The dating game

Instead, these senior decision-makers said, the sales skill that now is the most important is the ability to cultivate and manage a pipeline of prospective purchasers effectively. And, just as managing a prospect pipeline is critically important for salespeople who work for large corporations, so it is for every financial advisor.

The notion of a prospect pipeline is far from new; the idea that it takes patience and repeated contact to bring new clients on board has been around since the first merchants set up shop in Middle East bazaars in so many centuries ago. What’s new in the past 10 years is what it takes to nurture prospective clients.

Here are eight new rules on building your own pipeline of prospective clients:

– 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, neighbours and people you know from your golf club or Rotary club meetings are “suspects,” not prospects.

People you know 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: YOU CAN’T RELY ON GRAVITY

For the past 100 years, sales trainers have taught salespeople to think about sales as a funnel. Put enough potential purchasers in at the top and, even though some will leak out through holes in the side of the funnel, over time, gravity will 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 your pipeline and get them out the other end.

– RULE 3: FIND A COMMUNICATIONS CATALYST

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 too busy to respond to a check-in call that effectively says, “Just following up to see if you’re ready to buy yet.”

There always will be exceptions; maybe you’ll get lucky and hit prospects just as their existing advisor has done something to annoy them. That’s not something you want to rely on, though. While persistence still is important, it’s no longer enough. You need a communication catalyst, something that demonstrates at-a-glance value and positions you in prospects’ eyes as delivering differentiated value to them.

Some advisors do this via quarterly webinars or lunches to update clients and prospects on market developments. I’ve seen advisors use large-scale annual client events, while other advisors send prospects weekly or monthly emails with links to articles from major business magazines.

To be effective, your communications catalyst must be clearly credible and stand out from the reams of information that can overwhelm potential clients. That’s why sending an email with your chief strategist’s outlook is much more effective if he’s been interviewed in a national newspaper than if it appears with your firm’s logo at the top.

– RULE 4: YOU DON’T CONTROL THE TIMING OF PROSPECT DECISION-MAKING

In times past, advisors drove the timing of conversations with prospects. While you still play a critical role in initiating contact, more and more prospects have seized control of the timing and direction of decisionmaking when it comes to changing their advisors. Recently, the website About.com unveiled research on how today’s consumers go about making purchases in a variety of categories, unveiling 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 customer reliance on online sources for information that would have been supplied by salespeople in the past.

As a result, you have to recognize that your ability to control the timing of this type of decision-making is less than it was in the past.

– RULE 5: YOU STILL HAVE TO ASK FOR THE ORDER

Even if you do everything right, you won’t get the full benefit of this process unless you ask for the order.

I was reminded of this rule when I interviewed an advisor who had 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, the advisor built up a pipeline of hundreds of prospects with whom he was communicating on a quarterly basis. And it worked: every time his newsletter went out, his phone would ring as some of the recipients called for an appointment.

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.”

This step alone dramatically increased the payoff from the investment this advisor had made in building his pipeline. Even if you do everything else right, you still have to pick up the phone periodically and ask for the order.

– RULE 6: BOTH QUANTITY AND QUALITY OF PROSPECTS ARE KEY

When I talk to successful advisors about their biggest business challenge, at least 80% of the time the answer relates to attracting new clients.

My next question relates to how many qualified prospects these advisors are communicating with actively. 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 received recently when I suggested that this number was unlikely to be sufficient for the advisor to meet his growth goals.

The number of prospects you should 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 allow you to maintain a healthy business if there aren’t enough of them.

– RULE 7: DATING CAN TEACH YOU ABOUT LANDING CLIENTS

Another key to success in bringing new clients on board is striking the right tone in your conversations. 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. You want to communicate that you’d like to work with them, but not that you need to work with them.

One of the most important qualities to build into your prospecting mindset is patience. Few things will scare off prospects like you appearing to be in a hurry to get their business.

One problem with having too few prospects in your pipeline is the pressure that puts on you to make each one of those prospects count. That makes it 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: adding prospects to your pipeline; moving prospects through your pipeline; and getting prospects out of the pipeline.

All this takes much more effort than the historical approach of picking up the phone and asking someone if they’d like to do business.

Dan Richards is CEO of Clientinsights (www.clientinsights.ca) in Toronto. For more of Dan’s columns and informative videos, visit www.investmentexecutive.com.

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