I recently “lost” a fee negotiation with a firm in a position to send me a lot of repeat business. They asked for a 5% discount. I gave them 10%.
I lost some revenue, but here’s what I gained: Their trust.
I can’t place a value on that.
Competence and benevolence
Mr. Brodie, a specialist in behavioral economics, discussed some of the key takeaways in his book in a recent interview you can read here.
Brodie notes the difference in the level of trust consumers have in doctors and financial professionals. Patients rarely probe the credentials of their doctor. Instead, the conversation focuses on how the doctor can alleviate the problem presented by the patient.
According to Brodie, the nature of the doctor-patient relationship permits the doctor to score much higher on that second, and more important domain, benevolence.
By demonstrating a high level of compassion, the physician earns the trust of the patient.
Preoccupation with expertise
Brodie notes a high level of distrust in every aspect of the financial services business, despite the fact that members of the industry are generally perceived as highly competent. The perception of competence alone doesn’t inspire trust.
This preoccupation with expertise can be counterproductive. Brodie states: They (financial advisors) speak about their competence in every colour of the rainbow, in very specific detail, but they convey very little benevolence.
Once you are aware of the need to demonstrate benevolence (and lighten up on touting your expertise), how do you that? Here are some suggestions:
Show vulnerability: We’ve all made mistakes. When you show vulnerability, others can relate. Instead, advisors often project supreme self-confidence.
Demonstrate trust: You want the prospect to trust you, but do you trust them? Consider starting work before you have a signed agreement. Take a look at your standard agreement. Would someone reading it get the impression you trust them? If not, reword it. Make it clear the client can terminate the relationship at any time. Loosen some of the obligations. Above all, write the agreement in plain, understandable English. Don’t make it all about protecting you.
You can only gain trust when you first give it.
Resource of the week:
I recommend you read this interview with Herman Brodie.