Build Trust and a Good Reputation
Mistakes are inevitable for anyone — retirement professionals included. But while it is predictable that people will make mistakes, how they will respond is not. If they’re wise, they’ll consider making an apology, argued Lauren Bloom of Elegant Solutions Consulting, LLC, in the Oct. 24 keynote address at the ASPPA Annual Conference at National Harbor, Md.
Everyone makes mistakes, and that those that retirement professionals make can be serious, Bloom pointed out. “You handle massive amounts of money,” she said, adding that a reminder that they are part of others’ financial security.
Which means that the stakes are high — for the professionals and also for those they serve.
The stakes also are high for society in general, Bloom argued. She pointed out that more than $250 billion is spent every year in the United States due to litigation. And not just from direct costs; she observed that the cost of litigation is built into what we buy and the services we use, and through the need to buy insurance.
When mistakes happen, said Bloom, there are options:
1. Do nothing, and hope the problem goes away.
2. Hire a lawyer, and spend money on litigation.
3. Apologize before the other party sues.
Despite the view that many hold, it is not always the high-integrity choice to not admit an error. In fact, Bloom said, often the high-integrity choice is to admit a mistake.
Dos and Don’ts
Bloom identified six essential elements to an effective apology.
1. Offer a sincere apology. Sincerity is always key, said Bloom. Make it evident that you are contrite. And keep it simple.
2. Take responsibility. Know that you did, explain and don’t excuse, and handle hard facts with care.
3. Express appreciation. Demonstrate sincerity and be specific about what it is about that person that you appreciate.
4. Listen. Listening shows respect, brings healing to both parties and does not incorporate defensiveness.
5. Make amends. At the very least, take steps to bring the other party to where they were before the mistake occurred.
6. Do better next time. Know yourself, make a specific promise and keep it.
The best way to apologize, said Bloom, is to make it in person. Barring that, doing so by phone or apology letter or with a gift if possible.
When apologizing, she advised, don’t:
- make jokes;
- make excuses;
- use the words “if” and “but”;
- use corporate-speak; or
- use the keyboard to do it.
After making the apology, said Bloom:
- continue the dialogue;
- document discussions; and
- fulfill promises.
It Can Pay Dividends
Bloom noted that an effective apology strengthens a client relationship, builds and loyalty, saves money and keeps one out of court. “Clients respect professionals who acknowledge and fix mistakes,” she said, adding that clients rarely sue those they like and respect. More important, apologizing “frees one to do better things” and allows one to one build trust and a good reputation.