How to increase the perceived value of your advice by Grant Shorten, Director, Strategic Insights, Renaissance Investments The Law of Scarcity

The Canadian investment With such a large supply of financial There are a myriad of intuitive elements, overseers — chasing a finite community of which, when combined, equate to our industry is rife with licensed qualified investors — the advisor of today desirability factor — as measured against finds themselves subject to the very same an investor’s unique set of criteria. Some of professionals who are ready, metaphorical “stuff” as the entrant in a these elements include things like our willing and anxious to sign classical beauty contest. credentials, level of expertise, investment philosophy, rapport-building skills and up the next client. There is no Whether we like to admit it or not, we are points of differentiation. Much has been shortage of capable men and engaged in the business of “attraction.” written about the factors above, so today Naturally, I am not referring to the type of we will step outside of the norm and venture women who have successfully attraction that is dependent upon the latest into a more ethereal world governed by the grooming, cosmetic or fashion technologies, Law of Scarcity. passed the examinations but rather, attraction as it relates to the (somewhat mysterious) “desirability factor.” required to set up shop as The Law of Scarcity and the Investment Advisors, Financial Affluent investors, in particular, have perception of value positioned themselves in the heart of a Planners and Wealth Managers. virtual audience, and tacitly make implied As investment industry professionals, we all judgments regarding the attractiveness and have a fundamental understanding of the desirability of those advisors who venture supply and demand equation, and how scarcity onto the contest stage. plays a primary role in influencing the perceived value of a product or commodity. The Law of Scarcity simply states: Successful marketers understand the Clearly, as investment advisors focused on following simple formula: asset-gathering activities and prospecting If what we desire “appears” to be in limited modalities, we would not be well served by supply, the perception of its value increases Increased Perceived Value incorporating pedestrian catch-phrases like significantly. + A Sense of Urgency “…limited time only” or “…the clock is = BUYING ticking.” However, I believe that there is a Economists will go to great lengths to explain tremendous opportunity to apply the very the mathematical principles controlling this This whole notion of perceived value becomes same underlying principles in a strategic phenomenon, but its practical essence is even more interesting when we see how it and respectful manner. captured above. affects our interpersonal relationships. “The most successful Imagine a couple, named John and Carol, Simple strategies to engage who have been dating for three years, and the Law marketing firms in the spend most of their spare time enjoying world have learned to each other’s company. Before long, John Strategy 1: The principle of begins to take Carol’s love and affection for desired association expertly apply the Law granted — resulting in a decrease in Carol’s of Scarcity in the creation perceived value. Create an articulated advisory “identity” or value proposition, which incorporates both of their sales messages...” Now imagine that same couple, one week scarcity and an implied status-requirement. later, at a cocktail party. John looks across One of the most fascinating aspects of the room and notices that Carol seems to be the Law of Scarcity is the undeniable Examples: paying a lot of attention to a particularly “The advisor to the affluent” “universality” of its reach. The most handsome man near the bar. If John is wired successful marketing firms in the world “Empowering elite investors to take control like the vast majority of people, with even of their wealth” have learned to expertly apply the Law of the remote possibility that Carol may be- Scarcity in the creation of their sales “Partnering with a select group of investors come scarce (in favour of another man), her who are committed to excellence…” messages, and have geared them around perceived value rises dramatically. John’s capitalizing on the emotional code of their introduction to the Law of Scarcity may The Outcome: target audience. Interestingly enough, we even lead to a marriage proposal! The prospective client is quickly moved to will often find that behind the crafted “sales focus on how they may become “worthy” of message,” there may or may not be an So what does all this mean to us, as being included amongst this group. You are actual scarcity of the product or service in investment professionals? question. “Place a genuine self-imposed ceiling on the number of The magic is in the “framing” of the message itself. families you will work with this year, given your current team resources.” You don’t need to go any further than a television commercial or piece of written Let’s go back to the beauty contest, and not just an advisor, but a high-calibre advertising to see the most commonly used to the reality that we are engaged in the specialist — a scarce resource who only semantics incorporating the principles of business of attraction. I think it’s safe to say deals with a select segment of the investing scarcity. that the majority of investment advisors community. The perceived value of your consistently bring to the contest a fairly “…for a limited time only” business practice is immediately and standard set of elements to parade. “…this offer will not last” substantially elevated. “…only 150 units available” Therefore, all things being reasonably equal, “…time is running out” it will be the advisor who can generate the Strategy 2: Changing brain “…offer only valid for today” highest level of perceived value that will win chemistry — scarcity spoken “…first come, first served” the prize. It also pays to remember that most contests are won by a very thin margin of Place a genuine self-imposed ceiling on the Remarkably, even though these linguistic victory — primarily due to that incremental number of families you will work with this techniques are repeated over and over again, difference in perceived value. year, given your current team resources. they remain highly effective in producing the Having done so, make it an essential desired result — a significant increase in Taking some guidance from our friends at component of every prospect discussion to the perceived value of the product or service. the big marketing firms, and from John and articulate that “restriction” with confidence Carol’s experience at the cocktail party, let’s and conviction. You will find it particularly create a parallel to the advisory practice. congruent when executed during your service discussion. Example: “We believe in providing top-notch service and attention to each one of our clients. Our trusted partners receive a fully customized and tailored Service Agreement designed just for them, based on their specific needs, goals and objectives. In order to maintain our highest level of service, we are limiting our practice growth to just five additional families this year.”

The Outcome: This is the Law of Scarcity in its most concise format. When performed correctly, the prospective client is left hoping they are being considered as one of those five fortunate families, and may even seek confirmation by asking the question during the session. The added benefit is the sense of urgency inherent in the mechanism. Remember, the investor doesn’t know how many of the five families have already signed up as clients this year.

Strategy 3: Develop a legendary advisory persona > Maintain a high level of enthusiasm. There along with the full buy-in of the advisory team. All the world’s a stage, so have fun As a devoted, but scarce, resource, create is something magically contagious about with this one as you execute it with respect an “air of legend” around your role, and enlist enthusiasm and it will be transferred to and genuine empathy for your clients. your assistant and other team members to your listener. help maintain it. You can accomplish this by > Choose your words wisely. There is power Ultimately, the Law of Scarcity provides a setting up your practice so that you are in the spoken word. Our words create set of robust tools that can empower you to strategically unavailable for things like pictures, sounds and emotions in the mind take your practice to the next level. They administrative and operational telephone of our audience. Pre-script and pre-plan will supercharge your asset gathering calls, small-talk or dealing with anything your messages in order to create the efforts by captivating the mind and emotions outside of pre-planned meetings and delivering desired results. of your intended audience. powerful portfolio recommendations. The Outcome: I wish you continued success and a deeper All incoming communication and correspon- The creation of a legendary persona is a sense of commitment to your craft, during dence is filtered through your team members, prime example of how we can proactively this RSP season, and beyond. who protect you from functions that are not “design engineer” the way we are directly related to money-making activities. perceived. Affluent investors want to be To discuss ways to increase the perceived value When a prospective investor calls, have associated with legendary characters — of your advice, please book an appointment with your assistant explain that you are “currently advisors who stand out from the crowd. your Renaissance Investments representative in session, but will be happy to call back or call 1 888 888 FUND (3863). when he/she becomes available.” With the Over the years, I have worked closely with details of the message in hand, you will be several advisors who define this strategy able to prepare your thoughts ahead of the and live it every day of their lives. I can also discussion, and deliver them with confidence. tell you that much of its success comes This legendary persona and larger-than-life down to effective “staging” and positioning, demeanour will also require you to enlist the following, in order for you to fully capitalize on its impact:

> Master your physiology. Walk, sit and stand with passion, conviction, confidence This material was prepared for investment professionals only and is not for public distribution. and power. Make eye contact when you The material and/or its contents may not be reproduced or distributed without the express speak and gesture with movements of written consent of CIBC Asset Management Inc. Renaissance Investments is offered by CIBC legendary proportion. Asset Management Inc. ™Renaissance Investments and “invest well. live better.” are registered trademarks of CIBC Asset Management Inc.