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If you organize initial meetings with prospects to leverage what you know about them, you are much more likely to convert them to clients. Consider this hypothetical example.
You are a small but thriving advisory firm with offices in New York and Los Angeles. The New York office receives a call from a wealthy widow. She has inherited $10 million and wants to discuss retaining your firm. She lives in New York and would like to meet at your office there.
But all of your advisors in New York are men.
Several of them have the right credentials to handle an account of this size. You have one, less experienced advisor in Los Angeles who happens to be a woman. Do you fly her in and have her lead the meeting, or do you go with one of the male New York-based advisors?
To answer to this question, consider the research concerning “source similarity.”
Source similarity refers to the likeness between an advisor and an advice-taker. The role of source similarity in converting prospects into clients is obviously important to advisors. It’s also the subject of an interesting study by three marketing professors based in Singapore and Norway. Their study is titled On the Persuasiveness of Similar Others: The Role of Mentalizing and the Feeling of Certainty.
It’s generally accepted that source similarity has a positive impact on gaining trust and buy-in. There are various explanations for this effect. One theory holds that people similar to us have similar preferences, which makes their advice more “diagnostic.” Another view is that we are inclined to “like” people similar to us, so we follow their advice in order to remain connected to them.
The purpose of the study was to determine if there was a more general explanation that involves the way the advice-taker processes the advice being given. The authors posit that, when there is source similarity, the advice taker has an increased perception of the advisor’s mental state. They concluded that “similarity creates a perception of such an understanding, and induces a feeling of certainty (i.e., a feeling of knowing), which validates the advice as a decision input, and increases persuasion.” They refer to this process as “mentalizing.” Mentalizing is defined as “the act of trying to understand the mental states of other people.”
Mentalizing occurs in the context of an advisor speaking with a prospect because, in order to process the advice, “an advice-taker first needs to be able to understand the adviser’s mental states.”
In one study, participants were asked to evaluate a fictitious digital single-lens-reflex (DSLR) camera. They were told to read an evaluation that another participant in the same study had written about the camera. They were provided with enough information about the other participant to determine whether this person was similar or dissimilar to them.
They were then asked to express their own opinion about the camera, after responding to questions geared to elicit their feelings about the other participant (such as “the participant shares my taste and opinions regarding the camera” and “I like the participant”).
The study found participants felt more certain after reviewing the opinion of a similar participant. It also found they deemed such advice as “more subjectively valid.”
Here’s the bottom line:
Similar advisors are likely to be more persuasive to a prospect.
I would fly in the advisor from Los Angeles for the meeting with the wealthy widow.
Dan Solin is the director of investor advocacy for the BAM Alliance and a wealth advisor with Buckingham. He is a New York Times best-selling author of the Smartest series of books. His latest book is The Smartest Sales Book You'll Ever Read. He limits his sales coaching practice to advisory firms that advocate evidence-based investing.
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