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What’s become the most important sales skill over the last 10 years?
A recent survey asked senior sales executives at Fortune 500 companies exactly that question. The answer was a surprise – it had nothing to do with proficiency on social media, asking great questions or taking a consultative sales approach. According to senior decision-makers, the sales skill that is now most important compared to the past is the ability to effectively cultivate and manage a pipeline of prospects.
Just as managing a pipeline is critically important for salespeople who work for large corporations, so it is for every financial advisor.
Of course, the notion of a prospect pipeline is far from new; the idea that it takes patience and repeated contact to bring new customers on board has been around since the first merchants set up shop in the bazaars in the Middle East in the third century BC. What’s new is the fundamental change over the past 10 years in what it takes to nurture prospective clients.
Here are eight new rules on building your own pipeline of prospective clients.
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Rule 1: Someone isn’t a prospect until they say “yes”
Let’s first define what we mean by a prospect. College classmates, former work colleagues, next-door neighbors and people you know from your golf club or Rotary meetings are suspects, not prospects. People don’t become prospects until they do or say something that shows some level of awareness and interest in what you do, whether it is sitting down for a coffee to talk about their situation, attending a lunch you’re hosting or agreeing that you can add them to your newsletter list.
Rule 2: Don’t rely on gravity
For the past 100 years, sales trainers taught salespeople to think about sales like a funnel. Put enough potential purchasers in the top, even though some would leak out through holes in the side of the funnel, over time gravity would see a certain number emerge from the bottom. Today, you need to think about the process of cultivating prospects differently – more like a pipeline, less like a funnel. Yes you need to put prospects into the entrance of that pipeline, but you can’t rely on gravity to convert them to clients. Today prospects will become clients only if you initiate contact and activity to move them through the pipeline and get them out the other end.
Rule 3: You need a communication catalyst
Which takes us to the next new rule for adding clients. In times past, persistence was the key to success – check in with prospects often enough and after a while they’d agree to meet. Even if you can reach prospects today (let’s suppose they pick up the phone by mistake), most people are way too busy to respond to a check-in call that effectively says “ Just following up to see if you’re ready to buy yet.” Of course there will always be exceptions; maybe you’ll get very lucky and hit prospects just as their existing advisor has done something to annoy them. But that’s not something on which you want to rely.
While persistence is still important, today it’s no longer enough. You need a communication catalyst, something that demonstrates at-a-glance value and positions you with prospects as delivering differentiated value to them. Some advisors do this via quarterly webinars or lunches to update clients on market developments. I’ve seen advisors who do this through large-scale annual client events, still other advisors send clients weekly or monthly emails with links to articles from the New York Times or Fortune. To be effective, your communications catalyst needs to be clearly credible and stand out from the reams of information that overwhelms potential clients. That’s why sending an email with your chief strategist’s outlook is much more effective if he’s been interviewed in the Wall Street Journal than if it appears with your firm’s logo at the top.
Rule 4: The Purchase Loop controls the timing of decision-making
In times past, advisors drove the timing of conversations with prospects. While advisors still play a critical role in initiating contact, clients have seized control of the timing and direction of decision-making on moving to new advisors. Recently, the website About.com released research on how today’s consumers go about making purchases in a variety of categories and unveiled a concept called “The Purchase Loop.”
This research identified six interrelated stages that customers go through when making a purchase. And while salespeople are important at some steps, what’s striking is the reliance on online access to get information that salespeople would have supplied historically. As a result, advisors have to recognize that their ability to control timing of decision-making is reduced relative to previous periods.
Click here to read the research on The Purchase Loop.
Rule 5: You still have to ask for the order
Even if you do everything right, you won’t get the full benefit of the other seven rules unless you ask for the order. I was reminded of this when I interviewed an advisor who’d used speaking engagements to build a robust pipeline of prospects. At the end of every talk, he’d draw for a book; each ballot gave members of the audience the opportunity to be added to the mailing list for this advisor’s newsletter. With this simple tactic, this advisor built up a pipeline of hundreds of prospects with whom he was communicating on a quarterly basis. And this worked - every time his newsletter went out, his phone would ring as some of the recipients called for an appointment.
Then this advisor did one more thing that dramatically increased the payoff from that pipeline of prospects he’d built. He hired a summer student to call everyone on that list with a simple sentence: “ Dan asked me to contact you to see if you’d like to schedule a time to sit down and talk about your situation.” By doing this and this alone, he dramatically increased the payoff from the investment he’d made in building that pipeline.
Even if you do everything else right, you still have to periodically pick up the phone and ask for the order.
Rule 6: Improve both quantity and quality of prospects
When I talk to successful advisors about their biggest business challenge, at least eight percent of the time the answer relates to attracting new clients. Given that, my next question relates to the number of qualified prospects with whom they’re actively communicating. The most common answer is between five and 10, with the occasional advisor talking to as many as 20. “ But they’re 10 very high potential prospects,” is the answer I recently got when I suggested that this number was unlikely to be sufficient for an advisor to meet his growth goals.
The number of prospects you talk to is highly subjective – but I can say with a high degree of confidence that most advisors aren’t talking to nearly enough prospects. Yes, quality is important, but even the best quality prospects won’t enable you to maintain a healthy business if there aren’t enough of them.
Rule 7: What dating can teach you about landing clients
Courting prospects is like dating in high school – if you see someone you’d like to go out with, you have to convey that you’re interested but not desperate. The same principle applies when talking to prospects in your pipeline – you want to communicate that you’d like to work with them, but that you don’t need to work with them.
One of the most important qualities to build into your prospecting mindset is patience - few things will scare prospects off is appearing to be in a hurry to get their business. One problem with having too few prospects in your pipeline is the pressure it puts on you to make each one of those prospects count. It’s hard to be low-key and casual if the prospect you’re talking to represents 10% of your pipeline of potential clients.
Rule 8: Build pipeline management into your weekly routine
The final key to effective pipeline management is scheduling enough time in your weekly routine for the three critical activities to make a pipeline work for you:
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Adding prospects to your pipeline:
Who are you going to approach to attend a client event or will you contact with an offer to add them to the invite list for your quarterly client lunches or your e-newsletter?
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Moving prospects through your pipeline:
What are you going to send prospects to stay top-of-mind and to reinforce the value that your provide to your clients?
- Getting prospects out of the pipeline:
Has it been 12 months since you’ve tried to check in with someone in your pipeline? If you haven’t at least tried to reach someone in your pipeline, the question can be asked as to whether they really qualify as a prospect.
For more details on the mechanics of building and managing a prospect pipeline, read How to follow up without being a pest and How to turn acquaintances into clients.
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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