In last month’s article, I described how simply trying to do the right thing for my clients led me to a fantastic opportunity for success. By focusing on the universe of conservative, income-generating investment options, I was able to become my own competition in a business niche I created.

The same opportunity is available to you, and this month, I’d like to elaborate on the three areas of focus that have really enabled me to grow my business: Lead generation, practice management and a turnkey sales process.

Generating quality leads

Let’s talk a bit about the critical first step: Lead generation. Lead generation should be your No. 1 job, because every hour you’re not in front of a qualified prospect is an hour you’re underpaying yourself. Last month, I talked about the imaginary money machine that could legally print 10 $100 bills each hour. Generating quality leads is the real-life money machine, because every hour you spend with qualified prospects is worth $500 to $1,000 to you.

So what forms of lead generation are there? Let me begin with seminars. Now, you may have heard that seminars are dead, and that they no longer work. I was told the same thing 10 years ago, and I want to assure you that they weren’t dead then, and they aren’t dead now. If you think you have the talent for public speaking, I believe seminars are the best approach to use for lead generation. It’s no secret. If you look at the top producers who are doing $20 million a year in annuities, 90% of them are seminar people.

If you don’t have the capital to do it, I urge you to find it. However, if you can’t find the money or just aren’t comfortable with that kind of capital investment, you can still do public speaking events with affinity groups (clubs or organizations) or adult education classes at your local high school or community college. If you look through your contact list, you’ll find people who are well placed in a club or organization. Ask to present at one of their meetings — a more economical approach.

What if you’re not comfortable speaking in front of groups? You can still grow your business. Use direct mail, for example. Sure, it’s more work, but if you do direct mail and do it consistently, it works. There are also companies today who will make phone calls and schedule appointments for you.

Best of all

Then there are referrals, the best leads of all. Leading that pack is the unsolicited referral. So how do you get those?

First, you have to create the “wow” experience for clients. The primary reason we lose clients is they feel they don’t hear from us as often as they should. We need to over-service our clients. For example, I believe every client needs to receive a phone call from our office every three months. I also use newsletters, cards, and whatever else it takes to stay in touch.

Twice a year, we’ll hold referral appreciation parties. If they referred someone to me in the last six months and we actually met, whoever referred them gets to come to the party. It’s usually a themed event, and we raffle off something significant. For example, one of our parties was held at a winery, and the gift was a trip to wine country in California. Once you do a couple of these, people start asking themselves, “Who can I refer so I can go to the next event?”

Another effective technique is to take five or six of your top clients and create a board of directors. Tell them you need their help in determining how we can improve our client service and how we can grow our business. If you prove receptive to their ideas, they’ll begin to feel like they’re your partners in this enterprise. Ultimately, as you talk about how to grow the business, the topic of referrals will come up as a natural part of the conversation. As board members, they will feel obligated to begin referring business themselves. And because they are your top clients, you’ll be getting the kind of referrals you really want.

Some of you are thinking, “I can’t afford any of this.” I want to challenge that way of thinking. One misconception many financial advisors share is that they think of themselves as salespeople. In fact, we are business owners.

As advisors, we’re taught to tell our clients to pay ourselves first. We need to do the same thing as business owners. Pay your business first. The first 10%-20% of your revenue shouldn’t even hit your checkbook. Put it back into the coffers and use it for marketing and lead generation to grow your business. That’s what grew my business.

There are numerous ways to improve your lead generation. My point is you need to do something. Above all, make the commitment to stick with it, and change your techniques, until it works. If you resolve not to give up, you’ll make any lead generation system successful.

Practice management

The first key to good practice management is something I mentioned in the previous article. If your time is worth $500-$1,000 an hour, don’t spend that time doing $20-$30 per hour work.

I’m amazed when I talk to advisors and they tell me they pick up dry cleaning or do their banking during the business day. They are robbing themselves of the ability to generate income. Those are obvious mistakes. But there are several tasks many advisors take on that are less obvious income robbers.

Do you do any paperwork? Do you handle incoming calls? Do you make calls to schedule your appointments? Stop it. Depending on your location, you can pay someone $10-$30 an hour to do those things. Think about it. When you call your doctor, do you talk to him or her? No. And as long as you receive prompt service, you don’t care.

Granted, if your current staff consists of one part-time assistant, this won’t happen overnight. Building an office is a process. You need to begin thinking in that direction or it won’t happen.

When I began the process of putting my office together, I sat down and wrote down some goals regarding what I wanted my ideal day to look like and how I wanted my office to function. As I was doing that, I really didn’t know how I would accomplish it, and part of me didn’t even believe it could happen. But the human mind is an amazing thing. Once I wrote very sensory-specific goals — goals that depicted a specific outcome — my mind found ways to achieve them.

Professionalism is crucial. When clients come to my office for meetings — and they all come to the office, because driving to meetings isn’t $500/hour work — they see that I have a staff. As they wait, they will see the client I’m with leaving the meeting. After we’ve met, they’ll observe my next client sitting in the waiting area — just as they would in their doctor’s office. Subliminally, that sends the message that I am a professional, not a salesman.

I believe in the 40-by-40 work year. I don’t think you have to work more than 40 hours a week, or more than 40 weeks a year, to make a million dollars in this business. I take a lot of time off because I work hard when I’m working. This is a challenging, stressful business, so you need to work hard and play hard in order to keep yourself sharp.

Sharpening your sales skills

No matter how good you are at selling, you can always improve. That’s true for you, and it’s true for me. Interestingly, improving your closing ratio by 10% will actually double or triple your sales. How? Because now you’re going to be getting the bigger cases that you might otherwise have lost.

The key is to never wing it. If you find out you’re using a completely different approach every time you go into a sales situation, you’re winging it. You need a repeatable, effective sales process you can use time after time.

Ideally, the sales process should be a discovery process. As Brian Tracy says, “Telling is not selling.” Wouldn’t it be great if you could just tell someone they have a problem, you have the solution, and they would simply buy it? We know it doesn’t work that way.

Instead, you need to bring them through a discovery process where, with your help, they discover they have a problem. Then, with your help, they discover you’re the person who can solve that problem. Let’s face it. People don’t change strategies when they find one that may be a little better than what they have. They change when they have a problem, and they have to change.

I don’t advocate scare tactics. Those are for amateurs, and eventually they’ll put you out of business. I’m talking about education. The sales process should be more like judo than karate. In karate, it’s block and strike, block and strike. That’s akin to overcoming objections in a traditional sales process. Judo, on the other hand, teaches you to use the momentum of the other party to win.

My process

The first step in my educational sales process is to do a CFQ — a fact finder. If you want to be viewed by your clients as a professional, you can’t make any recommendations until you have the facts. But don’t get analysis paralysis. It takes me 10-15 minutes to get a CFQ. You’re after a general idea of their financial position and history.

The second step is qualifying prospects, and I believe there are two ways to qualify them. The first is by their advisor propensity. Some people are multiple advisor prospects, some single advisor, and some do-it-yourselfers. You need this information to determine how you will relate to them.

A multiple advisor prospect, for instance, is very unlikely to turn over all his assets to you. He diversifies not by investments, but by advisors. When you come across a multiple advisor prospect, you always want to ask this question: “How would you rank your advisors in terms of performance?” Nail them down on this one.

Their advisor propensity will likely determine whether you get all, some, or none of their business. If it becomes clear you’re not going to get anything, you need to “garbage pail” that prospect. Make the meeting short and sweet. Don’t schedule a second meeting. This is important, because the most important thing we have is our confidence. Mine is only as strong as my last sale, so I don’t need to get turned down by the same prospect more than once.

Now in step three it’s time to take them through a track. A track will lead to the point where they discover for themselves that they have a problem. I have an inventory of nine turnkey tracks from which to choose depending on their particular situation.

Once they’ve made some discoveries, they’re starting to think you sound like you know what you’re talking about. But they’re also wondering how they can be sure you know more than the advisor they’ve trusted for the past 12 years. Step four consists of building a wedge between the prospect and their current advisor. I have 12-15 wedges I use, and all of them center around the fact that their advisor is simply following a flawed business model. Stockbrokers sell stocks, so it’s not surprising that they aren’t familiar with the products I specialize in.

Step five is your commercial. We all have a “commercial”, but I’m convinced we should never give a prospect our commercial until they ask for it. If you do a good enough job in steps three and four, your prospect will be enticed to ask you how they can become a client.

Now it’s time for step six, the close. The close for me is getting a client to commit to me in writing as their advisor. I may not get a product sale until the third or fourth meeting, but I know that if they become my client, I will get a sale. And by the way, if a client doesn’t commit to me after the first meeting, I don’t schedule a second. My time, and your time, is valuable. Resist the temptation to do unpaid consulting.

The final, seventh step is the one leading into the next meeting. This is the time when my new clients choose the products they want. I go through all their options with them and they choose how to allocate their resources. So from a compliance standpoint, I’m really not selling anything because they are choosing the solution. That’s the beauty of an educational approach.

David J. Scranton, CLU, CFP, CFA, received a bachelor’s degree in mathematics at Trinity College and went on to receive a master’s degree in the science of financial services. He is president of Scranton Financial Group and The Advisors’ Academy. Scranton can be reached at Scranton Financial Group, 1921 Boston Post Road, Westbrook, CT 06498. Telephone: 860- 399-8202.