“When you come to a fork in the road, take it.”
The late Yogi Berra could easily have been describing the challenge of working with people who find it difficult to make a decision. As an accounting professional, you are often working alongside clients to help keep them in compliance with tax laws. Getting agreement might be easy. However, you may be proposing strategies, such as retirement planning, where the benefits won’t be realized until far in the future. But clients and prospects often hesitate. Why?
Why Do Clients Delay and Delay?
After surveying and interviewing financial advisors, six main reasons surfaced as to why clients put off making decisions.
1. Fear of the unknown. This is the No. 1 reason clients hesitate. When clients are asked to consider investing money they can’t get back intact and on demand, they worry about what could happen. They recall a time in the past when they took advice and committed money to something they didn’t understand. That worked out badly. They don’t want to make the same mistake twice. If your suggestion involves money going into the stock market, people are often of two minds: If the market is doing well, then it can’t last. If the market is doing poorly, things can only get worse. They fear losing money.
Strategy: They need to understand the strategy. Why is it good for them? What’s the time horizon? What’s the desired outcome? What could go wrong? How does time work in their favor?
2. No sense of urgency. The 30-year-old business owner sees retirement in the distant future. There’s plenty of time to plan. He has a desire to leave things as they are. There’s no sense of urgency.
Strategy: Einstein considered compound interest the “eighth wonder of the world.” (Who said accounting was boring?) If that growth is tax-deferred, even better. Suppose a client thinks retirement is far, far away. Give him an example of how time passes quickly. When he started college as a freshman, did graduation seem far off? When he was awarded his degree and looked back, did four years seem to pass quickly? Here’s another helpful expression from the property market: “You don’t wait to buy real estate, you buy real estate and wait.”
3. Too many choices. Many clients freeze up when faced with too many choices. As professionals, we want to show the client all the options and let her make a choice. This might be easy with two alternatives. What happens when you present the client with several courses of action and she doesn’t fully understand each one? People who don’t understand usually don’t buy.
Strategy: You’ve worked with executives. You’ve heard the expression “cut to the chase.” Telling your clients that you considered eight options is sufficient. You usually don’t need to describe them unless they are really interested. They want to hear your best recommendation. Let them know you considered the options, and present the one you feel they should follow. Stepping away from executive conversations, a softer way of saying “Here’s what I think you should do” is “Let me make this easy for you.” Everyone wants things to be easy.
4. Doesn’t understand your value. Suppose your prospect doesn’t see the value you provide. Millennials are known for transacting business online and eliminating the middleman. They wonder why they should pay you for something they can do themselves. When a service is commoditized, people seek out the cheapest provider.
Strategy: Client wealth comes in many forms. Money is obvious. What about time? Are clients prepared to give this project the attention it deserves and take responsibility for their actions? If they are investing, it’s their obligation to watch their holdings. However, if they work with an investment professional, both you and their advisor are likely meeting with them periodically (separately) and reviewing their progress. This level of attention has value.
5. In another relationship. Suppose your prospect is in another relationship. People who are “married but looking” got into more trouble than they imagined when the story about the hacking of the Ashley Madison database broke this past July. Some prospects may already have an accountant, but are shopping around.
Strategy: You follow the Golden Rule of “Do unto others … .” You don’t speak badly about his current accountant. Logically, you establish yourself as the alternative: “I’m sure you are very happy with your current CPA. If anything ever changes, give me a call.”
6. Lack of trust. Movies and TV feature “crooked accountants.” Clients worry about confidentiality. They feel they won’t be getting personal attention. They don’t see a big difference between having their personal taxes done by their own accountant or using a tax-preparation service.
Strategy: Here’s another scenario where the prospect delays because he doesn’t see value. If integrity is an issue, lean on the reputation of your firm. Highlight longevity. It’s likely something makes your prospect’s situation unique. Perhaps he owns a franchise restaurant. Do you specialize in his field? What issues are specific to his situation that a generalist wouldn’t understand as well?
Prospects and clients delay making decisions for several reasons. Understanding those reasons can help you lessen their anxiety.