INTERVIEW

Eric Hirschberg, CEO, Echo Finance

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Eric Hirschberg is a highly experienced financial salesperson, who has a huge amount of wisdom he was keen to bestow in this interview. Eric’s curiosity regarding how people buy and the way transactions work has lead to some fascinating sales philosophies, and his concept of “product-agnostic selling” – effectively understanding a potential client’s problem, then taking that away to create a solution, regardless of your own current offering – is unique in this interview set.

Eric’s interview is a must-read for anyone considering brokerage, financial services, or financial advisory, or indeed anyone who puts their individual clients at the heart of their sales strategy.

You can read Eric’s full biography here

Eric Hirschberg: Everyone needs to understand that sales is part and parcel of the negotiating process. Almost any interpersonal transaction involves a certain amount of sales, or something you want or something the other person wants, and I think that’s key. I think the interesting thing is having reflected on sales, there are different types of sales and each requires a different skill, but there are some that cut across all sales. I would say the one thing to keep in mind in sales is that it’s not about how you sell something, but it’s about how you process “no.”

It’s all about how you process “no,” because I think in transactional sales; you sell a car to somebody, and you probably won’t see that person again for many years. You may never see him again. It’s all about transacting a specific item, and that requires a certain sales skill. Then if you think about financial sales, if you think about the guys who are in private wealth or in broking, they’re trying to develop ongoing relationships for multiple transactions.

It’s more about selling relationships. A lot of people who do transactional sales have a harder time in the concept of relationship sales because the client just keeps coming back. So, if you’re just trying to sell that thing that you want to sell, you’re ultimately going to fail if it’s a relationship because what you’re really trying to do is figure out what the other person ultimately wants, and then see if you can give it to them. I think that’s a slightly different mentality that one has to have. 

I think the main thing is how you process “no” because you’re in the process of building relationships. You’re going to get a lot of rejection, and it’s how you embrace rejection and what you do with it that defines whether you’re going to be good at it or not. People who internalise and personalise rejection tend to not do well in sales because they’re too busy with their own egos, “It’s about me, it’s not about the other person.”

If you told me, “I don’t want what you have,” that opens up a conversation for me, and that makes me interested in finding out what you do want, right? Then we can establish a connection, whereas there’s a lot of people who will internalise that and say, “You’ve rejected me. I can’t believe it.” You know, they’re downtrodden. I see “no,” as a really necessary component of getting to “yes.” People who say yes at the first instance, they’re just trying to get rid of you.

“I need you to stop trying to sell me something. I’m just going to say ‘sure’, but when you call the follow-through, I’m not going to answer your calls and your emails.” If there’s one thing salespeople have to have, its empathy, but I think most importantly, it is asking questions and having a curiosity about what the other person wants, as opposed to what you want.

There’s an older theory of sales which is this domination sale where it’s about winning. Not about how much money you make, it’s about getting them to enter into a transaction at all costs, and it’s about winning. That’s the old investment banking model. That’s the old competitive model. I don’t think that’s a good relationship model. I think it tends to be rather short-lived. Ultimately, you do not understand what the other person wants.

If you were to look at financial sales, probably the most important thing to a financial relationship is understanding the other person’s risk tolerance. If you take them over their risk tolerance, they’re not going to be happy, and they’re going to be worried. If you take them under their risk tolerance, they’re always going to think, “Well, why couldn’t you have done better?”

For financial products and financial relationships, it’s all about determining those little edges, their risk preference, and finding out where they’re comfortable. It’s like, “Can I give you as much return as you can tolerate taking?” which is the same thing as saying how much risk you are comfortable with. 

There’s a comfort point over which you can’t go. Trying to sell everybody the same financial plan is easier for a salesperson because they don’t have to do as much work. What you’re trying to do there is you’re trying to shoehorn people into what you want, as opposed to figuring out what they want, and you can do that.

Some salesmen are very successful telling people about things they don’t want, but then ultimately that’s a short-lived relationship. The problem with financial services sales is – the problem and the joy is – the client keeps coming back. They’ll sell them something and get rid of them and take your check and go home, but now you’ve established relationships.

Having the ability to embrace “no” and then understand what that objection is a good thing. We always like to hear “yes.” “Yes” is the best, right? If it’s “yes” and they’ve got a pen, and they’re signing each deck, great, but “no” is a very close second-best in terms of results, because it allows you to say, “You know, listen, I know you don’t want this, and I respect that, but can you do me the favour of explaining why you don’t want it, and maybe I can learn something from that process, and I’d be really honoured if you’d spend a couple of minutes with me to explain that.”

After some time, that will turn into a sale.

And the worst one is that, if you read Cialdini’s book on influence (“Influence: Science and Practice”), he says 11% of people are incapable of saying no. A lot of times, you’ll play the numbers game, and you’ll go out with two meetings on your pipeline per day, and talk to a hundred people, trying to sell them a solution looking for a problem. You’ll be left with 11 prospects, having seen a hundred, who won’t say “no” no matter what. You’ve got these 11 people that are going to waste time forever. You go to a meeting, and they’ll be like, “Yeah, let’s talk about this more,” and you’ll leave and you’ll say, “Well, that’s one of the best meetings I’ve ever had.” Next thing you know, you’re fired.

That’s the nature of it; if you’re too busy thinking about yourself and thinking about what it is you want, you’re not going to figure out what people want. Whenever you see a new product, my first question is, “Who asked for it?” Somebody should have said, “I have a problem,” and your product designer should say, “Oh, I have a solution.” That’s good. You have a client, right? So, that’s your first client. Then it’s really the other people; seeing if that same problem exists in the world and other places, and whether you can identify that and identify the client. 

I think selling is an interaction between the buyer and the salesperson in a way that is often not respectful, meaning that often, I think the salesperson sees the buyer as the target and a means to an end. Whereas I believe that the buyer is as important in that transaction as the salesperson. They have a part to play. They can shut you down. They can push you away. They can accept you. You can learn from them, or you can walk away having accomplished nothing.

When you sold books door-to-door; that’s a numbers game, right? You basically had a product, and you went to sell it. The first couple of rejections people tend to checkout, but you said, “I’m going to persevere.” You got your first sale, and you thought, “This is great. I can keep doing this,” and you probably found a pattern that you could exploit, then that allowed you to figure out pretty quickly who was going to be okay with it and who wasn’t, and you can play a large numbers game. That’s the consumer product sale. A one-time transaction, you’ll never see that person again. They’re not going to say, “I need another version of encyclopaedia;” that generally doesn’t happen.

Relationship sales is a little bit different because it’s establishing that relationship. I think it requires a certain amount of empathy, but at the same time, there’s a line that you can’t cross because you’re not trying to be that person’s friend. You have an objective, and you need to figure out if there’s something that you share in common and where you’re going to go with that. If there isn’t, then you should not push it. It’s not your job to convince them otherwise, right? At that point, I think it’s your job to figure out what they do want, then, maybe you can refer them to someone else. 

Jamie: What drew you to the relationship side of sales?


Eric: I’m a platform person. I think of everything as a puzzle. I guess the thing that I’m curious about is how people make decisions. What is it? What’s the decision process look like? If you’re managing assets or you have a product, everybody is in sales, because ultimately you’re serving somebody. I think what drew me to that part of it is just trying to understand motivations and relationships. When I was young, I started out in brokering sales, it was pretty easy because my clients were financial and they had “Chief Investment Officer” stamped on their head, and you knew they had somebody else’s money to allocate. 

When you’re talking about selling to individuals, it’s a lot harder because they don’t necessarily have to do anything. It’s not their job to make a transaction. Some people will never transact. Some people will always transact. Some people are purely transactional. Some people are purely relational. I think that is the higher-dimensional problem; in trying to figure out what people want, how they go about making those decisions – be really curious about that, and that is a really good entrance point to sales.

I would argue good sales is the same as business development. It’s a continuous process of understanding the person on the other side of the table and seeing if you can get some empathy with them; to get them to open up to you about what it is they really want whether or not you can deliver it, and to be honest enough to say if it’s something you can’t deliver.

Take the chameleon salesperson, who gets you to buy the thing he wants to sell you by morphing whatever he has into the need that you profess. He’s very good at listening, and he hears you. But then, ultimately, he’s trying to shoehorn you back into his problem. Those people can be very successful. But again, it’s a transactional type of relationship. Sales relationships are all about understanding people’s motivations, their objections, and not being afraid to take a no. Take “no” as an opportunity to get to “yes.”

You have to be willing to face your own demons in terms of, “Am I being rejected? This person does not like me and blah, blah, blah.” You have to put yourself aside from that and really put yourself into their position as opposed to what you want. I’ve read articles that say ego is a very important thing in sales. You have to have a lot of ego and but it has to be transactional. I kind of think it’s the opposite. I think you have to get the other person’s ego and you have to put yourself in his shoes.

My philosophy of selling is a product-agnostic selling, it’s about understanding problems. I think it’s successful. I think it’s the way to go. I think there are many different ways to approach it, and it depends on the personality. I think somebody’s who is ego-centric is never going to get into this methodology well.

If you’re advising people on who really want to go into sales, I think they have to do their own strength inventory and then figure out what kind of salesperson they’re going to be. They need to realise the shortcomings of whatever method they’re going to use, as well. My method of problem-solving for the individual is not very good for car sales.

 You may establish a relationship with somebody over the years, but it’s going to be more transactional. It’s going to be more about getting him into the Ford Taurus that you have in the lot, rather than a Chevy Impala that they really want. That’s it. I think that’s a bit different. In financial services, though, the sales cycle is an ongoing relationship cycle, its longer and just continues and continues.

Jamie: Say you have a target and you have a solution, but you know it’s not right for the person. How do you feel good about it even if the sale doesn’t happen?


Eric: Well, I think there are a couple of things. One thing, if you’re really good at it, all the times the potential buyer walks away, they will give you a referral to somebody who would be more suitable. Second of all, a lot of times if it’s an organisation, you may simply have found yourself talking to the wrong person. If somebody is saying “no,” it’s really about understanding objections and then coming back in formulating a response that takes into account the way they’re thinking, and seeing if that furthers your cause.

If people come away from the sale process saying, “Oh, yeah. Well, Jamie gets me, gets what I’m saying and respects that,” they’re going to be more open to talking to you in the future. There may be a further opportunity.

But if you’re asking a swimmer to play in a baseball game, it’s not going to happen. There are going to be a lot of people that will fit what you’re selling. If you have a really good product, that gets good salespeople to show up because they know they can sell it.

Financial services is much harder because there is no world’s greatest financial services firm that out-performs everybody else all the time. I think that, faced with several products that have similar return profiles, it’s all about the character in the firm fits, how it relates to them, fitting them into the right universe of products and then seeing if you’re in that universe. If you’re a ninety-year-old American who is very much concerned about getting their money to their kids, I don’t think you’re going to be buying emerging market mutual funds. That’s an extreme example, but everybody’s got preferences that you need to cater to.

The short answer is that you try to establish a relationship so that, even walking away, you can return to more questions and try to build that relationship over time.

It almost makes sense to just keep a Rolodex of people who said “no” and returning to them, and not necessarily run away from them and close the book. Have a plan to re-engage them and approached them again, making sure to thank them, “Oh, great meeting. Thanks for taking the time. I really learned a lot. I was thinking about what you were saying, and if I got this right you said this and did that mean this…” You can often turn it around into a sale eventually.

But I think a lot of people are just like, “Oh, the guy rejected me…” and never go back.

 

Jamie:  Please talk to me a little bit about the power of referrals, if that’s the way that you do most of your business?

Eric: I don’t think referrals are any better than anything else. I think in some ways, it depends on what a referral is. If there is a client that you really like and he says this to you, “Hey, Eric, you’re really going to like Jim. He’s a great guy. You guys are really good to get along.” That’s a great way in.

There are different types of referrals. I think the interpersonal connections you make in your network and their relationships are so interesting. You still have not figured out exactly what is it that they want, and the risk of shoehorning is still the same. I think word of mouth is a great way to go. However, don’t get fooled into thinking that because somebody is referred to you, they will fit your product or that you’re going to have a good relationship, because the guy referring may be really bad at qualifying.

You’ve still got to go through this whole process with them and discover what the problem is. Overall, you’re probably better finding qualified people than any people referring you. A referral is a great starting point, but you should never take that at face value. That doesn’t skip a step. There’s no shortcut. It’s a good thing to start with. It doesn’t change the process.

Jamie: What advice would you have to get to a client’s real personal value if they’re not willing to open up straight away?

Eric: If the person is saying “no,” the only thing you can ask for is that you can say, “Look, you know, I really appreciate your time, and it would really help me in the future to understand from you what it is that you object to and if there’s anything I could do to change.”

I think the way you really want to do it, especially if you’re young in sales, is that everybody likes to mentor. It’s like, “What advice could you give me? Is there something I could be doing better because I’m trying to improve and just starting out?” There are a lot of things you could do to engage the person and get them sympathetic to your position and help you out a little bit.

You could be like, “I know you don’t have a lot of time now. I really appreciate it. Would it be okay if I email you with a few questions because I’m trying to improve and this and I’d really like to understand what you’re thinking?” Something that engages them or gives them a sense that you’re not threatening them, you’re not trying to change their mind. “Would you do me a favour? It’d be great if you can tell me; that’s really helpful to me, and I would really appreciate that,” and you kind of turn it around so they don’t feel bad about it. A lot of times people say “no” to get control; they feel like you’re taking control of the interaction and they want to get in control. Once they’ve done that, they kind of loosen up, then you honour that, and you say, “I really appreciate that.”

Jamie: Do you ask for feedback in all your professional relationships?

Eric: Yeah, absolutely. You want to know where the other person’s coming from. I think it’s a good practice to because it forces you to listen. Listening is a fundamental skill. In some ways, I guess I was pretty bad at that. I’ve got better at it over time. I think you’re so eager to try to explain what you need to explain to people, that maybe you feel like silence is a bad thing where you’re nervous, and you want to ensure that you’re getting across your ideas. You have got to give oxygen to their ideas because that’s where you can figure them out – the best salespeople do that. 

Jamie: How do I go about becoming a financial services salesperson?

Eric: I think part of that skill would be convincing. If you’re interviewing for a financial sales job, practice selling, right? If you use the same skill set that I’m describing during that interview process, you can get through it but if you get a rejection, and it’s a job that you really want, then say, “Listen, I really appreciate it, but can you give me a little bit information? I’d love to be able to improve myself the next time.” You use that same process with everything. I think you could probably get the job that you want using that process.

As far as getting a job in financial sales, I guess there are different ways you could do it. One way would be to do the sort of brokering where you’re trying to just sell, sell, and sell. Young people have a hard time, for example in private wealth, because it’s more of an evolved long-term relationship thing. I think people generally when they’re dealing with their own finances, want to deal with somebody who’s at least their age or older, it’s one of the few things were seniority or age is seen as a positive as opposed to negative. It’s who you know and how you know them.

The first part of a career is helpful as you got to get past rejection. My first sales job was where I worked for a company called Dial America Marketing. My sister and I were only sixteen, and you sat in a room with a bunch of desks, and they gave you a phone book, and you went down a street, with street addresses and names, and you sold magazines where like 2% of the money that they paid for the subscription went to a charity, and we were like, “Can you help the kids?”

But you could make $15 an hour, and at the time, the minimum wage was $3 an hour. So as kids, we were making a lot of money, and it was really about a telephone sale, which they don’t really do any more, but that was a really good skill and really interesting, because you can spend too much time on the phone with somebody, and you’re calling places where they haven’t got a phone call in a year, like on a farm or something. 

It was cool. You really don’t have that anymore. Targeted marketing, I hear thinking around sales is becoming more and more scientific, and I kind of think that to some extent that’s true, but the guys who are super successful at what they do, it’s all about selling themselves and understanding relationships. I think you learn whether you can do that or not. It’s a pretty quick method to figure out what is it that some people are good at.


Jamie: Eric, if you could have your sales career again, what would you do differently?

Eric: I wouldn’t do anything differently Realistically, I couldn’t anyway. If I did anything differently, then I wouldn’t be who I am right now. I guess if I did anything differently, I would have had a newspaper; I would know the future and take advantage of that. But aside from that, I probably would have made the same mistakes, and I would learn the same things. I’m okay with that.

Learn from your mistakes. “No” is not “no.” “No” is an invitation to figure out why. The question in sales is always “why?”

Jamie:  I was wondering whether you’d be willing to tell me about a specific time when you failed to make a sale, but it taught you a specific lesson?

Eric: I remember one instance that really struck me. I bought a small company with a couple of very smart guys. We had a really good group of people. We did well, but everything comes to an end, and we closed. I then bought this other company with one of my partners, and we both wanted to recreate what we had before because we really enjoyed it. So, we hired more smart people. 

There was a Harvard PhD from Goldman Sachs, he had some clients, and so we said “yes” to him for our team. Then I went out on a sales call with him to one of his insurance clients and a pipeline prospect.  It was really interesting to watch him because he talked about himself a lot. He talked about why his product was superior to what they had. He dismissed his competition, and the clients were saying “yes” the whole time, really stringing him along, and then he left, and I asked him how the meeting went. He said he thought it went great, and I told him he was fired. 

Why? The first thing was that he was trying to sell them something without having any understanding of what they wanted, and he wasn’t listening to what they wanted.

It’s a zero-sum game, to bash your client and bash the competition they’ve already bought, unless your client is saying, “I’m really unhappy with this product.”

You never speak badly about your competition. It’s a foolish thing, and you may be working for your competition at some point. So, that’s just cardinal rule number one- you don’t do that. 

The other thing was that he wasn’t reading the body language of people. He didn’t qualify them. Again, these were people who were incapable of saying “no” to him, but he was wasting his time with multiple meetings with something that was going to happen anyway, and he never really got to the point of figuring out what their objections were or why it wasn’t going to happen. It was all about his ego. When we did end up parting ways, we took his pipeline and determined that out of 25 warm relationships, only one of them was translatable into a sale.

For the rest, the best you could do was to go back to them and say, “Look, I’m going to let you off the hook. I realise this isn’t for you. I totally get that. Maybe I know somebody else who can help you. I get that it’s not going to be a “yes,” and that’s fine.”

Jamie: On the other side, could you tell me a specific example of a really good sales process which shows off the skills and the knowledge that you’ve developed throughout your career?

Eric: I have a client who I went to originally, and he said, “Look, I do business with X and Y. I’m never going to leave them.”

I said, “That’s fine,” and I was like, “So what is it you’re looking for?” He explained to me that he liked them because they were really good at servicing, but they weren’t really helping with other parts.

I said, “Maybe, there’s a way I can inform my consulting agreement with you where we don’t have to move any of your assets.” My firm wasn’t as happy about it, but we got a fee from it. We ended up advising him, and I now co-run his family office. It was more about listening to what this individual wanted and why he wanted it. What was he happy about? What wasn’t he happy about?

Very importantly, it was about having somebody in the next generation after him that was going to help him bridge his beliefs to a younger generation. Somebody needs to keep alive his philosophy and what he wanted to do and make sure that in his absence that what he believed in was still honoured.

He also wanted to have some company and to be able to go over this stuff in a way that he felt created meaning for him as opposed to just sitting in a room by himself, where he could explain his thinking and have somebody who enjoyed understanding his beliefs, and maybe disagreed with them once in a while, but really almost for the camaraderie of it. Those are the things that he wanted.

The people at my firm at the time, which I’m no longer with, were always trying to say, “Yeah, we have to get him to trade somehow. Here’s the thing, go sell it to him,” and I would sit there and think to myself, “This is inappropriate for him. This is not what he wants.” I was able to understand what he wants and how he thinks. I can now help him find things that he wants, and I can also screen out a lot of the things he might waste his time considering. There are many different views and theories on sales. I can’t say mine is the best, or right for everyone, but it works for me.

 

[END]

 

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