Consultative selling in financial services: an observational study of the mortgage mediation process

Abstract

Consultative selling in financial servicesVerhallen, T.M.M.; Greve, H.J.M.; Frambach, R.T. General rightsCopyright and moral rights for the publications made accessible in the public portal are retained by the authors and/or other copyright owners and it is a condition of accessing publications that users recognise and abide by the legal requirements associated with these rights.-Users may download and print one copy of any publication from the public portal for the purpose of private study or research -You may not further distribute the material or use it for any profit-making activity or commercial gain -You may freely distribute the URL identifying the publication in the public portal Take down policyIf you believe that this document breaches copyright, please contact us providing details, and we will remove access to the work immediately and investigate your claim. ABSTRACTThe literature on personal selling and advising on services stresses the importance of analyzing the actual client-advisor interaction process. In this study this process of interaction is explored in a mortgage setting. In total, 42 conversations between advisors and 26 clients were observed. The exact content and characteristics of interactions were recorded and coded using a category system based on consultative selling. The coding system was derived from research and theory on a problem solving approach to personal selling. The results show vast differences between advisors * Theo M.M. Verhallen is professor of marketing and marketing research at

Paper Practices in Institutional Talk: How Financial Advisors Impress their Clients

“…a mortgage) (Oehler and Kohlert, 2009). Financial service encounters have received attention from a descriptive and analytical perspective (Verhallen et al, 1997), a prescriptive perspective (Moulton, 2011;Bradbury et al, 2014) and a design perspective (Heinrich et al, 2014b;Heyman and Artman, 2015). The research provides a well-motivated and founded yet global and general picture of financial service encounters.…”

“…For instance, an encounter between a doctor and a patient happens mostly in a hospital or at a local surgery and follows a scenario of a medical examination in which the patient contributes the description of his or her complaints, and the doctor contributes treatment suggestions. Similarly, in a mortgage advisory service, the client's contributions would include information on his or her monthly income and savings, a property or properties they would like to buy and likely plans for the future, while the advisor's contributions would include an assessment of creditworthiness or information on the configuration of a possible mortgage (Verhallen et al, 1997). In other words, while in a transactional encounter the participants exhibit asymmetries regarding access to virtual or material goods, the participants in an advisory encounter exhibit knowledge differences about the process and the content (Ten Have, 1991): First, the advisor has knowledge about the actions sequence in the encounter, while the advisee can only assume a process using his or her previous experience and general knowledge.…”

“…The movement and positioning of paper on a table resembles the typical activities of an advisory encounter, i.e. information collection, information provision and recommendation (Verhallen et al, 1997;Jungermann, 1999;Jungermann and Fischer, 2005;Moulton, 2011;Bradbury et al, 2014). When the advisor moves a sheet of paper towards the middle of the table, this action is information provision.…”

Evaluating the effectiveness of customers’ communication experiences with online retailers – A study of e-mortgages

“…For example, the mortgage process poses an interesting set of challenges to online retailers. While it encapsulates an obvious sales element, it also significantly comprises a strong advisory component, where trained financial advisors consult with their clients to problem-solve and find the best financial solution to meet their customers' property purchase requirements (Verhallen et al, 1997). The provision of personal advice and therefore direct face-to-face communication experience for clients is not of course limited to the financial services industry.…”

“…In retail, some products that are sold can be highly complex in nature and the buyer needs to fully understand the product before they can act by purchasing it. Financial products, for example, tend to be quite complex (e.g., mortgages) and are often sold to customers through the provision of personal advice to ensure that they fully understand the product and commitment they are making (Verhallen et al, 1997). 2.…”