When I was a sofa salesman working in Melandas Casa Mobili at IMM, one way to tell whether a couple is serious in looking for a sofa is by asking them to sit in the sofas.
If they don’t want to sit down in any sofas, it’s a tell-tale sign they are just “strolling the garden”. I would move on to other “prospects”. I am working on commissions OK?
The longer I can keep a couple sitting in one of our sofas, the odds will be better for a sale. That is why when you enter into a furniture salesroom, the sales staff always invite you to sit. And if you walk into a mattress showroom, they will ask you to lie down! (No not together! No when your missus is around!)
The same technique is used in car showrooms. If you don’t even want to go inside the car to feel the steering wheel, you will get ignored pretty soon. And if you go for a test drive, its kaching $$!
That is also why when your missus drop into jewellery shop, the smart sales person will pile pieces of jewellery on her finger, neck, and wrist! You don’t let glass come between a girl and her jewellery.
You let her feel, touch, and possess it! And when you see the longing look when the sales person put back the jewellery back into the glass cabinet, you relent and say: “OK, whatever makes you happy dear. Just choose one.” Ouch!
Now, how would a broker promote something “intangible” like financial derivatives? Something that most people “fear” is complicated and dangerous?
Yes! You introduce fake trading simulation accounts that create the “illusion” that it’s a risk free environment for you to test out your strategies before you get your feet wet…
Why? Simple – it’s an understanding of human emotions:
1) Over-confidence – It’s a lot “easier” to make money using fake money as the emotional turmoil is taken out. It’s all fun and games!
2) Denial – You can bust out your fake trading account 9 times out of 10, and on the 10th try you make money, you tell yourself that you have found your “method”!
3) Familiarity – The more we get used to something, the more we let our guards down. So instead of opening with a “hesitant” small $5,000 or $10,000 account if you had not traded with simulation, you now will open a much bigger starting account. You are now energy charged!
And what happens the moment you trade with real money?
I have a simple test. If you now have $50,000 to hand over to a fund manager, would you hand-over your money to:
a) A “world champion” in a trading simulation competition, or
b) a fund manager with real investment track record that beat 80% of his peers?
Skip the trading simulations. Most newbie today have lots of knowledge – be it through books, internet or seminars attended. It’s not lack of brain-power; it’s more about emotions.
And the quicker we discover our personality flaws, the quicker we can decide to stay in the game (reflect and adjust) or get out (out-source).
May the force be with you!
well said. but emotion over what?
ReplyDeleteYES,
ReplyDeleteThere are people who simply can't and shoudn't be in the stock market.
And there are the opposite. They love to be in the market.
Making money or not is another matter.
Hey, you sound like a "Psycho King"
You really can be a "Super Saleman".
Please don't try it on me.
Ha! Ha!
Coconut,
ReplyDeleteEmotions - greed and fear.
Trading using simulations is like boxing with the use of morphine. When we don't feel pain or fear, we box one way (greed for glory). Feel the pain of the opponent's counter punch, see if we dare to attack again (fear starts to set in)!
Hi Temperament,
ReplyDeleteBo pian. I must tan ciah. We learn by trial and error lots of body language and customer psychology. Sales has no time for theories. No sale, no commission. Period.
My favorite 2 closing techniques working at Robinsons:
1) Should I gift wrap for you, Madam?
2) Would it be cash or credit, Sir?
Jedi salesman - LOL!
greed and fear? wrong! haha.
ReplyDeletegreed and fear are our instinctive reaction, its our protection for our survival. without it you'll die immediately.
Exactly! In simulated trading environment, where got greed and fear?
ReplyDeleteIn virtual world, we won't die. Can press the reset button :)
Assume close? Haha that's one of the techniques that my wife told me about when she was still working as a personal financial consultant in one of our local banks.
ReplyDeleteAgreed the ability to conquer our emotions is the greatest hallmark of a great investor. In fact, I think this is the single most important determinant between success and failure!
Blackjack
wah lao! what wrong with europe? SMOL you are there can you tell?
ReplyDeleteyes, the ability to handle not just losses or failure but also winning and success.
i think success is more difficult to handle than failure.
cos i have very few success and lots of failure haha.
ReplyDeleteHi coconut,
ReplyDeleteYou really make the world goes upside down. So when you have a lot of success and little failure, you will find it problematic handling success because you have too much to handle? i am not sure now too much success is good for your soul or not? Don't confuse Confucious leh.
Do you really want success or failure? You cannot have both at the same time.
Ha! Ha!
welcome to the wonderful world of trading temperament.
ReplyDeletewhere making money is not always successful and losing money sometimes is permitted and just.
indeed when trading, many times you will find yourself "upside down", good point temperament.
and what i really means by difficult to handle success is that once you feel you are successful, in trading you are in trouble!
ReplyDeletecos it is very difficult to maintain the successful rate you achieved, usually you end up sliding down the hill.
as for failure, we usually don't have a problem with that.
and i usually do not want to feel successful (i'm trying very hard) or failure. i want to stay in between.
ReplyDeleteif i make some money, i'll find some excuses not to be happy and if i lose, i do the opposite.
Coconut,
ReplyDeleteThat's why it's so refreshing to have your "alternative" inputs here!
I started with "what talking you?" to now beginning (only just!) to understand you a little better.
Coconut, you sure your parents did not drop you when you were a child? (I ask with lots of love and respect)
LOL!
Regarding Europe,
ReplyDeleteLet me attempt to explain with actions - not words.
Every month, I withdraw my euros from my Athens Citibank and hide them under my mattress.
I don't want to be caught with my pants down if and when Greece defaults and revert to the Drachma, or when it's kicked out of the Eurozone. I belong to the default camp.
Keep an eye on German voters. Chancellor Merkel just lost another local election.
The German voters are beginning to behave like Singaporeans - we bitch about FT, they bitch about their ill-disciplined neighbours...
Finland is smarter. They insist on collateral before agreeing on bail-out loans to Greece. Those countries that made bail-out loans to Greece without collateral are fuming mad! You can't legislate against stupidity of politicians!
Praying hard that Euros don't crash for the next 4 months. My company pension fund is dominated in Euros.
I have a 50% hedge (short euros) on my annual salary; but I did not have any hedge on my pension!!??
Kicking myself hard for sleeping on the wheel! Talk about oversight!
no they didn't drop me. but i do knock my head on the wall. thats how i get what i want as what i was told, can't really remember all those pain haha.
ReplyDeletenow you know how i got my nick.
my mom use to say i'm devil born haha, everyone, i mean every single one of them are afraid of me. i would walk up to someone, for no apparent reason, punch him on the noise and run.
ReplyDeletefortunately i can't remember all these things i've done and i'm still alive!
oh europe, what a mess. but the euro are doing fine. they are now talking about the "united state of europe" haha.
ReplyDeleteHi SMOL,
ReplyDeleteWah, I love the little salesman tricks that you provide :) It helps to know it because everyone is a part time salesperson and it's good to recognise the techniques to defend yourself too. Here's a few more I use and defend myself against:
1. Ask for name, and use the name repeatedly. It is said that people love to hear their own name being mentioned.
2. Look for commonalities. Same country of origin, same dialect group, same hobbies, same football club, same bad habits...
3. Tell people not to buy the most expensive item to gain trust and to show that you're on their side. Once that trust is gained, any recommendations that followed will be treated with less caution.
4. Anchoring. Anchor a price on the customer's mind. Once done, everything will be subconsciously referred back to that anchor pt. E.g. Show the customer a $1000 product and talk in length about the different good points about it. Then say he don't have to buy this because there's one which has all the function but is selling at $500. The $500 product will seem cheaper than if you try selling $100 product, and then going forward to sell that $500 product.
It's an important skill to learn - salesmanship!
LP, we are all Jedi warriors!
ReplyDeleteLOL!