Advisor Forum update: Efficient prospecting key to being up in down market

(November 20, 2003) Although his presentation contained a few complicated spreadsheets, U.S.-based advisor coaching guru Bill Good had one simple message for attendees at this week’s Advisor Forum in Toronto: the secret to being up in a down market is not only to bring in new clients and new assets, but to do so in an efficient manner that will expand, not shrink, your bottom line.

“If you have this much time that you’re allocating to work and you’re spending it mostly with clients, if you take a certain portion of that time and reallocate it to prospecting, because of the longer lifeline to open new accounts, your revenue will tend to go down, unless you are very, very careful in your planning and unless you can control the numbers,” warned Good.

The numbers Good continually referred to were variables in the prospecting and sales process, elements such as the number of leads produced per hour of cold calling, drive time for prospect appointments, time spent writing out a financial plan and percentage of second appointments that “close.”

According to Good and his spreadsheets, by improving skills in these key areas, reducing or eliminating elements such having to drive to see prospects and taking advantage of basic technology like the cut and paste feature of Microsoft Word, an advisor can cut the time required to land a new client from some 85 hours to approximately seven hours. “Sales is a numbers game and if you control each of the critical numbers and improve your skills in each of those areas, you can move your business from where it takes so long to open a new account to a point where prospecting is competitive with the time you spend with your clients,” noted Good.

Citing his own survey of approximately 1,900 financial advisors that he conducted for Research magazine during the equally tough business environment of 1990, Good reported that of the advisors who landed less than 25 new clients a year, only 8% were up 25% or more revenue-wise, while 38% were down 25% or more. By contrast, of the advisors producing 100 new clients per year, 57% were up more than 10% and 31% were up 25% or more.

Acknowledging that the industry has changed since 1990, Good’s best estimate for a new client target for today’s advisor to shoot for was between 50 and 60 each year.

Good also provided some useful benchmarks for advisors, especially those giving seminars — which, by a show of hands, was a healthy percentage of the room. The speaker insisted that in order for it to be viable prospecting strategy, you must have a 0.8% response to the direct mail promotion of your seminar and at least 30% of attendees must request a follow-up appointment. “If you cannot get 30% of the people attending a seminar to want to see you — your seminar is boring,” said Good.

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For details on the last Advisor Forum of 2003 in Halifax, please visit the Advisor Forum Web site by clicking here.

Filed by John Craig, Advisor.ca, jcraig@advisor.ca