Landing Clients Is Like Dating – and Seven Other New Rules for Adding Clients

Apr 18, 2013

The following is a guest blog post by Dan Richards, founder of ClientInsights, a leader in providing financial advisors with video-based content for their own use and for use with clients. Dan’s advisor newsletter is on my must-read list; start receiving his emails by visiting his site and signing up to get his insights delivered to your inbox now.

What’s the single sales skill that’s grown the most in importance compared to 10 years ago?

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 the most important compared to the past is, quite simply, the ability to effectively cultivate and manage a pipeline of prospective purchasers. And just as managing a prospect 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 Middle East bazaars 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.

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 neighbours 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: You can’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: Find a communications catalyst

Which takes us to the next new rule for converting prospects to 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. That’s not something you want to rely on, though. 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 use large-scale annual client events, still other advisors send clients weekly or monthly emails with links to articles from Business Week 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 Barrons or The Wall Street Journal than if it appears with your firm’s logo at the top.

Rule 4: You don’t control 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, more and more clients have seized control of the timing and direction of decision-making on moving to new advisors. Recently, the website unveiled 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.

Purchase Loop
Read the research on The Purchase Loop now.

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 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: Both quantity and quality of prospects are key

When I talk to successful advisors about their biggest business challenge, at least eighty percent of the time the answer relates to attracting new clients. Given that, my next question relates to how many qualified prospects they’re actively communicating with. The most common answer is between five and ten, 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

Another key to successfully 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 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 Appropriate frequency Invitation to talk further – err on the side of less often

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:
    • 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?
  • Moving prospects through your pipeline:
    • What are you going to send prospects in your pipeline 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.

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 – just add this to the list of things we used to take for granted that no longer apply. That’s why if one of your goals is to add new clients, consider whether you need to make improving prospect pipeline management a priority for the period ahead.

For more about the mechanics of prospect follow up, view How to Follow Up without Being a Pest or Turning Acquaintances into Clients.

The opinions and views expressed herein are those of the author and SEI bears no responsibility for their accuracy. Neither the author nor ClientInsights is affiliated with SEI or its subsidiaries.

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John Anderson

John Anderson

John Anderson is the creator and lead author of Practically Speaking blog and Managing Director of Practice Management Solutions for the SEI Advisor Network.

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