Educating Customer

The advisor is always on the rampage to sell his products. And he employs various innovative techniques to increase his sales. He advertises his brand and his products through print media, social media and digital media. He works on his personality, clothes, communication skills and the like. But often, misses out on the most effective technique of marketing - “Educating his customer”.

The advisor is generally valued by his distributor in terms of the value he adds, i.e. higher the sales, the better. Apparently, he is evaluated by his customer on the basis of the return on investment that the customer achieves because of the advice of the advisor. However, the investor might not even sell his investment for the next 10 or 20 years, the profits will only be realized after these years. So how does the customer evaluate his advisor?

In reality the customer, often unknowingly tends to assess his advisor on the basis of the immediate intangible value provided by him. The customer lacks knowledge about the products that you have come to offer him. He might not know what purpose will these products serve, or what are the other alternatives. If you help him understand his need, the product and why is it better than the other options, he will be in a position to take informed decisions. This will yield him satisfaction, and you, his trust, which will help you build a long term relationship with him.

“Give a man a fish and you feed him for a day. Teach a man to fish and you feed him for a lifetime”

If you teach your clients, you will be feeding them for a lifetime.

One of NJ's partners, Mr Chirag Girishchandra Shah, who operating from Nadiad, Gujarat, has gone an extra mile in materializing - “educate your customers”. He believes in providing financial products related education and awareness to clients and with an aim to achieve the same, he shares relevant information with his clients in a quarterly newsletter - "Gujarati Rokankar", which he started in the year 2008.

In his words, “I feel financial literacy amongst us is very low, I would put it like this, 'some investors are not investing their money but murdering their hard earned money'. Many investors around us are very casual; I want to show them the right path.”

By the virtue of his motivation and his efforts to spread awareness, Chirag has been able to create a USP for himself, which makes him stand out in the crowd and the reward for his endeavour is increased sales and massive commissions.

An effective marketing strategy can never be complete without spreading knowledge. You must keep certain principles in mind:

You are not selling what we are supplying, rather you are selling what the client needs. So you have to educate the client in terms of his needs and requirements. He knows only one thing:'I want to earn, and for this I have to invest'. You have to explain to him how your products and services can help him achieve his objective. The customer will be interested in your product only if he is convinced that his needs will me met.

You might have to create objectives for the investor through your experience and insights. The client may not know if his existing investments are suitable for him or not. He might not even realize that he would require money in the future for specific purposes , and that his monthly income may not be sufficient to accommodate those needs. Lets say your client has a mix of FD's, equity mutual funds and government bonds in his portfolio. He also has a medical insurance policy, which covers his family as well. He doesn't have a term plan, and you have to make him realize that he needs it, by explaining the possible outcomes of not having one. You can substantiate your point by narrating anecdotes of your clients, whose families could sail through the storm because of term plans.

When you spread awareness and educate your customer, he will try to reach you again with further queries and seeking advice on other products as well. He will look up to you as his financial consultant, because of the trust and loyalty that you have built in him. And any question or complain from the client is an opportunity to show how good you are.

The most you impart is your product and company, but the customer might be looking for something more. He might want to know about other options or explore other fields. You should explain a broad view of the industry and various products available and how your company or your product is distinct and favourable for him. You may also compare your offering with others' by showing him charts, tables or videos.

The importance of educating the customer is being realized by many, even the TV commercials are becoming customer education centric. SEBI also want mutual fund houses to spend on customer awareness programmes, and recently, the latter has agreed to contribute 0.01% of their AUM towards education.

Your funda should be simple: Educate the customer, so that they should be fully aware and confident about the product before investing in it.