Why Do We Keep Selling The Old Way?

Because it’s what we know and what we have invested in...not because it is what works better and will allow us to win in the future. For professional services firms like #financialadvisors this is even more important to question how we are going to grow our business after the pandemic.

This is, to a great extent, because of something in psychology called the sunk cost effect. I was reminded of sunk cost effect when reading a paper about the 1996 Tragedy on Mt Everest. 5 climbers died that day and there is a case to be made that sunk cost effect had a role in their deaths. I wonder if your business is facing a Mt. Everest moment right now.

“The sunk cost effect is the general tendency for people to continue an endeavor, or continue consuming or pursuing an option, if they’ve invested time or money or some resource in it,” says Christopher Olivola, an assistant professor of marketing at Carnegie Mellon’s Tepper School of Business and the author of a 2018 paper on the topic published in the journal Psychological Science. “That effect becomes a fallacy if it’s pushing you to do things that are making you unhappy or worse off.”

That explanation reminds me of how so many companies are approaching #socialmedia and #digitaltransformation today. Professional services firms are being influenced by marketing and advertising types that are overly committed to the mindset and techniques of traditional, push selling. Applying this type of mindset to social is doomed to fail and is a sharp departure from how you originally built your business.

For example, let us take a look at financial advisors. After 20+ years coaching and training within the industry I am comfortable saying that the vast majority of them did a significant degree of cold calling in their first few years to 'build the business'.

I don't know a single advisor that has told me that (a) they enjoyed the process and (b) that they have continued to grow their business that way to this day.

In fact, the industry itself will acknowledge that there is a horrible retention rate in both new advisors and at the 3 year mark. There is only one reason for this: they are being taught to sell the old way and they are unable to survive long enough to transition to a majority referral based business. Unfortunately, the old way of selling (cold calling and interrupting your prospects) has been applied to the new way of doing business: social.

What works offline and online? Being social. People need to know you.

We all, no matter how big or small the business, want more and better referrals and the way we get them is by being social. Now, thanks to social media platforms we have the ability to network at scale. The trick is this: your mindset.

If you are bringing the old, predatory mindset associated with cold calling and transactional sales (we call it commission breath) to the new platforms of social...you are not going to be sustainable with your sales efforts. You will not build real relationships, you will not be perceived as a valuable source of information and you will not be referred effectively.

What to do:

1. Build a network. LinkedIn, for example, allows you to add 100 connections per week. The size of your network, over time, is your greatest asset as a social person. It represents your ability to help others if you have the right mindset. That's right, your network is not your prospect pool...it is a growing group of people that you are looking to help (and not just get paid by) and that you are getting help from as well.
2. Give. This is where the traditional marketing people get it all wrong. Sharing content is not guaranteed to create sales results. You have to share the right content and you have to get it in front of the right people. But, your value cannot be based solely upon your content...it must be based upon what you do to actually help people. Have you referred to people in your online network? How often and how many? The most powerful question in the history of networking...if you have a giving mindset, is "How Can I Help You?"
3. Be consistent. In the old days of referral marketing we joined groups of other professionals and met regularly (the best results came from once per week). Without question, measured over multiple continents and cultures, the best results were achieved by those people that almost never missed a meeting. They were, by their attendance, proving that they were trustworthy. Trust, online, is build the same way. You need to be posting consistently and you need to have a strategy for it. What you share, when you share it and how you interact with those that engage with you is going to either build or destroy trust.

We call the new way, the good way, to sell online #socialselling. This is the kind of selling where the client moves towards you and it is the kind of selling that you will be able to do for the rest of your career. Social selling scales along with you and your company when done strategically.

The challenge is to find the right guide to help you and your organization build upon what you know and enjoy from offline success (referrals) into a strong foundation online (social selling) that will ensure the confidence and profitability to help your clients and your network into any future. That is what I do. It all starts with a conversation. How about we be...social?

All the best,

Mike

Values Based Mindset. DLA Ignite