Commodity versus Advice

On the train one spring morning to London I met three very interesting ladies who made me think about financial advisers or, in fact, any salespeople who want to differentiate themselves from their competition, so let me share with you why.

These ladies are from Indonesia and live and work in Gloucester. They were dressed immaculately and were chatting and being excited about their trip to London. Being the day before Easter, the train was packed with day trippers looking forward to a day in London and I expected these ladies to be doing the same.

“No, we’re going to the Embassy to vote for our President”.

“Oh” I looked surprised.

“Yes”, the lady opposite me explained. “We could vote by post but we prefer to make a day of it, do some shopping, attend a show, and enjoy each others’ company as well as vote”.

And that got me thinking about financial advisers and their competition. You see competition for financial advisers is not other financial advisers, it’s the internet. But some see it as competition, some don’t. Those that fear the internet and see their products that they sell as a commodity.

And that’s dangerous. The internet sells commodities really well and will be more and more effective at this over the next few years. If you see yourself as a salesperson of a commodity such as a life assurance, health insurance, pensions and such then you are doomed. Doomed to be discarded in favour of the internet that’ll sell this much better than you, and cheaper too.

Now my ladies on the train could have voted by post but preferred to enjoy the attractions of London – shopping, seeing a show.

In the same way a client meeting a financial adviser will enjoy what they have to offer. Professional advice, consultation, listening to their goals and problems and then advising them from a plethora of products which ones would help them achieve their goals or solve their problems.

Many people will prefer to buy these products quickly and painlessly on the internet, but equally many will prefer the longer advice version.

So be crystal clear as to what you sell. Commodities or advice. And then ensure your clients know exactly how you work right upfront to overcome the internet objection that will rear its ugly head later. And remember you’re in business to understand your clients first and foremost. Your job is not to sell products but to understand your client’s position, so invest in your skills this year and next to do this even better that you are right now.

Maybe the internet can give advice in the future but it will not be automated, this can’t be one. This is what will happen in the future. Your hologram will be transported to the client via the internet, saving you physically travelling to them.

The technology is there right now to do this, but it costs a small fortune. The internet can transport holograms – pop stars and politians are doing it now. Robbie Williams was beamed to a concert recently, Prince Charles was beamed to a conference last year, and CEOs of major corporations are using this technology to hold important summits without leaving their homes.

But at the moment it’s too expensive for everyone.

In 5 years time we’ll all be using the same technology but it will still be you that is giving the financial advice the client needs who prefers to get from you rather than buying the commodity over the internet.

So beware that you don’t slip into commodity selling.

And my Indonesian ladies, they were really looking forward to their mini break in London. Poor me – I was on business.

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