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Ben Kingsley Blog post by Ben Kingsley

Advisor vs. Salesperson

I’m in the process of finalising the plans for a major renovation of our home, and there are a lot of people involved in the process and a lot of decisions we need to make – BIG Decisions that carry a lot of costs.

Through this process it has once again been highlighted to me the wish I have always had regarding making BIG financial decisions, that wish is that people would be honest, truthful in providing me with the best advice about what we should do, more so than trying to sell me their particular product or service.

Now I realise my dream of having independent, unbiased advice in this process and with any product or service being offered for sale in a capitalist society is an impossible dream.  Let me use an example, I’m in a Bathroom centre that stocks about 5 brand names.  In talking to one of their sales agents I know that the advice I’m going to receive is going to be geared towards him/her making a sale for the products they sell.  It’s their job, as that’s how they get paid and how they keep their job – I understand.  And let’s be realistic about this, it’s impossible for every bathroom centre, as it is with any business to stock absolutely every company’s products within their industry, so that’s just the reality of the situation, but it’s nice to dream and as long as I’m aware of this I factor it into my decision making process.

So if it is the case, where I know there is a bias to what I’m being told, I make my purchasing decision based on my assessment of the salesperson’s honesty, knowledge and their idea of how they are going to provide a solution for me, whether it’s a design idea for a bathroom or a new LED TV, because it’s going to come down to how much I trust this person and how they are planning to help me.

On the occasions I am able to find professional advisers, I am extremely happy to pay for their professional advice, such as our Architect and our builder, because their vested interest is in providing me with a solution to my problem or helping me create the dream that I want for my family and I.  In choosing these professionals I look for experience, track record, their responses to my difficult questions, their ability to assist in problem solving my issues or ideas etc, etc.

Furthermore I am also very happy to take their professional advice regarding a referral to other experts who they have worked with and experienced their work.  I want to build the very best team of professionals within their disciplines as I can.  They know far more about what they do than I do, that’s why I’m paying them a service fee for their time and skills, but I will ask one simple question before I do talk to the referral business – Are you going to get paid a kick back or referral fee etc, from the party you are referring me to?

If the answer is yes, then two things happen, I don’t ring the referred company and secondly, I usually don’t take up the services of the company making the referral.  You see I have a real issue with both businesses in this situation, it says to me that they need this referral arrangement because they aren’t so great at their own business disciplines and secondly the referral is more about them making more money for themselves than it is about looking after me.

Let me relate this back to our business.  On Friday I got an email in my in box that read – Make $500 for referring anyone who needs a home loan.  I laughed firstly because the stupidity of the sender, sending a mortgage broking business an email like this.  But most importantly it screams at me that this business has to resort to giving away money to attract new business.  Why aren’t their satisfied customers who received great service automatically telling others about their great service, well maybe they’re not getting great service at all – you’re just a transaction for them and a way to making them wealthier instead of you!

Another alarming example where referral kickbacks are out of control is within the Property industry.  There are some businesses offering referrers up to $50,000 commission to businesses or individuals who refer them a lead to sell them a house and land package as a so called ‘great’ property or ever a ‘great investment’ property.

One guess who’s paying for this kickback – THE PURCHASER of the property hidden in the overall price they pay for the property.  Now the most frustrating part of this is that the purchaser will probably never get told that the business that made the referral is due this money because neither party will ever tell the client.

To me this is wrong on so many levels; firstly the company or person making the referral is doing so for their own financial gain, NOT their clients.  Secondly the non disclosure of what is being paid is dishonest and says to me that they have poor morals in doing business with anyone.  Now, in my travels I have spoken to people who make a killing out of these types of arrangements and in their eye they are simply better salespeople and that’s how they justify it to themselves.

I suppose that’s the point I’m making here………work out whether someone is trying to “sell” you something, as opposed to someone trying to help provide a solution to your situation/problem/opportunity.  I’m betting your experience as a buyer will be profoundly better when you opt to work with a professional who has your interests as their primary outcome.

Remember, knowledge is empowering – if you act on it!

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