In a world of prospects, it’s difficult to know where to start when developing leads. New Jersey-based estate planning attorney Gary Garland says, “Keeping business flowing is the Holy Grail of the estate planner.” So how do advisors and planners develop leads and keep the pipeline full? Following are five surefire ways to stir up business.
One of the most popular lead generators is the seminar. Most advisors cite this as a tried-and-true method to attract new clients.
Catie Fitzgerald is the founder of Financially Savvy, a company that conducts public seminars and one-on-one coaching to educate investors in making their own financial decisions. These public and private seminars deal with budgeting, selecting investments, retirement planning and debt management.
She invites people — about 40 percent of her audience is seniors — to seminars through direct mail, advertising, networking and partnering with other professionals.
“In exchange for access to [other professionals'] mailing lists and a letter of introduction, I give them the opportunity to speak at my seminar. I also give them space in my online newsletter to promote their business,” she says, describing her mutually beneficial alliances with other professionals.
Fitzgerald says there is a fundamental mistake advisors make when it comes to planning and conducting seminars.
“Many financial advisors think they should give the seminar for free. After having conducted seminars that I gave for free and ones for which I charged, I found that the quality of prospect increases when you charge for the session,” she says. “For a two-hour session, you could charge a $25 donation to your favorite charity. The prospects I’ve interviewed on the topic indicated that in their mind they knew that free really meant they would face a sales pitch.”
Keith Johnson, vice president of the business development and branch development divisions of AIG Financial Advisors, suggests using seminar marketing as the primary way to meet new clients. AIG uses a non-profit speakers bureau to provide financial education to the public. Advisors may not sell while leading one of the workshops, but they usually develop relationships with potential new clients.
Networking and alliances
Networking with other advisors at industry events is another inexpensive way to develop leads and is very common among advisors. Developing trust is often the best way to lay the groundwork for future business dealings. These relationships then blossom into recommendations that spawn more clients.
Salem, Ore.-based Willamette Financial offers continuing education seminars as an alliance with CPAs. These eight-hour classes are interactive and cover various subjects, and are taught by professionals. The sessions are offered to CPAs, product company wholesalers and business consultants. The classes are credited with the creation of business connections and sales.
Larry Klein, a Certified Retirement Financial Advisor in Walnut Creek, Calif., says smart advisors align themselves with other professionals.
“The right way is to contact the other professional and explain what you can do for them. Many advisors call and ask what the CPA or attorney can do for [them] — not a good approach. If the advisor starts the relationship by showing where they can add value to the CPA or attorney, this bears fruitful referral relationships,” he says.
Fitzgerald attends at least one networking event each week, introducing herself to as many people as she can, identifying the kind of referral each person needs and tries to find someone who matches that profile. She says giving referrals often means getting them in return.
“I also always ask my clients for referrals at the conclusion of every contact,” Fitzgerald says. “Simply ask, ‘Who else do you know that might appreciate an invitation to my next workshop?’ With-in the first year of being a financial advisor, 50 percent of my new clients came from referrals, either from professionals I met at networking functions or from other clients.”
Direct mail programs
Sending monthly or weekly newsletters keeps your face and message fresh in people’s minds. Garland sends out a turnkey estate planning newsletter on a monthly basis to “any advisor who falls into my estate planning web.”
Johnson, however, says these campaigns must be more tailored to a specific type of client to be effective. He says advisors with AIG include material that appeals to the target market.
Klein says advisors often use postcards offering booklets on topics of interest to recipients. He thinks this approach often fails, though, because people are being pitched a product they don’t necessarily want.
Willamette’s founder and owner, Alan Koloen, recommends using direct mail only as a way to promote seminars or as a recruiting tool. The mailers help with name exposure and grab the attention of others. He says coupling it with another mass communication tool, such as print media, when not promoting a seminar, is more effective.
Traditional approaches to media exposure, such as print advertisements, garner business, but some advisors have taken it a step further.
Jeff Kowal is the founder and president of Kowal Investment Group located in Elm Grove, Wis. Once a week, he hosts a one-hour, call-in radio show called “The Retirement Clinic.” He also provides daily market reports on the same station to the Milwaukee area. He started in radio in 1996 and by 2001 had the backing of a 50,000-watt talk-radio station, with several Saturday morning shows.
In order to distinguish himself from the other shows, he chose the subject of retirement and targets those already in retirement as well as those about to retire. He believes it has helped in name recognition but says it is difficult to track exactly how much business it has brought him.
Integrated Direct and Integrated Interactive are wholly owned direct and interactive marketing agencies based in New York. They incorporate the high traffic volume of the Internet with the generation of leads through a variety of sources, including pay-per-click advertising programs. The cost for these can range anywhere from $.30 to $10 per click. They account for approximately 20 percent of the companies’ business.
Web-based lead management companies
Leadbot, an independent Internet marketing company based in Tempe, Ariz., began in 1998 in response to the growing number of consumers using the Internet as a research tool to start the buying process.
Individual producers, as well as executives in the market for regional and national producers, use the service to get leads for their businesses. The leads are all Internet-based and come namely from search engines and marketing affiliates. Leadbot itself sells no financial products.
Leadbot’s president and co-founder, Ben Wagner, says there are other similar companies, but his sells only exclusive leads, opposed to a lead sold with full disclosure multiple times.
The tradeoff with exclusive leads is higher cost, but advisors are not then in direct competition with three to five other advisors chasing after the same lead.
“We believe our biggest differentiator lies in the amount of technology that goes into qualifying a lead before it is released to a customer. Our systems analyze both the telephone numbers provided and words used in any prospect’s quote request to determine whether it should be discarded as bad or frivolous information. Leads which pass both tests then get an automated phone call to give the prospect a choice to opt out of the process prior to being assigned a producer,” Wagner says.
Avoid these mistakes
Developing leads is not easy. An advisor’s success often depends on numerous external factors and where the client is in the decision-making process.
There are some things you can avoid to increase your chances of success:
1. Develop a plan and know the ratios. Koloen says it is important to understand how the ratios work. “Seldom is there any attention paid to the end result beyond making appointments. registered reps do not calculate the number of contacts it will take to make one appointment, and how many appointments it will take to make a sale, and how many sales it will take to consider this marketing activity a success. Without knowing these critical numbers, advisors often have too high expectations and too few contacts, which leads to frustration because they were unable to generate quality leads.”
2. Don’t let fear of rejection hold you back. Rosalind Joseph of AXA Financial in New York City believes success as a financial professional takes strong business skills, as well as initiative. “Failure to implement a sufficient suite of planned activities, (i.e., developing prospects and appointments) and exhibiting poor networking skills are some common missteps.” And the hardest part about developing a lead is getting over the fear of rejection.
3. Don’t go it alone. Garland says the biggest mistake advisors make is trying to handle everything on their own. He states the second biggest mistake is going beyond their level of expertise by guessing at an answer.
Both high- and low-cost solutions exist for keeping the pipeline full. Even in a new market there are many ways to get started and keep the business flowing. Don’t forget that constant reminders of your name and the services you provide will bring clients to your doorstep.