Building an entrepreneurial mindset
There is no question that the financial services industry is in for a rough period over the next few years, but we need to have an entrepreneurial mindset in order to survive it.
Change is inevitable. Either we create the change or change is forced upon us, and this is something we have seen with the Life Insurance Framework.
Having goals and a vision for the future allows us to create the amount of change we want to have in our life and our business. It’s when we don’t have goals or that vision that change is forced upon us. I have spoken to many advisers over the last few months and they feel ‘stuck’ and struggling to work out how they can prosper going forward.
For those of you who are in this situation, I hope this article can inspire you to think differently about your business and use these regulatory changes to create an entrepreneurial mindset and build a great business model that your clients will pay you for.
Let me ask you some questions to get you thinking.
- What has happened to your ability to differentiate on the basis of the product?
If you are like many of the advisers who have been in the audience when I have asked this question around the country, you will say that it has disappeared. The products on offer by most of the life companies are very similar with only a few differing benefits or features. I think most people agree that the ability to differentiate based purely on product is gone.
- As an adviser (or BDM), how do you differentiate yourself from the competition in your market place?
Again, if you are like many of the advisers I have spoken with, much of their current service offering is similar to that of their peers. Many say that they differentiate on claims process and support, which I agree is a critical component; however, how many of your clients actually claim? What percentage of your client base will get to experience your differentiated offer at the time of claim?
If this is the case, what are you doing and how are you adding value to all of your other clients? This is what we need to begin to think about. The answer to this really lies in the answer to these next two questions.
- What kinds of challenges and problems do your clients have that are not related directly to the sale of product?
The answers to this question provides you with the key to unlocking your potential as an adviser (and BDM) and in creating real value to your clients outside of the product.
When I have asked this question of my audiences when presenting around Australia and overseas, I hear things like “my clients have health problems”, “family problems”, “job problems”, “money problems”, “confidence and self esteem problems” “and many have problems in their business”.
These answers open the door for us to explore a whole new range of services that you can begin to think about providing your clients, which will enable you to think about packaging up additional services and charging fees for assisting the client in plugging these ‘life’ gaps.
- The final question I ask is: How do you help your clients solve problems that are not directly related to the product and, by doing so, enhance motivation and support for the product so it's win/win?
The answers to this question relate directly to what I have mentioned above.
Unfortunately, a very large portion of our industry has been living in the red ocean. This is the red, murky, bloody, shark-infested waters we have all become accustomed to. We have all been circling each other, taking each other’s market share and competing on price.
'Blue ocean' thinking by comparison is about focusing on uncontested market space. Uncharted waters. The focus is on innovation. When you live in the blue ocean, you see what everyone is seeing, yet you're thinking what no one else has thought!
There is no better example I can give than to look at a classic blue ocean strategy, and that is Cirque Du Soleil. They have looked at a traditional industry (circus) and looked around the fringe of that industry and packaged up the best of those other industries (acrobatics, theatre, concerts, carnivals, etc) and developed a brand-new model and, in doing so, found a new set of customers that were no one else’s customers already.
How can you use blue ocean thinking to disrupt your market place and create a new model so that you attract a brand-new set of clients? The strategy lies in the answers to questions three and four above.
To begin thinking about completely reshaping your service offering is going to take an entrepreneurial mindset and a new way of thinking. Let's quickly explore the traits of an entrepreneur:
- Opposition, challenge and obstacles are seen as opportunities to change your current processes and methodologies. You see, diamonds don’t look like diamonds in their roughest form. They look like rocks. Most people never uncover the diamonds because they all come disguised as hard work. Use these reforms to uncover diamonds in your business.
- Entrepreneurs have an unwavering urge to overcome setbacks, defeats and failures and turn them into multiplier breakthroughs. The research has said time and time again, that even those with low IQs but who have an ability to overcome defeats, setbacks and failures will go on to achieve extraordinary levels of success. Make a decision and a commitment today to turn these challenges into multiplier breakthroughs. Have resilience. Bounce forward.
- The changes in the industry are seen as opportunities to create new value for others and advantages for themselves. Entrepreneurs see the opportunity that lies within every difficulty.
- Entrepreneurs recognise that standing still and doing nothing in a fast-changing world is the same as going backwards and dying. Get a plan to move forward and start immediately. Get back in the driver's seat and take back control.
Why the time is right for change
Every industry is slowly becoming commoditised and quickly being disrupted. Old industries are being destroyed and new ones are being created. Look at what iTunes has done to record stores. What Uber has done to taxis. Airbnb has done to hotels and what robo-advice is doing to financial services.
- Disruption occurs through differentiation and by offering a higher level of value to the customer.
- Clients and customers find the new way of doing business transformative.
- The new way of doing business adds significantly more value and results in the sale of wider product sets.
- Business results begin to multiply exponentially.
Start thinking about what you can do to repackage your current offering so that you start to differentiate yourself from all of your competitors in the industry. You create disruption and, in doing so, protect yourself from commoditisation and living in the red ocean.
There is no question that financial services is in for a rough time over the next few years. To survive, we need to be entrepreneurial in our thinking and take back control – and you can do that by applying some of the thinking that I have outlined above.
Vicki Writer is the founder of The 360 Solution
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