Beverly Flaxington is a practice management consultant. She answers questions from advisors facing human resource issues. To submit yours, email us here.
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Dear Bev,
One of the most frustrating things I encounter in working with prospects for our advisory firm is the lack of response. We will have a meeting with someone who obviously needs our help, we’ll follow up and follow up again and again. We have a high rate of client satisfaction based on our annual surveys. Our performance has been strong even with the market ups and downs of the last few years. Our planning process is our own – not a packaged software product. We tell our story well (I have asked clients about this and I always get good feedback). What should be working is working well.
Why do we have a lower than 50% close-rate for new conversations?
We do dinners and seminars to attract people and we have a very active social media effort. Most prospects are in the “cold” category – they aren’t coming from existing clients like many advisors. It’s a great funnel for us, and we’ve honed the process so we are talking to between five and 10 new prospects each and every month. We used to close upwards of 80-90%. But the numbers have dropped significantly. I think common courtesy has gone away. Why spend time talking with us when you don’t plan on following up?
P.A.
Dear P.A.,
There are many sales-process questions I would like answered before I recommend what to do:
- I understand these are “cold” meetings, but do you do anything in advance of the meeting to gauge the person or couple’s interest in working with a financial advisor? Or to identify a stated need they might have that would encourage them to want to make a decision? If you schedule a meeting with someone, it can be in the best interest of your time and theirs to have a short pre-meeting discussion to make sure you are focused on the right things. You can frame the need to ask a few questions as wanting to make best use of their time and focus on what’s meaningful to them. Most people like someone who values their time (it’s our most important commodity), and if you explain your desire to focus on things they care about, they will likely share some insights with you. If they don’t want to have a pre-meeting discussion and tell you it is just an exploratory meeting and they are simply hoping to learn more about you, that’s a flag right away that lets you know they may be in very early stages and do not have a real interest.
- In the first meeting, are you asking questions about how they make decisions? Unless you can get someone to articulate a clear decision-making process, and you can “see” the steps you will need to take to help them decide, you are going to be operating in the dark about what they need and when they need it. If you are asking this question and you aren’t getting a clear answer, you have someone in front of you who probably isn’t interested – yet.
- Do you ask the “obstacles question”? If you ascertain some level of need, let the prospect know how hard it can often be to make a final decision. Ask them directly, “What do you see as getting in the way of making a decision to partner with us in this important endeavor?” Many advisors are hesitant to ask this because they don’t want to get bad news – i.e., find out the prospect isn’t so interested. You want to know. Why waste your time with someone who has not confirmed a desire to decide?
These are qualifying points – make sure you know enough about the prospect to confirm they are serious,you know how they will make the decision, and you have challenged them to think about what might slow them down. Next, let’s look at some language you can use to prevent the scenario where you think you are moving forward, but they choose not to respond to you.
- Never give important information like a final outline of a plan, an agreement to sign or specifics on changes you would make to their investment portfolio without something in return. This requires explaining, in advance, the sales process and setting expectations: “Our process typically involves learning about you, and then sharing information about how we work with clients. If we both agree we want to move forward, we will want to obtain information about your current financial situation and decisions and then we’ll run scenarios. We will want to ask you a number of questions to create the outline of a plan. Before we walk through all of that with you, we’ll want to make sure that if you like what you hear and see, you will be ready to make a decision to move forward or not. Does that sound agreeable to you?” This doesn’t ensure your prospect will follow the process but it does increase your chances they will.
- Let the prospect know, at the beginning, your job is not to “sell” them on working with you. Your job is to help them make a sound decision that is right for them and their family. This way you put yourself in the role of their partner in coming to an end decision, and not the salesperson trying to convince them of something. If your job is to help them decide, you have to let them know you are committed to seeing this process through to the end where they make a final decision. This can help with the “drop-off” factor where someone doesn’t respond to you. Make it clear: “No” or “not now” is an answer you will accept; you just don’t want to leave things hanging with no end.
- Call out the process in advance. “One thing we find often happens is that we go through this initial process with someone, and we believe we’ve had a great conversation. But then life intervenes, and they get busy or they aren’t ready to decide. Making no decision is a decision, so we don’t like to keep following up and bothering someone if they aren’t ready to move forward. What will be the best way to ensure we don’t fall into a situation where we are calling and emailing you and you aren’t responding because you are not ready? This is uncomfortable for us and certainly annoying to you.” Stop talking and let them respond as to what they will do or how they want to work with you. Often if someone isn’t serious, when you present this problem to them in a non-aggressive but curious way, they will tell you they aren’t ready to make a decision!
It can be hard to do the follow-up if you haven’t qualified, set expectations, and called out the tendency for things to go into a black hole. Set these meetings up a little differently going forward to shift this dynamic. The most difficult competition is “inertia,” and it is an easy one for many people to fall into. Avoid this with your prospects.
Beverly Flaxington co-founded The Collaborative, a consulting firm devoted to business building for the financial services industry, in 1995. The firm also founded and manages the Advisors Sales Academy. The firm has won the Wealthbriefing WealthTech award for Best Training Solution for 2022 and 2023. Beverly is currently an adjunct professor at Suffolk University teaching undergraduate and graduate students Entrepreneurship and Leading Teams. She is a Certified Professional Behavioral Analyst (CPBA) and Certified Professional Values Analyst (CPVA).
She has spent over 25 years in the investment industry and has been featured in Selling Power Magazine and quoted in hundreds of media outlets, including The Wall Street Journal, MSNBC.com, Investment News and Solutions Magazine for the FPA. She speaks frequently at investment industry conferences and is a speaker for the CFA Institute.
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Beverly Flaxington is a practice management consultant. She answers questions from advisors facing human resource issues. To submit yours, email us here. 
