Five truths: How your marketing can recession proof your business
By Tyler Hoffman, FMA
Truth No. 1 — All sales professionals are perceived to be the same.
They're lumped together, just another broker, adviser, planner or agent. They're a dime a dozen, one on every street corner.
There's one word turning the financial service industry upside down: Commoditization. The public perceives a sameness in the product and services we offer, which is fine because we all offer similar products and services.
People buy differences, not similarities. That says to me if people buy differences, not similarities, that the last thing in the world you want to do is to look just like everyone else. So, your challenge today is simply this: What are you going to do to separate and differentiate yourself in a very crowded marketplace?
Truth No. 2 — Traditional advertising and marketing no longer work.
How many of you would agree the things you used to do to prospect that once produced results are no longer producing the same results? Of course. It's tough today. We need new ideas.
Let me illustrate. Let's look at the traditional methods most of you built your business on. First, cold calling. Did anybody like that? You would rather sit in an ice cold shower ripping up crisp new $100 dollar bills than go out and make a cold call.
Well, good news — cold calling doesn't work nearly as well as it once did. Plus you have the do not call list with over 134 million people on it. I'm not saying you can't go out and cold call, smile and dial and make a living. I'm just saying why on earth would you want to when there's much easier ways to generate new business. How about direct mail? The response rates on direct mail are the lowest they've ever been. Do you realize they call a home run in direct mail if your response rate is ½ of 1 percent? Now think about that. We're calling a method of prospecting successful if 99 ½ people out of a hundred throw it out and don't respond. The costs to do direct mail keep going up, while the response rates keep going down. The response rates on direct mail are so low you could almost build a case why you would never want to do direct mail ever again.
What about seminars? How many of you would agree seminars used to work very well until everybody started doing them? The public is seminared out. You're spending more and more money sending out more and more invitations that are attracting fewer and fewer people and the people that do show up are not that qualified. They're pretty much there to eat your free food. We've created the professional doughnut eater.
Truth No. 3 — Trust is more important today than ever before.
No sales occur unless trust is present. If you only get paid when you make a sale, and no sales occur unless trust is present, then it sounds to me like trust has just become a crucial component in your marketing.
See, in the 80s and 90s, it was product driven. You didn't have to worry about the things you have to worry about today. Let me illustrate. When it was a product driven marketing strategy like the 80s and 90s, trust accounted for 10 percent of the sale. The next 20 percent was qualifying. How deep are your pockets, and how long are your arms? Thirty percent of the sale was presenting, and the major focus, 40 percent of the sale was closing. Close early, close often and close hard. That was the old way. That no longer works today. New way:
When we go from product driven to relationship driven, 40 percent of the sale is trust and rapport. You need to move from product pusher to trusted adviser. Do you know the difference?
Salespeople push products. Advisers recommend solutions. When I don't perceive you as a threat, I put all my cards on the table. It's easy for you to identify my needs and problems because I don't hold anything back. I say, here's our situation, so what should we do? Once I've identified your needs and problems, then I take my experience and come back with solutions to your problems. Closing is just the next logical step once you've done a good job of making the sale of you.
It's like going to a doctor. You trust the doctor in his white coat. He takes your temperature, asks you where it hurts and he provides a prescription, a solution to your problem. When the doctor tells you how to fix your problem, you don't even think of second guessing him.
Truth No. 4 — Marketing has moved from product driven to relationship driven.
What does the consumer buy first? Think about it. There are only three things your prospect could buy first. They could buy you first; they could buy your product or service first; or they could buy your company first. So, given the fact that it's a relationship sale today, it's pretty obvious that the first thing the consumer buys is you.
Which means how they feel about your product really boils down to how they feel about you. If they feel good about you, chances are pretty good they'll feel good about your product. That's the importance of making the sale of you. Truth No. 5 — People buy first emotionally and justify later with logic.
Common sense would say if people buy first emotionally, we want to touch them first in an emotional way. Then please tell me why most of us still sell logically, while readily admitting they buy first emotionally? It doesn't make sense to me. If people buy first emotionally, we want to touch them first in an emotional way.
So how do we do that? We involve as many senses as we possibly can in the marketing we deploy.
Let me share with you one of the things I've learned. It's a shorter distance from the head to the heart than it is from the head to the wallet. If you can get me to buy in emotionally, then the wallet follows the heart every single time.
There's a principle in marketing that says, the more senses you involve in your marketing message, the stronger the message is, and the longer the message lasts. We need both of those things today. We need strong powerful first impressions because they're forming first impressions within four seconds. Second, we need lasting impressions because it's a long sales cycle.
As the economy slows down, your marketing is going to need to take an extra focus. By putting to use these five truths, you will deliberately make your business recession proof.