A pipeline-management process

Coach says: I agree that providing financial advice cannot be rendered in an assembly line-like process. There are too many variables in people’s lives, too many emotional differences and too many products and services for you to expect to be able to follow exactly the same procedure every time. However, that should not prevent you from using standardized processes for efficiency in your operation. The key is to ensure that while your practice may be organized into routines, your recommendations and implementation plans are fully customized to each client’s situation.

In fact, the efficiency you are seeking should begin well before someone becomes a client: that is, with your pipeline-management process. Top-performing advisors are extremely good at managing the flow of prospects through their business-development pipeline. On average, these advisors have more prospects in their pipeline than most advisors; they keep those prospects there longer; and they have a disciplined process for deepening and strengthening the relationship along the way.

Because top-performing advisors understand the metrics of their businesses, these advisors can predict the conversion rate of prospects into clients with reasonable accuracy, which allows these advisors to control the momentum of their business.

There is a difference between a “funnel” approach to business development and a “pipeline” approach. Most of us went through some sort of sales training during our careers in which we were taught that as long as we put lots of people into the top of our sales funnel, a sufficient number would come out the bottom for us to build a successful business. So, our focus was on finding people to put into that funnel.

That was an effective system and, in fact, the one I used to build my own practice. The problem with this approach, however, is that while it is effective, it is not very efficient because we often end up with a lot of people in the funnel who are never going to become clients. So, our resources – mostly, our time – are used up on prospective clients who never materialize.

A more efficient approach, in my view, is to think of your business-development system as a pipeline in which the only people who go in are those whom you want as clients and with whom you have a reasonable expectation of doing business.

Your objective in pipeline management is to move prospective clients along a continuum that steadily increases trust, confidence and rapport. This process enables you to demonstrate your value in a progressing manner, so that prospective clients develop a greater understanding of what you do and why it’s important for them to take advantage of your knowledge and advice.

Top-performing advisors go even further. They work to create such a positive impression through the pipeline process that participants will want others they know to have the same experience. Top-performing advisors even get referrals from people who don’t become clients.

How do you decide who goes into your pipeline? Keeping in mind that only people you want as clients and with whom you expect to do business within a reasonable time should be in your pipeline, there are essentially three groups of candidates:

1. existing clients;

2. works in progress (WIPs);

3. qualified prospects.

The best opportunity to grow your business is probably through internal marketing to people who already know and trust you: your clients. That’s why you should always have some current clients in your pipeline – those who will have changing needs, will benefit from an improved ability to access additional products and services, or may require a review of their current program.

Similarly, people with whom you have already started a conversation (WIPs) represent a better opportunity than someone who has had no direct exposure to your value proposition.

Finally, it is essential that there be a flow of new candidates who meet or, at least, come close to meeting your preferred client profile. These people are attracted by your various external marketing activities and, until their needs and resources are known, represent unknown opportunities.

So, how does this strategy actually play out in a standardized process? Here is one process that is used successfully by a top-performing advisor with whom I work. Don’t worry if it appears more complex than one you might want to implement; it is just an example of a comprehensive process that fits this advisor’s way of doing business.

– step 1: the welcome. When a new, qualified lead is obtained as a result of a referral or a marketing activity, the name is entered into the advisor’s customer relationship management system, which automatically generates a “welcome” message. That message lets the prospect know that the advisor will be following up shortly for a personal introduction. This message often includes a copy of the advisor’s capabilities brochure and latest newsletter.

– step 2: the introduction. An appointment is arranged by the advisor’s staff for a telephone call or face-to-face introduction. If the advisor has an upcoming event (which often is the case), the prospect might be invited to attend. Either way, a brief conversation takes place wherein a meeting is scheduled to discuss the engagement process. The advisor might send some relevant material to begin the process of strengthening the relationship.

– step 3: the engagement. Before any agreement is consummated, a conversation takes place to determine if there is a fit between the prospect’s needs and the advisor’s capabilities. This includes a “values” discussion, a summary of the prospect’s “big picture” and a description of the engagement agreement. Then, a discovery meeting is scheduled. The prospect is advised what information he or she is to bring to the meeting or send in advance. Additional material may be provided.

– step 4: the discovery. The fact-finding session includes the completion of a planning questionnaire, a risk-tolerance assessment and a document checklist. The advisor has a “reality check” conversation to confirm that the objectives stated by the prospect are reasonable, given his or her personal circumstances. If the gap between what the prospect desires and what is reasonable to expect is too wide, the advisor will attempt to bring some reality into the conversation.

If the prospect resists, the advisor will terminate the process rather than allow the prospect to have expectations that cannot reasonably be met. Assuming, however, agreement is reached, a presentation is scheduled.

– step 5: the analysis. The advisor completes his assessment of the prospect’s (now a client) situation and determines his recommendations. Interestingly, this advisor prepares a binder for the client with all relevant material, as well as a presentation to be used when presenting the recommendations.

– step 6: the presentation. The advisor reviews the client’s situation, describes the findings of the advisor’s analysis, illustrates his recommendations and seeks agreement to proceed with implementation.

– step 7: the implementation. The required paperwork is completed and the next review is scheduled.

Although there are seven steps in this process, they need not all happen independently. In fact, it is quite common for the first three or four steps to occur at the same time. The value is in the consistency and efficiency of the process and its ability to deepen and strengthen the relationship gradually while allowing for customization of recommendations and implementation to recognize each client’s individual needs.

George Hartman is managing partner of Accretive Advisor Inc. and CEO of Market Logics Inc. in Toronto. Send questions and comments to george@marketlogics.ca.

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