When it comes to buying a product, most are relatively straightforward to evaluate. They have a physical presence that can be examined. We can ask others who have purchased and still have the product what they think of it. And there are usually many ways to assess quality. With a service, on the other hand, what the prospective client buys is intangible, and the service provider – like the financial planner – is effectively forced to “sell the invisible” to a prospective client.
Accordingly, Harry Beckwith’s book “Selling The Invisible” tackles the interesting challenge of how best to sell an intangible service (like financial planning)… with the conclusion that in the end, because there’s no real way for most consumers to evaluate the quality of a service or the depth of someone’s expertise in the first place, the driver in the end is usually not about the skillset of the financial planner. Instead, decisions are often made based on far more “mundane” factors like whether the prospective client feels a personal connection and relationship to the advisor, to even simple details like how the advisor dresses, the look of the office, or the way the receptionist answers the phone.
On the one hand, the fact that an advisor’s actual expertise may rarely be the deciding factor in whether he/she is fired may be dismaying to some. Yet on the other hand, the reality is that the factors that prospective clients may rely upon instead are generally under the advisor’s control as well, and there aren’t even that many (the firm’s website, the person who answers the phone or greets people when they enter, the physical office, etc.). And in the end, Beckwith makes the key point that ultimately the real challenge that advisors face is not convincing clients to work with them over other competitors, but simply that it’s worthwhile to “buy the invisible” instead of doing nothing at all!