Advised sales - are they better for financial services?
 In the past week I've been asked at least three times which is best - advised or non-advised sales processes. And each time I have answered advised. Given the UK general insurance industry seems to be rushing down the advised route this has caused much surprise. This is followed by being asked to explain myself.
Let's start with understanding the difference between the two. Non advised sales are little more than order taking. The customer is expected to know what they want and so our agents ask a few questions designed to do little more than take their order. If they ask questions about whether they should go for option a or b the agent must decline to offer an opinion and instead explain the difference between them. It is vital that they do not offer anything that could be considered advice.
Compare this with an advised sale. The adviser can ask ask questions that are designed to understand the needs of the customer so that a product can be matched to them. That process - when done well - is all so important.
Asking questions that go beyond simple order taking gives the customer confidence that the person they are talking to is confident and knowledgeable. It creates the impression that the business is at least trying to understand them and help them. With greater flexibility in the type of language and sales techniques that can be employed the adviser is in a stronger position to control the sale and drive it home.
Sales performance can benefit from an advised process, but in ways that can be counter intuitive. In some classes of business it can improve, particularly where there are different options to choose from or the target market is more specialised. In others the number of sales has decreased slightly, with this being offset by lower cancellations in the cooling off period and longer policy durations. Sales can certainly be lifted again as the advised process matures and becomes a more natural part of business.
Advised selling should have another benefit to the firm in the nature of the relationship with it. I have written before about how the culture in insurance has been moving towards buyer beware. Consumers are starting to act accordingly, seeing every claim that's turned down as an example of how the industry rips people off, not matter how legitimate the reasons. An advised sale, if backed up throughout the rest of the business with a renewed air of professionalism, could protect the firm from this as products are more carefully sold to consumers in a way that encourages relationship building.
Advised sales will not be for everyone. Some firms will prefer to follow what could be seen as the less risky option of taking orders. Those that do decide to return to this model will see benefits both in short term sales performance and longer term customer relationships.
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