Buying vs. Selling
My husband recently got a new computer. It was a high-end, gadgety-type laptop, if I can describe it as such, which he loved—in theory. Unfortunately, the software was new to both of us, so he needed some help setting it up. And, as it wasn’t an Apple product—we already have one of those—he needed help synching his contacts, pictures, etc., between his iPhone and the new device.
When he later called an expert at the store where he bought the laptop, that person told my husband there were all sorts of things he could help with, but first my husband needed to buy a three-year service package that would determine whether his brand-new computer had spyware on it (unlikely) and if that was the reason he was having trouble connecting his phone.
Skeptical of the immediate need to buy a service contract, he wrote down a list of questions he wanted to address and starting calling other experts. He eventually found someone who understood his needs and helped him get the answers he sought, which led to a follow-up conversation about other services that expert provided. That person, and his company, has already become our go-to resource. The company is helping us manage old computers we had hanging around at home—those we kept solely because of the photos and/or music left on them—and has already cleaned up our network, making sure all our devices “play well” together. Having taken the time to help solve the initial problem, that person has quickly become our trusted adviser for all things technological.
You’d think this would be common sense: People should choose to purchase something they want, not be sold something they don’t. However, it’s amazing to me how often that is not the case—and not just in the technology industry.
Recently, I was privy to a day of final presentations in a small plan’s recordkeeper search. The adviser to the sponsor had helped the committee select a handful of providers that were to come and deliver presentations; the names ranged from some of the best-known companies to a few smaller players. It was interesting to see how some presentations were tailored and others seemed, perhaps, off-the-shelf; how some entities had taken the time to do their homework about the plan, its committee members and the broader company before arriving, while others had simply excerpted information provided by the adviser.
As I write this, I don’t know which company the committee selected, but I will note that, from my perspective, some of the companies were selling their products, while others were helping the committee buy the solution that best fit the plan. One sense I did get from the plan committee as it discussed the various providers between sessions was that it wanted a provider that could help it address the specific needs of the company and its plan participants—and it wasn’t particularly interested in a one-size-fits-all approach.
That important distinction is also applicable to you, the retirement plan adviser. The opportunities you have to help plan sponsors and their participants are wide-ranging. Not only can you provide guidance to the sponsors about plan design, provider services and searches, investments and other administrative issues, you can help participants, whether directly, working with outside vendors, or by leveraging resources available through your vendor relationships.
And, although in theory you could use a cookie-cutter approach and treat all your clients the same, are they? The annual PLANSPONSOR Defined Contribution (DC) Survey breaks down the industry, according to both industry segment and plan size, and I am always amazed at the range of outcomes that hide behind the industry averages. For example, the survey found only about one-quarter of plans overall use automatic deferral escalation. However, the percentage jumps to 43% and 52% among large and mega plans, respectively, and shows even more distinctions once you start looking at specific industries.
For those of you who are working within a niche market, and who might argue that your model of treating everyone the same works, I’d still venture that your clients aren’t truly equal, and you should still emphasize how you can help them feel that they are “buying” your services instead of being sold something generic. I assure you that when there is changeover on the committee, any personal touches will help you keep the business instead of having a legacy committee member say, “This is what he gives to all his clients.”
The opportunity is for you to develop a suite of services—and perhaps prices—that allows you to provide each client a unique advisory relationship that builds and enhances your value proposition. Perhaps, as with my technology expert, you don’t need to sell at the outset but listen. Help solve an early problem at the beginning of the relationship that will lead to more business later on—whether you are hired first as a search consultant, then win the whole plan business; begin as the 401(k) adviser, then gain the rest of the retirement plans; or have just the investment advisory piece to start, then become the whole retirement plan’s adviser. Opportunity abounds when you empower your clients to want—and choose—more.