CPD: Believe and understand your WHY

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Nearly every business will say WHAT they do, but rarely do businesses say WHY they do WHAT they do.

Successful businesses tell their market why they are in business, how they do business and what they do – in that order. This is contrary to most marketing approaches. Drawing on the work of American author, speaker and marketing consultant Simon Sinek, DomaCom explores how this approach to marketing can benefit advice practices.

Every organisation has a reason for being. Every organisation has a why. However, according to Sinek’s philosophy, most organisations focus on the what (what you do) and how (how you do it) to attract and retain clients, rather than focusing on the why – why are you in business? Why do you and your staff come to work every day? Why should people engage with you, become your clients, be loyal?

The Golden Circle

This concept is best explained by Sinek’s ‘Golden Circle’, illustrated in figure one. Stemming from a belief that people don’t buy what you do, instead they buy why you do it, the Golden Circle turns a typical product or service centric marketing approach on its head. Successfully defining your why is a crucial element when defining your business and will help you build a loyal client base. This is particularly pertinent for high involvement service based businesses, such as financial planning practices.

According to Sinek, when most organisations communicate about their business from the outside in, from what to why. This is probably because the what – the tangible – is much easier to articulate than the intangible why.

Nearly every business will say WHAT they do, sometimes they will say HOW they do it, but rarely do businesses say WHY they do WHAT they do.

 

 

WHAT

Each of you reading this knows WHAT you do. This is true of any business, irrespective of size, industry or geography. Everyone in your business can easily describe the services you offer, the products available and their role in the business. Everything that comes under the what banner are generally the easiest elements to identify.

Similarly, as a customer, you can look at businesses you work with and readily identify the what for each. In the wealth management industry, you can identify the providers of products and services; software, investment and insurance products, platforms, education, news…an almost endless list. For each of the businesses you work with, there are many others offering the same or similar ‘what’. Think about their marketing, communications and sales pitch – what comes first? Usually it does!

HOW

Good businesses and people know HOW they do WHAT they do. Sometimes called a unique selling proposition (USP), the how is generally used to explain how your services are different from, or better than, your competitors. Although many marketing approaches will suggest that being able to define your value in terms of how you deliver your service and how you are different from competitors will help you stand out and attract business, according to the theory of the Golden Circle, it’s not enough.

WHY

According to Sinek, very few people or companies can clearly articulate WHY they do what they do – and when they do, it’s often an afterthought, rather than being central to the business’s communications. The why is all about your purpose, cause or belief – it’s why your business exists. Although your what and how may change, your why – the core belief that underpins your business – should always stay the same.

The why should not be expressed in terms that include your service, products or clients. Saying things like “to be the best…” or “to offer the highest quality advice” or “excellence in all we do” are not whys. Importantly, the why is never about making money – like excellence, service delivery and product quality, money is the result of what you do, not why you do it.

In Sinek’s words “People don’t buy what you do. They buy why you do it.”

Why does the Golden Circle work?

This approach works because it interacts with different sections of our brain. Sinek explains that the neocortex is the newest area of the brain, and differentiates the homo sapien brain from other primates. The neocortex processes the ‘what’ – it is responsible for rational and analytical thought and language. The neocortex enables us to examine facts and figures, but it doesn’t drive behaviour. For purchase decisions based on price and features, this is the part of the brain that is activated; for example, comparing mobile phone plans or electricity companies engages the neocortex.

The limbic brain is responsible for feelings, such as trust and loyalty, and is responsible for behaviour and decision making. It is where the emotional connection takes place, which is why it is associated with the how and why. ‘Gut’ decisions come from the limbic brain.

When we communicate from outside in, prospective clients can understand facts and figures, but it doesn’t control behaviour and decision making. When we communicate from the inside out, we’re talking to the part of the brain that drives behaviour and decision making, and then allow those prospects to rationalise with facts and figures.

Why, how and what in action

Case study one

Using DomaCom as an example, here’s Sinek’s Golden Circle in action, moving from the inside out as recommended.

Why

To help people build and protect their wealth by enabling investments in high value diversified property assets (residential, commercial and rural property as well as infrastructure, energy and affordable housing assets across different geographic locations) to be broken down into bite sized pieces.

How

DomaCom created a technology solution for a traditional investment market. Its fractional property investment platform democratises property investment, making it accessible to a broad range of investors. Property is no longer an all or nothing proposition – DomaCom’s platform heralds a new era for property investment.

What

DomaCom makes property ownership accessible to thousands more people in Australia and beyond. Using its proprietary fractional property investment platform, DomaCom combines online property listing with an online liquidity facility. Fractional investment will open and improve the market, and help investors and their advisers achieve their goals more efficiently and with lower risk.

Case study two

As a second example, a fictional financial planning practice using the Golden Circle to target millennial investors.

Why

To create a generation of financially independent individuals.

How

Through the delivery of tailored advice and a range of carefully curated investments, the team works closely with each client to enable them to realise their financial goals.

What

Deliver quality financial planning advice, and recommend appropriate investments, that help millennial clients realise their dreams of home ownership, social responsibility and financial freedom.

Building a loyal client base

‘If we want to drive transactions, we make a pitch. If we intend to build loyalty, we make a friend.’ Simon Sinek.

Loyalty comes from connecting with clients and prospects on an emotional level. If this doesn’t happen, as soon as someone else does the same thing you do, but a little better, you’re at risk of losing the client or failing to engage the prospect.

Loyal clients will pay their fees without baulking, refer their friends, and give you the benefit of the doubt – especially at times when markets are volatile and investment returns have their inevitable challenges. Loyalty is an emotional connection – we are loyal to the brands, companies, and people we connect with on an emotional level.

According to research published by the American Marketing Association earlier this year, there are five factors that drive brand loyalty:

  1. Dependable –delivers to, or exceeds, expectations and delivers consistent experiences
  2. Better – perceived as better than competitors
  3. Social media – seen to have interesting and engaging content
  4. Light emotional connection (LEC) – described as “makes me happy”
  5. Heavy emotional connection (HEC): described as “connects with me emotionally,” “makes me feel inspired” and “has a purpose I believe in”.

Use the Golden Circle to structure your business and DomaCom to provide diversification for income and growth

Think about how you communicate with clients and prospects about your business. Do you tell them what you do and how you do it? You’re not alone. A quick scan of financial planning websites shows this to be a common approach.

To use the Golden Circle in your business, get your team together – after all, each member needs to buy in to the why.

Think about the core purpose of your business – is it aligned with your communications? Is it articulated on your website, in brochures and other marketing collateral? Once everyone understands the why, it’s much easier to communicate the how and what for your business.

Importantly, a well expressed why can help build trust and loyalty. Trust is imperative in this industry and will help engender loyalty. People don’t buy what you do, they buy why you do it. Why do you do what you do?

 

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