This is the 4th in a series of periodic guest posts. Libby J. Dubick is President of financial services consulting firm Dubick & Associates. Ms. Dubick has extensive experience in investment product strategy, marketing, and distribution at Goldman Sachs & Co. and Citibank.
Let’s be honest: there are probably few Marketers out there who believe financial services has anything positive to teach them these days. There’s no question that financial services marketing has received a good deal of negative press recently. But whether it’s during economic upswings or recessionary times, there’s one aspect of marketing where financial services marketers may be ahead of the curve: the importance of trust in the selling process.
Different Types of Trust
A University of Virginia Darden School of Business study identified two types of consumer trust:
- “Competence-based” Trust is the confidence that a company has the knowledge, skills and experience required to provide a service. This is foundational–without it, there’s no chance that a customer will choose a firm. It’s necessary, but not sufficient.
- “Benevolence-based” Trust is the belief that a firm will put the client’s interest first. While this might seem self-evident, the recent actions and behaviors of individuals and firms–e.g. Madoff and pyramid schemes, out-sized bonuses for bankers taking TARP funding, etc.–certainly suggests that this can’t be taken for granted.
Both kinds of trust are required as consumers expect expertise and available knowledge before purchasing a product or service (for more on brand transparency, see “Why Your Brand Needs to be “Open & Transparent”).
After the market collapse of 2008 and the Madoff scandal, many financial firms and advisors have dedicated the last year to winning back consumer confidence, respect, and trust. And many of these financial advisers did just that–they retained clients and maintained their referral flow, keeping their business healthy and vibrant, despite the most toxic economic environment since the great depression.
What Can All Marketers Learn From The Best Client Advisors ?
- Listen to Clients — Smart advisors don’t assume what their clients want or need – they ask them. While this interaction should occur all of the time, it’s particularly important when markets decline. This is basic Marketing 101–staying close to your customer in good times and bad–but always bears reinforcing.
- Be Responsive — Many advisors made a point of returning all client calls on the same day, and not when it was convenient for them. Research conducted by the Spectrem Group, which surveys high net worth investors, found that responsiveness is the most important service attribute (even more than advisor knowledge or overall client satisfaction). Do your clients find themselves contentedly speaking with a helpful and empathetic employee, or trapped in telephone tree? Reaching out to your customer when times are tough is exactly the time they need it most — and builds trust and confidence.
- Demonstrate Expertise — When economic times became rocky, financial advisors that sent weekly updates to their clients became their primary source of financial news. Through newsletters, email blasts, and website updates, these advisors were able to shape and color their clients’ knowledge base and perception. As an expert, news about your company or industry should come from you – or you risk allowing others to shape your customers views.
- Be Transparent — Financial advisors have added pricing and process to their annual reviews to ensure clients understand fees and value added. Too many consumers have experienced a sales promotion that offers very little merchandise, or purchased an item online only to find “handling” charges that inflate the price. Marketers who want their products and firms to be viewed as trustworthy are open and transparent and don’t play those kinds of pricing games.
- Ask Thoughtful Questions — Then listen to the answers. A prospect may never have the knowledge to evaluate how good of an adviser you are, but the questions you ask will tell them a lot about how sincere you are and, ultimately, whether you are trustworthy. Customers want to feel like they’re valued–and one way to value them is to ask them questions that show you care.
Financial services firms have a lot of work to do to regain the public’s confidence and trust. Buried within every major financial services firm, however, are financial advisors who have demonstrated to their clients that they can be trusted.
They do this by listening, being responsive, demonstrating expertise, being open and transparent, and asking thoughtful questions. In today’s digitally connected, always on world, where consumers are more empowered than ever, these are actions that all Marketers can benefit from–whether in financial services or any other industry.