Rocky markets mean that you can’t rely on referrals alone. If you’ve built a significant client base, you want to continue to dedicate the bulk of your time to communicating with them. But for your business to stay healthy, you need to bring in new clients – advisors need to carve out three hours a week to focus on reaching out to prospective clients.
In a recent article, I explained how today’s uncertainty and anxiety among clients makes them vulnerable to approaches by other advisors – and why as a result you will likely lose more clients in the next while than was historically the case.
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I also outlined a short question that will reduce the chances of clients leaving. While that question will reduce the risks of losing clients, it won’t eliminate them. As a result, unless you allocate regular time each week to attracting new clients, your business will shrink.
All advisors put a big focus on prospecting when they enter the business, but with success many shift their attention to serving existing clients. In fact, I’ve had advisors tell me with pride that they no longer prospect and only rely on referrals for new clients.
It’s not just your clients who are anxious and open to talking about alternative courses of action – everyone else’s clients are as well. To capitalize on that, focus three hours a week on three things:
- Identifying prospective clients who you might be able to help;
- Initiating conversations with those clients; and
- Following up after those conversations.
Step one: Identifying prospective clients
The first step is to identify prospective clients who are candidates for you. In a minority of cases, advisors have a healthy pipeline of prospects they’re already talking to – but in most instances advisors have a pipeline that’s small or nonexistent.
I’ve written in the past about turning suspects into prospects. Three things have to happen for someone to be a prospect – you have qualified them in some fashion as meeting your criteria for a good client, the prospect knows what you do, and they have expressed some form of interest in hearing from you.
Here’s who’s not a prospect:
- Names in a membership directory;
- A casual acquaintance at a golf club;
- Someone you talk to from time to time after church, at meetings of your alumni association or a board on which you sit.
They could become a prospect, but they aren’t one unless you engage them in conversation and they agree to receive ongoing information from you or express interest in some other fashion.
As a starting point, identify people you already know, even casually, who might be worth approaching. These could come from a variety of connections with whom you’ve had some form of brief contact, for example:
- University classmates;
- Colleagues at jobs before you became a financial advisor;
- Past or current neighbors; or
- Members of clubs and organizations to which you belong.
Don’t limit yourself by thinking about whether it might be awkward to approach these people. Start with a long list of everyone who might be a candidate; you can narrow it down in the next step.
If despite your best efforts you end up with a very short list of names, you have a couple of alternatives.
You could look at hiring someone to make cold calls, recognizing the need to respect the Do Not Call rule. While this is a low-percentage approach, advisors who do this tell me that provided that the caller has the right combination of a thick skin and an outgoing manner, someone on the phone for six hours a day can quickly build a list of prospects who agree to receive ongoing information and in a few cases actually agree to immediate appointments.
Alternatively, your three hours a week might be devoted to expanding your list of contacts, by getting involved in organizations and associations that would allow you to expand your network. As long as you are not overt about trying to push your services and are very patient, I’ve talked to many advisors who’ve had good success in converting contacts from community involvement into clients.
Step two: Initiating contact
Once you’ve identified the people you’re going to approach, you next have to make the initial contact – for many advisors, this is by far the hardest of the three steps. Identifying someone to approach is dead simple; following up with someone after they’ve given you permission to stay in touch is relatively simple, but that initial phone call is incredibly hard.
It’s hard for a number of reasons.
First, there’s the awkwardness of having to deal day-to-day with people who’ve said no to your approach. That’s why some advisors find it easier to approach work colleagues from former jobs or past neighbors.
More important, it’s awkward because it’s at this stage that advisors feel like your stereotypical pushy salesperson. Many advisors find it difficult to say with confidence:
“Given rocky markets for the past few years, I’m calling to see if you’re interested in scheduling half an hour to talk about the outlook for bonds and stocks and to ask any questions about your existing portfolio.”
It’s hard to say this with conviction even when you feel good about the value that you provide to your clients – it’s even harder when that confidence has been shaken. That’s why many advisors find it easier to make that initial approach with something that offers clear, concrete value. This makes it less threatening for you and for the person to whom you’re talking.
Something that works effectively is to call people about upcoming events for your clients – let’s suppose that you have a conference call coming up.
“The reason that I’m calling is that you might be interested in a conference call taking place next month for my clients, featuring a leading money manager. In this call, we will summarize what’s happened in the last while and talk about the outlook for the period ahead and also answer questions.”
There are two reasons that call is easier for most advisors to make. You’re offering clear value. And second, it’s much less threatening for someone to say “yes” or “maybe” to this than to a face-to-face meeting.
This call can be adapted to anything you offer your existing clients – breakfasts, evening events or webinars. And you also have the chance to ask the key question that transforms that person from a suspect to a prospect. If they sound completely disinterested or vaguely annoyed, you likely want to thank them for their time and leave it at that.
But assuming that they respond with polite thanks or even mild interest, you have the opportunity to say: “Can I let you know about future upcoming events for my clients?” or “Would you be interested in receiving the regular email newsletter that I send my clients?” The moment they answer “yes,” they’ve become a prospect.
I have one suggestion about making that approach to people you know from a common organization or club. Unless someone brings up the issue of markets or asks you a question, resist the temptation to mention this when you are talking to them at a meeting – it makes it appear that your primary purpose in attending that meeting is to hustle up sales. Far better to call them the next day as a follow up to your conversation.
Step three: Following up
For most advisors, that initial call is the hardest part of the prospecting process. But even after someone gives you permission to stay in touch with them, you won’t see a payoff unless you follow up effectively.
Many advisors I talk to feel uncomfortable with the follow-up process – they don’t like to be pestered by people trying to sell them something and hate to pester prospects in turn. Earlier this year, I devoted an article to how to effectively follow up with prospects, in which I discussed the critical importance of building a foundation of credibility and of taking a needs-based approach to your follow-up call.
We’ve all got full days and none of us are short of things to do. Carving out three hours a week dedicated to prospecting will not be easy and is something that would be simple to put off as a result.
That’s especially the case because spending time on prospecting isn’t urgent in the short term – you won’t reap the benefits this week or this month if you don’t allocate time to bring new clients on board. But you will pay the price this year, next year and the year after that.
In Seven Habits of Highly Effective People, Stephen Covey wrote about the need to focus on things that are both urgent in the short term and important in the long term. If you are committed to a long-term healthy, sustainable business, building regular prospecting time into your routine is an absolutely essential investment of three hours a week.
conducts programs to help advisors gain and retain clients and is an award winning faculty member in the MBA program at the University of Toronto. To see more of his written and video commentaries, go to www.clientinsights.ca. Use A555A for the rep and dealer code to register for website access.
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