In case you are wondering if I have got the headline right, I assure you that I have (even though I was writing this post pretty late in the night).
Several years ago, I read an interesting story in Dave Trott’s book “Predatory Thinking”. The story has always stuck with me, and it made a lot of sense to share it with you considering the topic I was writing about. The story goes as follows.
Dave was having lunch with an advertising agency executive Alan Thompson, who told him something very interesting.
Dave wrote, “Alan’s dad is 80 years old. When the weather got really cold, his dad turned on the central heating. The boiler fired up, but the radiators stayed ice cold. The house was freezing. He had to put on an overcoat, gloves and scarf. He could see his own breath indoors. For an elderly person, this is serious. So, his dad went through Yellow Pages and found a plumber.
The plumber came and started doing his thing. He quickly figured this to be a very old boiler. Then the plumber walked around and felt all the pipes. Eventually he took out a hammer. He hit one of the pipes two or three times and waited.
The pipes began to warm up. Then the whole house gradually got warm.
The plumber said, ‘There you are. It was an air lock in your pipes, that’s shifted it.’
Alan’s dad was super grateful. He said, ‘Thank you very much. How much do I owe you?”
The plumber said, ‘Nothing.’
Alan’s dad said, “But I must pay you for fixing the heating.’
The plumber said, ‘No I can’t charge you for just hitting a pipe with a hammer.’
Alan’s dad insisted that he take something. To which the plumber said, ‘Look, this is a really old boiler. With luck it will get you through the winter, but you will probably want to replace it soon. All I ask is that you let me quote when you do.’
Afterwards Alan asked his dad what he was going to do.
His dad said, ‘Well I don’t think I will bother getting any competitive quotes. I mean, even if they are cheaper, I don’t know if I can trust them. I know I can trust this plumber; he didn’t rip me off when he had the chance. I will just get him to do it.’
What a brilliant piece of marketing thinking.
The plumber was not looking to make a quick few bucks. He was building his brand. He’s worked out how he is different versus his competition.
Which is: he is an honest plumber; you can trust him.
He invalidated all the competition for a much bigger job, without even a pitch. And he has a client who is doing his word-of-mouth advertising for him. How brilliant is that.
Well, the plumber above is indeed an honest and trustworthy one. He is not like the many FinTech’s, TechFins and the giant institutions in our profession and industry who induce investors with direct plans and then rip them off with stuff they (investors) don’t even need. Sorry I digressed a bit.
Did you even think for a minute “That’s great for him, but what has this got to do with us?”
First and foremost, this is a brilliant example of differentiation and positioning yourself in the minds of your prospects and clients. And second you don’t do this by talking. You do this by doing and making prospects and clients feel a certain way about you. Trust me you can’t fake this. It has to come from within. As I have written earlier, we are in the financial care industry, and we need to demonstrate genuine care.
Like Alan’s dad, your prospects and clients should be able to say, “this person is the one I need. I can totally trust her/him. She/He will take care of me better than anyone else.” Well, you can update or replace these lines with any of your liking.
In the hyper competitive business that we are in with absolutely no barriers to entry, anyone can become a mutual fund distributor or for that matter a financial advisor. The question is, “Are you the best in what you do not just here but globally?” Even if you are not, are you even aiming for it?
Ric Edelman, Founder of Edelman Financial Services (now known as Edelman Financial Engines -the largest independent RIA firm with 1.3 million clients) said, “you don’t differentiate on the basis of ‘my portfolio is better than your portfolio’ or on ‘my financial plan is bigger and better than yours.’ You don’t even differentiate on the basis of the types/number of products or the different types of investment strategies you offer (however proprietary they may be).
You differentiate on the basis of what your clients have not thought about.”
What Ric is essentially saying is that you differentiate by making your clients think. A great way to do that is by asking real good questions but this is a topic for another day.
You can differentiate on the basis of how (and how much) you care for a client.
You can differentiate on the basis of how you make someone feel.
You can differentiate – by helping your clients understand how much is enough…by helping them live the life they have imagined with their money…by helping them grow their life with their money..
There are so many ways to differentiate your firm. And I am not saying that it is easy. Many in our industry/profession still struggle with it. What seems like a differentiator to us is not really one in the eyes of prospects and even clients.
A powerful differentiator is a source of immense competitive advantage. When you have one, your clients can see how you are not only the right one but the best one for them and their families. Needless to say, these firms grow way faster than firms without one. Every firm thus needs to have one. If you don’t, it’s important to invest your time and energy now to GET ONE in place. Because without a real differentiator, the only thing you can wish for is that your clients don’t ever cross paths with world-class real financial professionals.
If you do have one, I would love to hear about it.
The best ones will get a surprise gift.