5 criteria for successful prospecting strategies

Financial advisors need new clients. To do this, they need to keep their prospecting pipeline filled. Financial advisors, coaches and other experts often offer systems for this. It can be confusing, however, to know what to look for in a successful prospecting strategy. Over the years, these are the five criteria I’ve learned to look for:

  1. It must be proactive. You must drive the near-term results. Many agents and advisors announce they only add new clients through referrals. That is great if the referrals flow on a regular basis, but it is not a proactive strategy. You cannot call clients and insist they send you referrals. When I was a financial advisor, I sat next to another advisor who called a client and said, “You haven’t sent me any referrals lately.” Would that motivate the client? Probably not. The ideal prospecting strategy is one that you can dial up the results when necessary by increasing the effort you put into it.
  2. It attracts the target audience. Suppose you only wanted prospects who could invest $250,000 immediately. Maybe your target audience is the top 5% of the local population. Now imagine you did a seminar targeting the general public and you filled the room. This could mean, though, that for every 100 people in the room, only five would qualify to be your clients. What are you going to tell the other 95%? How much did it cost you to fill a room (and feed them) only to turn away 19 out of 20 people? Your prospecting strategy must focus on your ideal prospects. Those are the ones you want to reach.
  3. It delivers the message. We have all seen confusing ads on TV that leave us wondering, What is the product? or What do they want us to do? Sometimes agents and advisors hold seminars with an educational theme, but without the message of, “Here is how I can help you.” We need to include a message, or a call to action, for those we’re communicating with, similar to the TV ads that say, “Ask your doctor about …” or “Call for a free estimate …”. The ideal prospecting strategy delivers the message that you offer valuable services and you want to be contacted.
  4. It is cost-efficient. People still do seminar mailings. You probably get them inviting you to dinner at a nice restaurant to learn about retirement planning. If you do not get them, your parents probably do. The response rate on mailings is historically small, although dinner at a nice restaurant is a good incentive. When you calculate the cost of the mailing, the response you get, the no-shows and the cost of the dinner, you are paying a lot of money for each seat you fill. Years ago, I figured out that if you could guarantee everyone you invited would attend, you could probably buy them a seat at a Broadway show at the same cost! When you calculate how much revenue a new client might represent, the cost of gaining each new client must justify the amount spent .
  5. It can be measured. How do you know your prospecting strategy is working? Let us assume you would be adding new clients from time to time, regardless of whether you implemented this new strategy. How many new clients came from your new strategy? How many were walk-ins? How many responded to the firm’s new national ad campaign? When you see ads on TV or hear them on the radio, they often say, “Enter this code …”. This probably tells the firm how the lead was acquired. You are investing time and money in this new program. You need to be able to determine for yourself if it is working or not. Was it money well spent?

There are other factors that determine if a prospecting strategy will succeed, but these are five major criteria.

Bryce Sanders is president of Perceptive Business Solutions Inc. His book “Captivating the Wealthy Investor” is available on Amazon.

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