When a football coach positions his defense, he spreads players over a wide area. Some line up to the left of the ball, others to the right. Some take stances near the line of scrimmage, others away from it. Many cluster near where plays most often come, a few scatter to areas of less action but more risk.
Why is that?
A client needn’t be Vince Lombardi to understand that because a football defense can never be certain where a play will go, a coach positions his players to cover a range of possibilities. And if a client understands the reason for defensive schemes, then he needn’t be Warren Buffett to grasp the importance of investment diversification strategies.
As those few sentences illustrate, one of the most engaging — and insightful — ways for financial professionals to connect clients with concepts is through the power of story selling.
A simple definition of story selling is that it uses something a person does understand to help him comprehend something he doesn’t understand. When presented only with data and statistics, clients quickly grow numb to numbers. In contrast, any adult who’s ever answered a child’s plea to “tell me a story’ sees the sway storytelling holds.
Called the most important form of human communication, storytelling seemingly is coded into our communications DNA. A good story employed in a sales situation should capture a listener’s attention, build a speaker’s credibility and impart a message that’s understood better and remembered longer.
We’ve all been subjected to speakers who drone on with facts and figures. Face it, attention spans are evaporating before our eyes in today’s world of smartphones and tablets. Overloading someone with details before you have even captured their attention is a dead end for engagement.
The makings of a good story begin with events or items familiar to your audience. A sharp financial professional connects with a listener. Drawing on the commonplace, he uses metaphors and creates analogies that clarify the complex. To that end, a good metaphor doesn’t require more than a few sentences to make its point.
Just what is it about the human brain that makes story selling so effective? As the table below shows, there is a contrast in the functions of the two sides of the brain. With the left side, we speak the language of knowledge. With the right side, we speak the language of wisdom. The left brain desires details while the right brain needs the big picture. The left requires factual information but the right seeks emotional understanding.
The brain naturally balances logic and intuition, covering both sides of the decision-making process. Story selling appeals to the right side. It puts content into context. And incorporating it into your client interactions helps you create complete communication.
Clients feel a stronger bond to someone who serves as a teacher, bringing concepts to light in a creative and compelling way. That’s why story selling is a key part of the consultative, relationship building approach clients desire and require. It appeals to clients intellectually and emotionally, increasing understanding, stirring the imagination and supporting comfortable decision-making.
For instance, clients often encounter differing advice on the merits of active versus passive investment management. Here’s an example of a story that may help a client begin to consider the approaches.
Think about driving during rush hour. Some drivers jump from lane to lane trying to beat the traffic, only to discover that sometimes they choose a faster lane and other times a slower one. Other drivers simply go with the flow, sticking with one lane and spending less effort in the process. Traffic is what it is. All lanes go the same direction. Continually changing lanes can be tricky.
Well, an index-tracking investment holds its lane. Considering the historic long-term direction of markets in general, index tracking doesn’t try to “beat” a particular market, it simply tries to “be” that market. Thus, it’s like driving at the speed limit on cruise control.
What makes better sense to you?
Most people naturally understand the daily world around them much better than they understand the financial world they only occasionally consider. Don’t ignore the side of the brain that helps clients process your financial communications. Story-selling helps engage clients by framing technical knowledge in familiar language and scenarios. It helps clients obtain clearer understanding … which can lead to an increased comfort level … which can result in more readiness to act.
Starting a discussion of diversification with talk of assets classes, correlations and more, or initiating a conversation on investing by going straight into growth versus value orientations and active versus passive styles, can immediately overwhelm and intimidate clients. And a rough start may pose an insurmountable obstacle to a productive and beneficial exchange.
As a financial professional, the use of story selling can open a conversation and create a complete communication approach. Starting with stories and finishing with facts will make for a happy ending to your sales efforts.
Diversification neither assures a profit nor eliminates the risk of loss.
Indexes are unmanaged statistical composites of stock and or bond market performance. They are not available for direct investment.
Investment return and principal value of an investment will fluctuate, so units, when redeemed, may be worth more or less than their original cost.
Investment products distributed through Touchstone Securities, Inc.* W&S Financial Group Distributors, Inc. and Touchstone Securities, Inc. are members of Western & Southern Financial Group.
An investor should carefully consider the investment objectives, risks, charges and expenses of the investment found in the product and fund prospectuses. For prospectuses containing complete information, visit Western & Southern Financial Group Distributors Resources. Please read the prospectuses carefully before investing.