From telemarketing and networking with retirees to cold calling and TV advertising, life insurance and financial service sales professionals are using a host of methods to reach prospects.
By far the most popular of the techniques is also the most effective: Nearly 9 in 10 of the respondents in our “2014 Advisor Survey” secure introductions to prospects through referrals. The percentage of users for other prospecting methods drops off significantly thereafter.
Of the various other techniques identified in the research, none is employed by more than half of the survey respondents. Of the top eight techniques, the adoption rate in most cases ranges between the high single digits and 20 percent. What follows is a review of the five most popular prospecting methods used by advisors.
Referral marketing: a favored method of advisors
Referrals are by far financial service professionals’ most common source of leads to prospective clients. Nearly 9 in 10 (87.29 percent) of the respondents in our Advisor Survey prospect depend on referrals.
For many, however, the problem is getting these qualified prospects: Advisors all too often are ineffective when eliciting from existing clients names of people to whom the client can offer an introduction.
Sometimes, the approach is too aggressive, as when the advisors makes the client feel obliged to provide names of friends and acquaintances, the referrals deemed by the advisor as a form of compensation. Or the advisor may fail to overcome client concerns, such as whether the advisor can be counted on to use the referral appropriately — and not generate blowback from an angry prospect.
How one asks for referral is key. Using such phrases as “I’ve never met anyone I couldn’t help” or “I would love the opportunity to help the people you care about,” can lend the request more positive tone. Also constructive is to ease a client’s concerns by describing how one would approach referrals.
If the client proves amenable, the next step is to make the request specific (e.g., by assisting the client in identifying good referral prospects; or by independently identifying targeted prospects, then asking the client for a referral).
Partnering with other professionals
With tax season now in full swing, you may well be looking for opportunities to convert clients’ and prospects’ heightened awareness of current or potential tax liabilities to solutions that will help them attain their financial goals.
You’re not alone. Nearly half (44.92 percent) of the advisors surveyed for this report generate leads to by partnering with other professionals — notably certified public accountants and estate planning attorneys — who can assist in formulating tax-avoidance strategies for high net worth clients.
Many of them, too, are goldmines for leads to client prospects. These alliances run from the informal (e.g., ad-hoc exchanging of leads to clients in need of insurance and financial planning services) to the formal, wherein each advisor’s contribution to the partnership is specifically delineated.
Beyond securing leads and participating in co-marketing arrangements (such as joint-seminars), financial advisors can leverage a CPA’s or estate planning attorney’s expertise to identify gaps in planning.
A CPA might uncover, for example, the need to adjust a client’s financial objectives or cash position because he or she is no longer employed; or because a business’s holdings of stocks and other assets are not advantageous from a tax perspective. Likewise, an estate planning attorney might flag the desirability of implementing an irrevocable life insurance trust (ILIT), distributions from which are estate tax-free.
Direct mail: Still relevant in the digital age
For many digital-savvy advisors, particularly those younger than forty, direct mail marketing of products seems like an outmoded way to prospect for clients. Or so it would appear until you consider these facts: