Written by: Ken Haman
On March 11, 2020, the World Health Organization (WHO) declared the coronavirus to be a pandemic. This word describes a disease that has spread around the world and is likely to affect every country, at least to some extent. But most of us already knew something really significant was happening when we noticed an amazing thing at the grocery store: all the toilet paper was gone! For client-facing financial advisors who manage dozens or even hundreds of investors, understanding what missing toilet paper means to clients is critically important if you want to help them cope with the current situation.
The Power of Social Proof
In his famous book Pre-Suasion: A Revolutionary Way to Influence and Persuade, Dr. Robert Cialdini explores the concept of social proof as one of the most profound influencers of human behavior: “[P]eople think it is appropriate for them to believe, feel, or do something to the extent that othersare believing, feeling, or doing it.” In the presence of empty toilet-paper shelves, this translates into a deeply impactful assumption: “Everybody knows something that I don’t.”
Even more powerfully, the absence of an important resource (like toilet paper) can induce intense emotions bordering on panic: “I can’t get what I need. I’m not going to be okay. What am I going to do????” Even highly rational people, when confronted with something like empty shelves when they’re used to seeing abundance, can feel profoundly disturbed.
Because these strong feelings aren’t rational, they often get split from their original stimulant (empty shelves) and get attached to a bigger problem. For example, we’ve all experienced a lack of toilet paper that means, “A big storm is coming; we might be stuck inside for a while.” Rationally speaking, a lack of toilet paper isn’t an accurate predictor of bad weather. Nevertheless, when you’ve heard about a storm and you see a dwindling supply, the combination can lead to a run on what’s left of the Charmin: “I’d better stock up just in case.” A few such innocent decisions early in the day can stimulate borderline panic by mid-afternoon.
Today, with the media reporting every nuance of the pandemic, the easiest stimulant to attach strong emotions to is “A deadly disease is coming.” Then, when supplies of hand sanitizer, disinfectant wipes and toilet paper are all missing at the same time, our social proof can activate very powerful and automatic fight-or-flight instincts. That’s when things can really get interesting.
Why Strong Feelings Spread
The coronavirus pandemic has created a vicious spiral that will, with predictability, stimulate strong emotions in many clients. The grocery store provides early evidence that something is wrong. Then, the cancellation of events, interruption of travel and inconvenience in other areas of life activate even stronger feelings. As the media report on the reactions of friends and family of people who are sick, clients can feel like they’re surrounded by victims of the disease even if the victims are hundreds or thousands of miles away and are only strangers seen on television or the internet. Eventually, many people will feel profound levels of personal danger and the vicious cycle will continue.
This is where a solid understanding of psychology can help you, as a retail financial advisor, to become more effective with your clients. We know from decades of research that the human central nervous system hasn’t changed in any meaningful way in more than 50,000 years. This means that the same fight-or-flight instincts that protected humans from real, immediate threats when they lived in caves will get activated when we see something as benign as missing toilet paper. The prudent advisor anticipates that clients tend to be much more emotional than usual during any crisis and will benefit from effective support and calming reassurance.
What Can a Financial Advisor Do to Help?
There are three steps you can take to help clients cope with this type of panic.
First, and most important, manage your own anxiety. It’s very easy for your fight-or-flight instinct to become activated by the images and commentary on television and by your clients’ emotions. You’re vulnerable to social proof, maybe more than most, since you spend many hours each day paying attention to the media and listening to others talk about how they feel. In order to be a calming influence on your clients, recognize your own feelings of vulnerability.
Control your emotional reaction by feeding your rational mind with as much accurate information as possible. Study the analysis provided by your firm, avoid the hype of the media, and pay attention to the technical reports available from the Centers for Disease Control and Prevention and WHO. Your clients will benefit from—and appreciate—your efforts to be well informed and to adopt a professional point of view about the pandemic. An additional benefit to your business will be that as clients look to you for information and reassurance about the current situation, they will be developing a more powerful appreciation of you as their advisor.
Second, proactively reach out to your clients and explore how they’re feeling. Giving clients the chance to talk about their feelings or reflect on their experiences activates more rational thinking patterns. Answering questions allows clients to put feelings into words and start sorting emotional reactions from rational analysis. There’s something profoundly simple and effective about inquiring gently, listening attentively and inviting clients to talk more about how they’re feeling.
Finally, normalize each client’s experience of concern. For many people, when their emotions get stirred up and they feel anxious, they become embarrassed and ashamed of their irrational reaction. It can be powerfully helpful and reassuring to tell clients that it’s perfectly normal to feel anxious and uncertain when there are odd things going on. In fact, it wouldn’t be healthy to ignore something as significant as a huge, gaping hole of missing toilet paper.
By becoming well informed, accepting that everyone will have some level of irrational reaction to the coronavirus pandemic, and reaching out proactively to listen to and understand how clients are feeling, you can build a strong foundation of positive relationships that will continue to reap benefits as—inevitably—this health scare starts to resolve and life gets back to normal.