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Every advisor wants to increase their conversion rate of prospects to clients. But few understand there’s a formula to help them accomplish this goal. Here it is:
E => ROxy
Michael Mauboussin: Challenges and Opportunities in Active Management And Using BAIT #MICUS
ROxy => L + T
L + T => C
I will explain each of those variables, but first let’s look at the key factors that underlie a high conversion rate.
You have choices when you meet with a prospect. You can assume the role of an educator and lecture the prospect about your firm, your investment philosophy and why you would be a prudent choice.
Or, you can elicit information with the goal of genuinely getting to know the prospect as a person.
This choice has profound ramifications, as Judith Glaser and Richard Glaser explained in an article published in the Harvard Business Review. At one extreme is the impact of negative comments (like criticism from a boss) on brain chemistry. These comments cause our bodies to produce high levels of cortisol (often called the “stress hormone”). Cortisol is produced in the adrenal glandsand helps regulate blood pressure and the immune system when you’re confronted with a physical or emotional attack.
A Coach and Speaker Who Will Increase Your Conversion Rate
My evidence-based persuasion strategies have significantly increased conversion rates for my coaching clients. I use videoconferencing, which is very cost-effective. I also give on-site presentations and am available to speak at conferences and internal meetings.
To see videos of presentations I have given, please click here.
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We tend to dwell more on negative comments than positive ones. When we do so, we cause a prolonged release of cortisol, which can last for 26 hours or more.
Engaging a prospect in a manner that causes a release of cortisol will have a negative result.
Positive comments also produce a chemical reaction. According to the Glasers, “they spur the production of oxytocin, a feel-good hormone that elevates our ability to communicate, collaborate and trust others by activating networks in our prefrontal cortex.”
Generating feelings of trust and collaboration is (or should be) the goal of every interaction with a prospect.
Tips for raising oxytocin and reducing cortisol
The Glasers described conversation behaviors that produce oxytocin and others that generate cortisol. The single, most effective way to increase oxytocin is to express concern for others. Other behaviors in this category include being truthful, showing curiosity, being open to difficult discussions and painting a picture of mutual success.
Significantly, the Glasers noted that one of the leading ways to increase the release of cortisol was to focus on convincing others. Other behavior having the same effect included not trusting the intentions of the other person and “pretending to be listening.”