Salespeople always like to highlight that they have a specific “style” when they sell a product. Some like the “soft sale” approach, some might prefer the “hard sale,” and there are many other options that achieve desired results. It has always impressed me that very distinctive approaches can yield similar returns. And, we all recognize this phenomenon when we look at the sale’s rankings within our respective firms. I once worked with an extremely successful wholesaler who I did not get along with. He had a very aggressive personality, and I was convinced people did business with him just to get him out of their office. But, his technique worked for him. Why? Because it matched his personality. He knew who he was, and he wasn’t about to reinvent himself in an effort to cater to his Advisors. Regardless of what I thought, it worked for him, and he was consistently on the leaderboard.
Perhaps, we should add a new element to the sales process and be concerned with the Advisors’ “buying” style. What gravitates them to purchase an investment product? We can all look at the same product and use different justifications to buy that product. Some might buy a Rolex watch because it keeps excellent time, and others might buy it because it is a status symbol. These are entirely different buying rationales, and the quicker we realize them, the easier the sales process will be. It is challenging to position a Rolex as a status symbol when the individual doesn’t seek the attention of others. So why do Advisors add an investment to their portfolio? Once we learn this, we know what talking points to use when we position a product.
One of my favorite questions to ask an advisor is, “What was the last product you added to your portfolio, and what attracted you to the product?” While this might seem like a very open-ended question, it should reveal their “buying” style. When you ask this question, you will most likely hear two different responses:
- Their decision was primarily based on data. They liked all the numbers associated with the investment – past performance, standard deviation, beta, star rankings, manager tenure, etc. While other factors might have been a consideration, the underlying data was their “north star.”
- Their decision was based on something thematic. They gravitated towards the investment based on some forward-looking investment thesis where they thought it aligned with the opportunity to better position the underlying portfolio. For example, they believe inflation is going to spike and want a defensive portfolio.
An Advisor’s buying style tends to match their personality. Some advisors are very quantitatively oriented, and others might lean to being more traditionally “sales” oriented. In other words, they like to sell, and they like the underlying story associated with the investment. In a perfect world, you have a product that can match both personalities. When I was at Virtus, we had an emerging market fund that had lights-out numbers. But, there was also a thematic story behind the fund – it was heavily invested in consumer discretionary stocks that focused on India’s demographics. The rationale was that consumers in India were getting wealthier, and they would have more discretionary income to spend. We had the stats to back up this thesis, and it was a very compelling. Some Advisors just looked at the numbers, others gravitated towards the thesis, and some used both to justify adding it to their portfolios.
Next time you are trying to position an investment to an Advisor, ask them, “What was the last product you added to your portfolio, and what attracted you to the product?” This doesn’t mean you will need to alter your selling style, but it should provide some hints in what talking points you should be using in an effort to ensure they are interested in your product.