Typically, those who sell tangible and intangible products make their initial entry as a salesperson, and to some prospects (who may genuinely need what is being sold) that is a strong discouragement. How might you avoid this?
1. The first way is to offer some type of service that you can extend absolutely free. However, the consumer frequently does not believe in free, even though it's said to be the most powerful word in the marketing lexicon.
2. The second is to offer something that might be quite valuable, but to offer it at a very low cost.
3. The third approach is to offer something with a "complete money-back guarantee" that does not typically come with a guarantee.
The first option might work if you have something that is reasonable. A good example might be a book, an extensive article, or a whitepaper that you have written. To offer that for free would seem reasonable. In fact, this is why many financial advisors write books and articles. There is no question that this is a valid technique and it will work, but what if you have already used that approach?
The low price option deserves a lot of consideration. Since you are in financial services, it should be something relevant. To some people, that very low price has more credibility than if the same item were available free. The perception is "since there is a cost to me, I am under no obligation to make any purchase." However, the payment method must be simple.
One advisor offered a whitepaper on 42 techniques to increase your retirement income. The "retail price" was $11.95, which did not seem out of line. But his offer was to send you a copy for only $1. He did not say to cover postage and handling. That is a gimmick. The postage cost more than $1 just to send his 16 page study. He had collected information from many places, put it all into a Word document, and then printed on both sides of the paper and sent the final copy stapled. The key was his phone call to follow up on the items of greatest interest, items 23 and 31. Nobody remembered which number they were, but many granted him an appointment. One technique was to use auto-deposit and auto-payment to reduce expense, risk, and improve your credit. Remember, he asked for only $1. Everyone has a $1 bill. It is very easy to place a $1 bill into the postage paid reply envelope with the request coupon. Incidentally his grand-daughter did all the processing. Guess who got the $1 bills?
Another advisor did the same thing with a pamphlet he bought from a university. He borrowed the university's prestige and credibility, and paid about $4 each, but the cost on the front was listed as $23 by the university. He offered it for $10. "Just slip your $10 bill into the envelope and you'll receive the book. The full $10 will go to the Alumni Scholarship Fund, and I will send it out to you as my contribution." Naturally, he planned to make a follow-up phone call. In the second edition of the book the university even made a nice reference to him since the university got both the $10 and the names of the purchaser. Now, he is negotiating for them to send to all alumni within 75 miles. The average age of the alumni is 47, and the average income is estimated at $85,000.
But what if you want to offer something directly focused on the issue of retirement? You know that people are afraid of outliving their money. The typical advisor's concern is how much money do you have, what is it earning, and when will you run out if you withdraw a gradually increasing sum? His approach was on the other aspect of that equation, "How long are you going to live?"
So his letter posed that question, right up front. "How long will you live?" Naturally, I do not have the answer. No one does! But there are tools that help establish a reasonable and reliable measuring stick. I would like to suggest the new standard of excellence in life expectancy planning. I have arranged for this report for a single person or a couple, on a very favorable basis. Wouldn't you like to know your number and how to use it?"
He is experimenting with two follow-up paragraphs. One has no cost mentioned. The other has a specific price. But he does not insist on pre-payment -- he carries that cost. The reports come from 21st Services, and he offers to help persons "understand the significance of the numbers and how they interface with their current financial holdings." There is no fee for his interpretation, but the client can then pay for the report fee, which, considering the importance, is quite reasonable. His compensation, of course, comes from providing fee-based planning, or placing annuities, investments or life insurance.
The last item I mentioned was the guarantee. Actually, I would not suggest the use of the term "money-back" since it sounds a bit like a TV Ginsu knife advertisement. You cannot guarantee how long a person might live or how long their money will last, because you cannot guarantee their investment earnings. But you can offer satisfaction assurance. This means that "If you are not 100 percent pleased with the comprehensive plan that is developed for you, you will receive all your money back."
Does it work? Absolutely! I have made this offer for nearly 40 years, and I have suggested it to thousands of financial advisors, some of whom have adopted this technique. To my knowledge, no advisor has ever been asked to return the plan fee.
After all, if you knew that you might have to return the plan fee, you would be sure to produce an outstanding plan and to present it effectively!
But the key is how you reinforce this commitment. I suggest using a satisfaction assurance certificate, printed on fancy "certificate" paper to make it resonate a bit, like the Warranty Certificates that you see with other products. You can customize the text, and select the paper you prefer.
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