How to deal with difficult clients

I do financial advice for a living, and I meet all sorts of clients…

This experience is about finances, but it’s also a framework to work with difficult clients for any sales professional.

Because…

Who has never had a difficult client?

So…

Once, I got a call from a really worried client…

He was like:

"My wife said I should sell everything I have invested with you and put it all in one of those high rewards savings accounts.” He thought the market was going to crash and a fancy high yield savings account was the safest place.

His wife saw it on Tik Tok…

Of course, we are talking about investing in a 2% to 3% yield here, when his money was still in Mutual Funds with a 9%-10% yield.

Big drop!!

I tried to explain why it's always smart to keep money invested for a long time. And I thought he was convinced, because that was the strategy we agreed upon before.

But this time, he didn't like what I said.

Not only my advice didn't make him feel better, but he got really, really mad.

I even talked about how the stock market has always gone down & up in the past, showing him charts and talking about numbers, but he didn't want to hear anything about it.

After a while, he was still angry and hung up.

Ooops…

After I told my upline about what had just happened, I asked him, "What did I do wrong?"

Here's what we figured out:

Using facts and logic doesn't always work.

At first, it always seems like a good idea to use facts, logic, numbers, charts, profits, when talking to a client. But most of the time, people don't listen to facts and logic, especially when they're upset.

Why?

Well, let's talk about how our brains work.

The brain processes emotions and facts/logic in different ways.

Basically, we have two ways of making decisions:

•          with our emotions
•         and with our logic.

When we're emotional, the emotional part of our brain takes over, making it hard to think logically.

But when we're calm, the logical part of our brain can work better, helping us think clearly and make rational decisions.

Emotions are mainly processed in the amygdala, which is a part of the limbic system in the brain. This region is responsible for generating emotional responses and can override logical thinking when we're feeling strong emotions.

The amygdala is the part of the brain that’s in charge of the well-know “Fight or flight” attitude…

The “fight or flight” response is a natural survival instinct triggered in response to perceived threats or danger. When the amygdala detects a potential threat, it can initiate physiological changes in the body to prepare for either confronting the threat (fight) or escaping from it (flight). This response is crucial for ensuring our survival in challenging situations.

That’s what’s happened to my client…

On the other hand, facts and logic are processed in the prefrontal cortex, which is involved in higher-level cognitive functions like decision-making, problem-solving, and reasoning.

When we're calm, the prefrontal cortex can effectively analyze information and guide our actions based on rational thinking.

So, when we're calm, it's easier to think logically and not let our emotions take over.

But when we're worried or upset, our emotions (say the amygdala) take control and prevent us to think logically.

In other words, when we're feeling emotional, we're not very good at thinking things through.

I saw this happen with my client.

Even though I tried to use logic to explain things, he kept getting more upset.

And the more I tried to explain with facts and numbers, the angrier he got.

I ended up just saying the same things over and over, which -of course- didn't help at all.

But there's a better way to handle situations like this.

When someone is upset, it means their emotions are taking over and they're not listening to logic.

That's what happened with my client.

I was too focused on using logic, and I didn't pay enough attention to his feelings. That just made him even more upset.

So, instead of trying to use logic, sometimes it's better to focus on comforting them and understanding how they feel.

So, when you have angry customers, this is how you need to proceed:

4 Steps to Guide Clients Through Anxiety

Acknowledge Their Feelings:

•          Show empathy by recognizing and validating your client's emotions.
•          Listen carefully to understand their concerns, then reflect back what you heard.
•         Avoid agreeing with false beliefs while acknowledging their emotional state.

Normalize the Experience:

•          Help clients understand that feeling anxious during market volatility is common.
•          Assure them they're not alone in their worries and that seeking guidance is commendable.
•          Normalize their experience to alleviate self-doubt and build confidence.

Invite to Reason:

•          Encourage clients to engage their rational decision-making system by reviewing financial facts.
•          Offer a subtle invitation to discuss their concerns and consider a reasoned approach.
•          Engage in a rational discussion to help clients focus on long-term planning and suppress emotional impulses.

Engage the Rational System:

•          Remind clients of past successes in sticking to their strategy during market downturns.
•          Encourage them to consider whether reacting impulsively to current market conditions is necessary.
•          Invest the extra effort upfront to provide emotional support, as it can lead to more productive and pleasant conversations in the long run.

Ensuring Clients' Stability Amid Volatility

During periods of market uncertainty, it's crucial to prioritize support for anxious clients, even if it feels taxing initially. I've learned through experience that investing a bit more time upfront to address emotions pays off significantly. Rushing into logical discussions without first soothing emotions can prolong the client's distress and hinder productivity.

In a nutshell:

Understanding Decision-Making Systems:

·         Our brains operate with both rational and emotional decision-making systems.

·         When anxiety arises, the emotional system tends to dominate.

The Role of Logic:

·         Surprisingly, logical reasoning can intensify emotional responses in distressed clients.

Starting with Empathy:

·         Instead of diving straight into logic, acknowledge and validate the client's feelings to foster a more constructive dialogue.

Disclaimer:

Investing in financial markets carries inherent risks & uncertainties. While potential rewards can be substantial, it's important to recognize that investments can also lead to losses. As a financial professional, I am committed to providing guidance & assistance tailored to your individual financial goals & circumstances. However, it's imperative to understand that no investment strategy is foolproof, & past performance is not indicative of future results.

Remember, your financial well-being is of utmost importance, and I am here to support you every step of the way. If you have any questions or concerns regarding your investments, please don't hesitate to reach out for personalized guidance & assistance.

Xavier Lannes