“You need to cold call.”
We regularly repeat this to advisors we meet because they often rely heavily on cold calls.
Although referrals are great for bringing in new business, they’re inconsistent and unreliable. If the referrals dry up, business growth halts. Still, most advisors prefer referrals over cold calling because the prospects are already vetted and the advisor doesn’t need to work so hard at selling. Better yet, referrals don’t require any additional investments.
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In their defense, cold calling requires dedicated resources — someone needs to sit and call from a list of leads — so many advisors continuously put it off, telling themselves they’ll get to it tomorrow. That tomorrow never arrives and advisors continue to focus on what they do best and are most comfortable with instead of putting on their salesperson hat.
To jump into cold calling faster, advisors can hire someone internally to manage the responsibility. This isn’t a perfect solution, however, as it generates its own mix of pros and cons. If the hire is talented and consistent, two of the biggest advantages an advisor will see are:
The full-time hire has more bandwidth than an agent at an outsourced third-party company.
The business will soon start to see new prospect opportunities as the hire brings in new faces.
The cons, however, may outweigh the benefits:
Most advisors aren’t trained HR professionals. When it comes time to hire, many will select new teammates based on what they know: someone who has the technical skills to be an advisor. Afterward, they’ll train the individual to make cold calls — but this is problematic if the advisor isn’t skilled at cold calling.
The business will pay for additional overhead. A new hire requires salary, office space, office supplies, and benefits.
The business may not need the bandwidth of someone cold calling 40 hours per week. At the same time, giving that person other responsibilities can distract them from cold calling.
With so many risks in managing cold calls in-house, it makes more sense for some advisors to hire out to a reputable appointment setting firm that specializes in cold call opportunities. However, be sure to vet the firm carefully; outside firms may not deliver good opportunities and the business may not have the experienced sales staff necessary to represent your business appropriately.
Once you’ve hired a skilled appointment setting firm for your team, you’ll see multiple advantages:
- Consistent activity. If you hire the firm to work on your behalf each month, you’ll receive a regular influx of appointments with high-value prospects.
- Trained sales staff. You don’t have to spend any time training the individual on sales tactics. Instead, they hit the ground running on your behalf.
- Opportunities for additional support services. For example, you could bring in a sales coach to prepare you and your team for the unique sales scenario of a cold meeting.
To be fair, hiring an appointment setting firm is costly — at first. However, most advisors recoup their investment within a year, and then they hit a revenue upswing as they continue receiving fresh appointments and new clients from the last year begin sending referrals. If an advisor isn’t ready for this influx of business, they’ll experience some growing pains as they adjust to the workload.
Cold calling is a time-consuming activity, but it’s a worthy endeavor for your company’s financial health. By reducing your dependence on referrals, your business can grow in new directions at accelerated speeds. Better yet, the new clients you bring in through cold calling will become new referral sources.
— Read 6 Ways to Capture the Rewards Hiding in the Unknown, on ThinkAdvisor.
John Pojeta is vice president of business development at The PT Services Group. Before he joined PT, he owned and operated an Ameriprise Financial Services franchise for 16 years.