Compared with the maturity of most American industries, the defined contribution industry has just passed through adolescence. Over the last decade we’ve witnessed significant milestones that have improved plan quality for employers and participants alike — from the migration to open architecture, to plan enhancement provisions offered through the 2006 Pension Protection Act, to the ability of advisors to act in a fiduciary capacity, and most recently, fee disclosure.
Each of these milestones has provided substantial selling opportunities for retirement advisors that stay ahead of the curve. Retirement consultants have leveraged their ability to offer more and better fund choices, lower costs, improve participation rates and share in fiduciary responsibilities to win over new plan sponsor clients.
But eventually these more structural improvements in our industry become commonplace —commodities that are to be expected by the consumer of our services.
Focus on Outcomes
Only in recent years have outcomes become a focus of the retirement advisor community. And rightly so! After all, what good are all of these enhancements if in the end, as an industry, we cannot deliver on the promise of retirement security for American workers? Isn’t that ultimately the whole reason we exist?
While I’m aware that to some degree I’m preaching to the choir, from a prospecting and sales perspective, the challenge is that previous advancements in our industry like those mentioned above are in a sense more tangible, while “improved outcomes” is a concept — an aspiration that’s difficult to quantify. So, while many advisors might talk to prospects about improved outcomes, there is often a continued reliance and relentless focus on the “3 F’s” (fees, fiduciary and funds) when prospecting and selling plans. Not to say that these are not important. They most certainly are. But as our industry progresses, inevitably so must how you communicate your value as stewards to retirement plans.
The simple fact is that our country faces a monumental retirement crisis. A preponderance of American workers is simply ill prepared financially for retirement.
As professional retirement plan advisors, you’re on the front lines of that challenge. So the question is, are you selling a service, or are you an advocate for a cause? How are you perceived by prospects and clients? How would you prefer to be perceived?
Passion, Conviction and Authenticity
Presenting metrics and capabilities as your value proposition requires salesmanship. Selling a concept such as your ability to utilize those tools to improve outcomes is an art form.
When working with advisors on prospecting, one concept I emphasize is “PAC” — “passion, conviction and authenticity.” So how do you weave PAC and a sense of advocacy into your sales process?
It starts with how you describe who you are and what you do when introducing yourself to prospects or centers of influence — how you set that stage will dictate your entire sales process, differentiate you as a professional and define how you are perceived by potential clients.
To illustrate my point, I would ask you to watch just the first five minutes of this quite famous video of Simon Sinek. If you've seen it before, please watch it again.
Applying what Sinek has codified, the way you communicate your mission might look something like this:
• Why we do it — We believe that American workers deserve the ability to retire with dignity as a reward for a lifetime of service to others.
• How we do it — We champion this cause by working with employers to implement, direct and monitor comprehensive retirement benefit strategies.
• What we do — We manage company retirement plans.
Sinek correctly defines a principal that is central to the consultative sales mindset: “People don’t buy what you do; they buy why you do it.” If you put three retirement advisors in a room, all of whom offer roughly the same capabilities, the one that is far more likely to win the plan will be the person who displays the greatest degree of PAC. This is a universal truth in consultative sales. People can and will be “sold” on metrics and capabilities, but it is much easier to achieve this objective when they are inspired by you as a person.
It’s important to recognize that most employers don’t implement retirement plans thinking about outcomes. They do so because of employee demand or because of their interest in attracting and retaining quality workers. Of course, that’s not the ultimate purpose of a retirement plan, so sometimes beginning a conversation by addressing why a plan exists in the first place is a good way to get the employer thinking more in terms of objectives. From there, you can build — using the 3 F’s as supporting elements in achieving those goals and your role as the advisor in keeping the plan on track.
As our young industry continues to mature and evolve, so will how you sell the value of the services you provide. In my humble opinion, we are finally moving into the era of evidence-based selling, where hiring decisions will be determined and measured primarily by your ability to demonstrate your impact on outcomes for others. Your skill in effectively qualifying your value proposition beyond the 3 F’s will need to reflect this change. When done effectively, it can and will pay handsome rewards.
For more information on selling strategies, visit my website or email me at [email protected].
