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If Oprah Jumped Off of a Cliff, Would Your Clients Follow?

Routinely, we are asked by financial advisors to provide specific examples for the various behavioral biases. On October 19th, we witnessed a textbook case of a behavioral bias we call “Herd Following”. Here’s the story of how $700 million was generated out of thin air by the oracle of Chicago that knew her herd would follow.

Herd Follower (noun): someone who has a tendency to stampede into investments with exuberance and sell out of fear (with a crowd of likeminded people).

On Monday, October 19th, it was announced that Oprah Winfrey was investing $46 Million (a 10% stake) in Weight Watchers International, Inc (WTW). The news of this investment sparked investors to follow driving the stock price up 105% to close at $13.92.

If Oprah jumped off of a cliff, would your clients follow?

If Oprah jumped off a cliff, would your clients follow? If you had any clients ask about Weight Watchers, then yes. Yes, they would follow. At the opening bell on October 19th, WTW opened at $6.78 and the analyst reports were grim. At the announcement of Oprah’s investment, the trading volume of the stock rose 61x its normal rate. This generated $700 million in value for Weight Watcher shareholders, but industry analysts are predicting this is only short term success. This is a textbook case of herd following, an instinctual behavioral bias that influences clients to make irrational decisions.

The breaking news of Oprah’s investment allowed investors to forget:

  1. The company’s stock had lost nearly 73% of its value in 2015.
  2. A recent Duke University study found that Weight Watcher members lose only an average of 5 pounds at a cost of $377 per year.
  3. Sales have declined for seven quarters with executives blaming the popularity of new free apps from competitors such like MyFitnessPal which beat Weight Watchers are usability and price.
  4. There is no clear direction for the future of the program.

 

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Stopping your clients from jumping:

I would bet my money (and that’s saying a lot because I am a saver) on the fact that your clients that are herd following Oprah are also extraverts. Just like these same clients want to keep up with the Jones’ they also don’t want to miss out on a train that is leaving the station (especially not the Oprah Train). As you are dealing with your client, remember that extraverted clients like verbal, (in-person conversations) because this how they learn and how they are most comfortable.

  • Call your client and invite them to lunch or to the office to learn (if you need to, tell them Oprah will be there kidding).
  • Tip: Have your extraverted client bring a friend. They are excellent networkers and would love learning about the market with friends or family.
  • Explain what the Jones’ are doing and how your client can get on board.
  • Leave the industry reports behind: Don’t drown your client’s in paperwork. Keep the conversation light at first and make the conversation fun and exciting with lots of animation.

Want a more intuitive and predictable approach to manage your client’s emotions? Try Financial DNA and ask your sales consultant about the Financial DNA Behavioral Management Guide.

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How Do I Get People to Listen to Me?

Do you understand the words that are coming out of my mouth?

1998 Rush Hour movie starring Jackie Chan and Chris Tucker

How many times have you been in a situation where you were trying to communicate with someone and it felt you might as well have been talking to the wall? I remember explaining a concept to a client using a PowerPoint and the client didn’t hear a word I said because he was focused on how he didn’t like the color scheme on the slide.

60% of communications fail because communication styles and preferences are not aligned. Based upon 1999 Stanford Research study.

Our brains are hard-wired to process information and learn a certain way. Most people accept this by now due to the volume of research on the topic. However, we can learn how to adapt to different communication styles to increase our effectiveness.

Sales increased 17% just by a salesperson mimicking the communication style of a potential customer. Harvard Business Review

Our research has identified that most people have one of 4 primary communication styles: Goal-Setting, Lifestyle, Stability and Information. There is a lot you can learn about people and how their brain processes information:

  • Learning Style
  • Communication Preferences
  • Information needs for Decision-making

Iceberg picture

With this knowledge, you can make some simple adjustments to how you approach a person to help them absorb the information, understand why your communicating and ensure they take away the points you feel are important (the ability to influence them.)

8 Simple Tips to Adapt Your Communication Style for Others:

If you are interacting with a Goal-Setter primary communication type:

1. Start with the End Goal in Mind – What is the purpose of the interaction and how does it connect to your audience’s goal (what’s in it for them?) Use bullets and executive summaries to convey more information with fewer words. Details can be provided after the summary if needed, but Goal-setters don’t read long emails/blogs or sit through long presentations.

2. Provide Options – If you only give them one recommendation or option, you will most likely get pushback or a “no.” They want to be able to make a choice. They will likely want to discuss it.

If you are interacting with a Lifestyle primary communication type:

3. Explain Who is Involved -Being more relationship-focused, their brains first have to understand who is involved, their role, how they fit into the discussion and what they may think about it. They also respond well to social events and informal communication methods.

4. Use Visuals – Rather than send a long email or written instructions use a picture, infographic or demo to better help their brains process the information and retain it. They need to experience it to learn.

If you are interacting with a Stability primary communication type:

5. How You Say It Matters – The right tone is especially important for this group. They prefer supportive and low-risk interactions and solutions. Email may not be the best choice, but if you do send an email, be very careful to consider them as a person and how they might perceive it or “feel” about it.

6. Slow Down and Reassure – They like to be thorough and appreciate step-by-step instructions. They want to be very comfortable and sure of their actions before they act.

If you are interacting with an Information primary communication type:

7. Stick to the facts – They prefer to primarily focus on tasks/results and do not necessarily want a lot of social interactions. They tend to be logical, want to “get to the truth,” and understand “why,” therefore, they are more comfortable when they have more details, information, and research.

8. Don’t Try Appealing to their Emotional Side – I repeat, stick to the facts, policies and procedures, and the logical explanation. If you try to sway them with name-dropping, leverage office politics, oversell a concept with marketing hype or appeal to their emotional side, you will actually repel them, not influence them.

What’s your communication style? For more information on the research, how it works, or how to apply this knowledge, contact inquiries@dnabehavior.com.

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Difficult Conversations After a Confidence is Broken

Managing Difficult Conversations in the Workplace

The President of a company called together his senior executives and announced that the CEO had a heart attack. The CEO was hospitalized, but after surgery he was expected to make a full recovery. The President insisted on complete confidentiality until he had more information to share.

The President was a wise man. He was formal, systematic in all his dealings, good at analyzing information, a man of integrity, thoughtful and well respected.

His Head of Marketing left the meeting feeling confused, a sense of instability, emotional, and concerned. He immediately used social media to encourage all his friends to think about the CEO and believe for a fast recovery. The Head of Marketing was empathetic and warm. He was a person who needed stability and a calm, predictable working environment. He was very well liked, very good at his job and had a wide network of friends and business contacts.

Four Primary Communication Styles Graph

Directly after the meeting, the President received a call from the media asking for a comment; the company share price dropped 10%. The next call was from the Chairman insisting the source of the leak be found and fired.

The news of the CEO’s heart attack was now only 3 hours old; the potential fall out to the business (and the family) was significant.

The President recalled his executive team kept them standing and insisted the culprit own up immediately. The Head of Marketing owned up and the remainder of the team left the room.

The President immediately put the Head of Marketing on notice saying, “I instructed you to keep what I told you in confidence. That means you agree to keep the information completely, totally secret and not to repeat the information without permission.” He continued, becoming even more analytical in his communication, “asking someone to keep a confidence is a solemn contract. You broke it.”

The Head of Marketing tried, without success, to respond. The President left the room leaving the executive confused, bruised (metaphorically speaking) and devastated that he had acted so inappropriately. His first reaction to the news was driven by feelings and a loss of certainty about his future. He’d given no thought to the family or the consequences of such news reaching the marketplace.

Communication Differences Relationship Performance

The reality of the situation is that the President and Head of Marketing were operating from their natural zone and they did not have the awareness to adapt.

Had both parties understood their inherent communication and behavioral styles this would have been a different scenario. The President would have emphasized the potential market risk. He would have understood the inherent behaviors of some of his team. He could have stressed the importance of not bringing emotions into the situation. The Head of Marketing would have understood his own reaction to the challenging news. He would have realized he’d be concerned about the potential loss of stability and safety in his environment and known how to manage his reaction to the news.

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  1. Set a structured agenda and have prepared questions.
  2. Meet in a more formal environment in the office.
  3. Expect yes/no answers.
  4. Offer details and analysis.
  5. Avoid abstract ideas in communication, and keep to specifics.
  6. Present the research performed to come to the specific conclusion.
  7. Provide case studies as examples rather than having a high-level, conceptual discussion.
  8. Show the risks are minimized (not eliminated) in the recommendations.
  9. Say what you are going to do and then do it. Be very transparent.
  10. Provide them with newsletters and books, economic information.

How we handle responsibility for our decisions, as well as our mistakes, is a direct reflection on our character. However, without insight into our inherent communication and behavioral style we do not know our default reaction to a situation such as the Head of Marketing faced.

 

The Harsh Reality About Communication Styles

The Harsh Reality About Communication Styles

“We treat you like you’d treat you”. This commercial gained tremendous popularity for one reason: for effective service you need your communication styles to match each client’s unique style.

I like transactions that are easy, effortless, and fun. Save me some time and the aggravation of not having to wait in a long voicemail “queue” and I will reward your firm by sharing my positive experience at every opportunity.

But how would a customer service employee know that about me if they haven’t had frequent interactions with me? And furthermore, what difference does it make?

The hard-edged, measurable results are that you will get more business. According to Gallup research, 23% more business to be exact, from me and from my referrals.

A few weeks ago, I needed to call customer service at a major financial services firm. Like many of you, I was dreading having to even make the call. Why? Long automated menu selection, not even having the option that I need to select, then having to figure out how to get a “live” person, and then going into another “queue” that informs me I am calling at a high volume time and my anticipated wait time is five plus minutes.

“Really?!”

Then, after the wait, I finally talk to a service person, only to get the wrong information. I had to call back two more times (and yes, go through the queue again) before I received the correct procedure.

I certainly shared my experience on the satisfaction survey I received the next day. I guess it is no surprise that no one has acknowledged the poor service or tried to assure me that they want me to have a better experience next time.

How many calls come into the typical customer service center on a daily basis? 1,000 plus! The way I see it, a firm gets 1,000 plus opportunities to build and strengthen client relationships.

If you are relying only on customer surveys to gain intelligence on how to create a unique customer experience rather than learning how to customize communication styles, you will be left behind by the competition.

To provide unique customer experiences from the very beginning, you need the right behavioral information at your fingertips. So bring the solution to your firm so you can say with confidence: we treat you like you’d treat you.

About the author:

Peggy Mengel – Senior Consultant, Human Behavior Solutions Advisor

Peggy Mengel has spent 30 years helping financial services firms build deeper, stronger and more trusting client and employee relationships. With an understanding people before numbers approach. Peggy helps you navigate the human differences in your business to create sustained success. Armed with behavioral intelligence, you will be able to attract and retain the right clients, empower your team for authentic productivity, and enjoy a 23% boost in revenues. Read more