your solutions to the client rather than on the advantages that your solution may have over a competitor. After all, if the client doesn’t need it, it really doesn’t matter whether you are any better than your competition. • Clearly communicate the benefits of your solutions in terms of a client’s emotional needs. • Get them to acknowledge a ‘need’ as part of your discovery conversation, to the point where they will articulate the words “I need that”, or “we need to do this”.
Efficiency	People tend to do things in the easiest way possible. They look for short cuts, simple explanations, roadmaps or step-by-step processes.	• Use ‘right-brain’ pictures to illustrate a concept. • Tie your conversation into a specific client need. • Show the client the specific steps that they can take to solve the problem. • Make it easy for the client to make a decision and commitment by doing as much as possible for him/her. • Distill your processes into easy-to-follow diagrams or flow charts. • Anticipate client roadblocks or “push-backs” and ensure that you cover these first in any explanation that you give. That helps to ensure that the client’s thought process doesn’t get sidetracked with issues that interrupt the thought-flow.
Consistency	People behave consistently with their previous behavior as well as with their self-concept.	• Continually reinforce your value proposition with your clients so that they will remember what you actually do (and have the language to tell others). • Always show the client how your solutions will improve on their present situation. • Use an emotional appeal rather than a logical one, particularly for older clients who are even more likely to be locked into crystallized thinking.
Social Evidence	People tend to do what others (for whom they have respect) do.	• Join groups or associations in your target market to demonstrate a connection to your chosen group. This will give prospects in that group comfort that you have some commonality and have been accepted by others. • Hold client appreciation events so that prospects and clients can see other clients who are happy with your relationship. • Make good use of testimonials and stories that illustrate the benefits that you provide to other clients. • Make sure that your clients understand the recognition that you have received in your industry through the designations that you hold. • Write articles as a subject matter expert to show clients and prospects that you have respect in the community for your ideas.
Scarcity	People tend to want something more if it is in short supply or time is running out.	• Make clients aware of their status within your practice by segmenting them and then providing different service levels. • Use the sense of urgency to book client review meetings, positioning the need by saying “It is important for us to get together as soon as possible to ensure that I have all of the information that I need to make sure we are on track.” • Provide special touches that help to bind the client to you. For example, an embossed binder, a shirt with a logo on it, a client appreciation dinner are all examples of creating this sense of exclusivity. • Create a client-advisory board of your best clients to provide input on how you can serve your clientele more effectively. This will give them a sense of belonging. • Provide recognition to clients who have referred others to you to encourage them to view themselves as a ‘builder’ of your business.

You already do many of these consciously or unconsciously. As you understand more about compliance principles of behavior, think about some of the ways that your clients react to your messages. Also, you should be able to identify actions that you undertake now that are based on compliance principles.

These compliance principles are not just over-generalizations or “pop science”. Failing to account for them can interrupt the communications process but acknowledging them can go along way towards building a communications bridge.

Barry LaValley is president, The LifeFirst Approach. He works with advisors and their firms to help them understand the key communications principles that will make them resonate more effectively with an aging clientele. His programs can be accessed through his website at www.lifefirstapproach.com or through the Canadian Securities Institutes Ch.P Strategic Wealth program.

Barry LaValley

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