Getting Prospects to the Table

Q.  I'm having trouble convincing prospective clients to return my calls, let alone meet with me. How can I improve my prospecting efforts?

Most financial advisors understand that the advisory business is all about relationship cultivation, and that most new clients come from referrals from existing clients or centers of influence, rather than advertising, web sites, direct mail and other 'cold-contacting' techniques.

But even when you go do get a referral, it's not safe to assume that you're the only one going for this prospect's business. You may be competing with other advisors, and not even be aware that that such competition is going on.

As the advisory business becomes increasingly commoditized, it has become increasingly challenging for advisors to differentiate themselves in terms of the products and services they offer. Prospects don't care all that much about your firm's brand, its assets under management, or its new commercials. They want advisors who understand their needs and challenges, and are willing to go through the extra effort of demonstrating this knowledge before the relationship is formalized.

The Importance of Knowing Your Prospects

When I was in the advertising business, I once worked with an experienced salesperson who used to start off every sales meeting by asking, "So, tell me about your company." Inwardly, I would groan as a room full of product managers and marketing executives rolled their eyes in disbelief. Needless to say, these kinds of meetings were not particularly fruitful.

Today, you can't adopt a one-size-fits-all  approach when cultivating potential clients. Form letters and generic brochures won't work in an environment where people expect highly personalized service. You can't wait until you've signed the service agreement to gain a fuller understanding of your clients.  Instead, you need to create a customized prospecting strategy that reflects your understanding of each prospect's unique lifestyle, demographics and financial concerns.  Because if you don't do it, your competitors will.


Pump Your Referrals for 'Client Intelligence'

A referral from a client needs to be more than a name. Your client should know enough about this prospect to be able to give you some preliminary intelligence that indicates why the person may be looking for an advisor with your qualifications. Your client doesn't want you to make a fool of yourself (partly because it makes your client look bad), so he or she would be willing to provide enough 'inside information' to help you succeed. Don't be afraid to ask your client's opinion on the best way to approach the prospect (Email? Phone call? Snail mail? Seminar?) or what their concerns may be (Retirement? Portfolio performance? Estate planning?).

Conduct Additional Background Information

A simple Google search can identify a prospect's 'online history' that may provide valuable clues to their personal and professional interests. Viewing their Linkedin and Facebook profiles (if accessible) can provide additional information.

Send a Customized Introductory Communication

Once you've built a financial and demographic profile of your prospect, and your client has 'introduced' you to the prospect via a preliminary contact, start by sending this person a customized letter in which you introduce your firm and mention one or more situations you've identified through your background research.

For example, if this prospect is nearing retirement you may want to offer them a free, no-commitment meeting or phone call to answers any questions they may have about retirement income planning. You may want to include one or more educational articles on the topic along with your letter as an example of the 'value added' services you provide. At the end of the letter, mention that you'd like to call them in a few weeks to see if they have any questions about this materials. No matter what you do, don't push specific products or services or even your firm's capabilities. At this stage, your job is to promote your ability to solve their problems, not push products.

Some advisors may balk at this approach, believing that mentioning specific lifestyle situations may seem like an invasion of a potential client's privacy. This might be true if this were a cold contact. However, since this communication is a follow up from a 'warm lead,' the prospect shouldn't be surprised if you discuss what you've learned about them. In fact, most prospects will probably be impressed that you made the effort to acknowledge issues they may be facing--even if your assumptions are incorrect. 

Use Good Old Fashioned Snail Mail 

Unless your prospect is Mark Zuckerberg or the 25-year old CEO of an high tech company, you should send your first communication to a prospect via 'snail mail' rather than email. An attractive direct mail package featuring your firm's branding on your letter, articles and business card are far more likely to be read (and stored), than an email message that is likely to be lost in the hundreds of messages your prospects receive every day. Plus, your email could be inadvertently directed to your prospect's spam mailbox, where it will never be read.

Following Up

Given that this prospect has come through a referral, it's perfectly acceptable for you to call this person within a week or so after sending your letter. Since this person initially agreed to be contacted by you, the "Do Not Call" rules technically don't apply, since this is not an unsolicited communication.

The best times to call are between 5:30pm-6:00pm and from 7:00pm-8:00pm, since  chances are high that the prospect may be home from work. Make sure you start your conversation by introducing yourself, mentioning your client as the source of the referral, and asking if they received your recent communication.

Chances are they may not have read your materials and they may not wish to have a long conversation with you at the moment. That's fine. Your purpose for this call is to set the stage for the next conversation, whether it's on the phone or, preferably, in person. Let them recommend a time for you to meet or talk.

In the meantime, ask if there's any additional information they'd like to receive from you on issues of interest. They may not have any ideas, so be proactive in suggesting topics. Ask if they'd like to receive this information in print or via email, and fulfill their preferences accordingly. The key here is to keep your name and your value top of mind as you approach your first meeting.

It may take several phone conversations until you get to that first meeting, but by the time you're there this prospect should already have a positive impression of your desire for their business and your responsiveness to their issues. In a competitive situation, this can make all the difference.  

Agree? Disagree? Have additional prospecting tips? Comment below.

Social Media for Advisors, Part 1: Linkedin or Not Linkedin?

Q. Is using social media for my advisory business really worth the effort?

Most advisors aren't using social media actively. While many claim it's because their firm's compliance departments don't allow it, the truth is that it many advisors haven't really been able to figure out why they should use it or how it fits into with their other, more traditional client communication and prospecting strategies.

Contrary to the 'don't be left behind' warnings of the social media evangelists, you won't find yourself hopelessly out of date or start losing clients like flies if you don't embrace social media. In fact, you're far more likely to offend or lose clients if you use it ineffectively.  

There are some definitely benefits for using social media, particularly as a client-research tool. I'll be providing an overview of thes uses use in this multi-part series, Social Media for Advisors. This particular entry will focus on what I consider the best social media tool for financial advisors--Linkedin.

But before we get into this discussion, let's look at what the pros and cons of social media in general.

What social media is good for

Social media is most valuable as a tool for:

• Creating your professional 'brand'
• Identifying pontential referalls from existing prospects;
• Conducting background research on prospects; and
• Communicating generically to existing clients.

What social media is not good for

Conversely, social media is not particularly effective for:

• 'Cold contacting';
• Conveying critical information to clients; and
• Providing targeted, personalized communications

Now, for the most part, when people talk about social media as a branding and business-building tool, they're talking specifically about Facebook, Twitter, and Linkedin. Blogging is a whole separate medium that will be discussed in future different entry.

In future articles, I will weigh the pros and cons of these other media. Here, I will provide best practices for making the most of Linkedin's prospect and client research and referral capabilities.

Standard disclosure goes here: All of these suggestions assume that your firm is blessed with the most flexible and technologically 'with it' compliance and legal departments in the industry. In reality, everything you attempt to put out on Linkedin or any other social media site is likely to be heavily scrutinized and potentially neutered. So make sure that you fully understand your firm's compliance requirement viz-a-viz online marketing before you attempt this at home or at work.


Building an Online Brand

Before you even start thinking about how you're going to use Linkedin to gains hundred of new clients, it's critical for you to get your online 'house in order.' Your Linkedin profile is the image you wish to present to the world. Develop it appropriately. The areas you should focus on optimizing are those that are at the 'top of the fold,' the content that appear on the first screen.

Your Headline

This is essentially your personal branding statement. You could use a generic entry like, 'Financial Advisor at Highflying Investments,' but this just tells what you do, rather than what you offer. Try to fashion a headline that focuses on the value you bring to your clients, such as:


"Helping more than 200 families and institutions meet their financial objectives for 20 years."

Yes, it's a bit corny. But you get the idea. You want to quickly establish your credibility and the value your offer using as few words as possible.

Your Summary

Think of this as the area where you 'flesh out' your headline with a quick and concise summary of what you bring to the marketplace in terms of ideas, services, and benefits. This is not the place for you to brag about how much business you won last year or that you were your firm's #1 producer. Unless you're trying to get a job with another advisor, that is. That's a completely different article.  

Your Experience

Contrary to what is commonly believed, this does not have necessarily have to include all of your work experience dating back to your first job as a junior client service rep. You're far better off including the last 3-4 jobs you've had or your last 10 years of experience. If you were out of the industry for awhile, don't include the years you spent as a manager at Starbucks. It's not relevant to your clients or prospects.

Publications/Web sites/Blogs

If you have been published (and your pieces are viewable online), or have a web site or blog, absolutely inlude this information in your profile.

Honors and Awards

Only include those that will be relevant to your prospects and clients. Most of them are not going to care if you finished in first place in your local golf tournament.

Recommendations

If you can get recommendations from clients who are also Linkin members, try to do so. Nothing 'sells' you better than a satisfied customer.



Using Linked for Identifying Potential Referrals


I don't need to tell you that referrals from your clients (or from accountants, attorneys, and other centers of influence) are far and away the most effective way for getting new clients. A 'good word' from a loyal client is more effective than all the advertising, email, web sites, and cold calls you'll ever make.


In the 'olden days' you had to ask your clients for referrals and hope they gave you the name of someone who was worth your time to pursue. Today, your Linkedin network can do this for you. Chances are, most of your clients are already on Linkedin. If you're successful in convincing your clients to join your Linkedin network, you now have access to potentially thousands of prospects in their own professional networks.

You can research each of these contacts to uncover their backgrounds, demographics, and interests and use this information to build a list of potential referral candidates. 


Once you've created this list, you can contact your client and ask if they would be willing to introduce you to their contacts. It's critical to get your clients' consent first and have them make that first contact. If you attempt to reach out to a member of your client's network without asking your client first, your run the risk of embarrassing your client (if the prospect calls your client on the carpet for this 'cold contact.' Secondly, generally you only contact someone outside your network by inviting them to be part of your network. If this person doesn't know you, they can tag you with the dreaded "I don't know" label. Earn enough "I don't knows" and you'll be prohibited from adding anyone to your network unless you know their email address.

Don't go there.

Use Linkedin to conduct your research. Then ask your clients to make the introduction. And wait until your client gets back to you. Preferable, the prospect will provide his or her 'real; email address of phone number, rather than have you use the Linkedin interface to establish the relationship. But if the prospect doesn't want to connect with you, or your client doesn't wish to provide the referral, leave it be. Linkedin may be a lot of things, but it is not an effective cold contact medium. And you'll pay the price if you abuse the privilege.



Using Linkedin for Broadcasting Communications

Linkedin can be an effective medium for 'broadcasting' information to your clients, but keep in mind that most people use it professional purposes, not for client service. If you must post messages to Linkedin:f these three, Linkedin is far away the one social media platform that advisors should focus their time learning to use. The article offers some best Linkedin practices as well as some do's and don'ts.

1. Make sure your posts offer someting useful--such as financially related content that you believe your clients will be interesting and potentially actionable. Preferably, you can point to content you've written (or prewritten content available from your firm), rather than links to outside websites.  
2. Don't use Linkedin as a Facebook or Twitter substitute. Remember, unless you're Warren Buffet, no one cares about your vacation plans, which conferences you'll be attending, or which restaurants you've dined at recently. The more 'trivial' your posts appear, the more your clients may wonder why you're spending time posting on Linkedin or traveling around the country instead of managing your assets. 
3. Remember that your posts aren't likely to stand out. Your client's Linkedin page is likely to be filled with dozens of posts from members of her network, and most users don't 'scroll down' to read messages that aren't 'above the fold.' If your message is critical, use another client communicationmedium--email, direct mail, or even an old-fashioned phone call.

Using Linkedin for Targeted Client Communication

One key advantage of adding your clients to your Linkedin network is that you can keep track of changes in their careers and lifestyles. For example, if a client changes companies and updates their Linkedin profile these changes are usually broadcast to his or network (unless they choose not to). If you become of such a change, it could create an opportunity for you to send a message of congratulations to your client and inquire whether he or she might wish to discuss rolling over their 401(k) plan assets at some time.

Another benefit of Linkedin is that you can use it to send targeted email communications to specific client segments. For example, if you've written an article on retirement income planning, instead of 'broadcasting it' in a Linkedin post you can instead use Linkedin's email system to promote its availability to those clients (and prospects you've agreed to join your network) for whom it is relevant. 

However, if you are already using email to send these kinds of generalized messages to clients, you're better off using it than Linkedin. Seeing your name--or your firm's name--as the sender, rather than Linkedin's brand, reinforces that the message is coming from you, rather than originating from a third party site. Plus, you have greater control over the design and branding conventions used in your email messages if you send them directly. Linkedin's design options are limited.  

Creating a Linkedin 'Community' for Your Clients and Prospects 

Any Linkedin member can create a 'group' that other members can join. Most of these groups are related to specific industries, professions or cater to alumni and ex employees. However, many companies do create their own groups for their clients and prospects.

You could potentially do this as well and invite your clients and prospects to join. Then either you or they can post within that group, and members can be notified via email when these posts appear.

Keep in mind, however, that this strategy is unlikely to be particularly effective, because many of your clients will not wish strangers to know of their relationship with you. If your group only attracts a handful of members, those in the group are highly likely to leave it--which doesn't create a particularly good impression of you.

Posting to Linkedin Groups


Linkedin groups certainly provide an excellent way for you to network with your industry peers. There are hundreds of groups catering to investment professionals and employees of mutual funds, hedge funds, 401(k) plan providers, family officers, wealth management firms and centers of influence serving these firms.

However, you should absolutely never use these groups for prospecting purposes, as tempting as it is. For example, most advisors would love to build their prospecting pipeline by cold-contacting members of groups catering to CEOs and attorneys. Try this and you're likely to incur the wrath of these groups' moderators and members and you may have your own networking options curtailed.

No Substitute for Real Communication   


While Linkedin can be a useful tool, its convenience should never replace that of more personalized communication methods. Most clients would prefer a personalized mailed letter from you than an impersonal message sent through email. Likewise, an email message sent from you, with your 'real' email address, is more likely to be read than a message sent through the impersonal Linkedin interface. And, of course, no online method will ever be more effective than the one-on-one value of a phone call or a client meeting. Use Linkedin effectively, but not as a substitute for the client interactions that truly count.

How are you using Linkedin? Is it working for you or a complete waste of time? Share your experiences by commenting below.

Using Email Marketing Effectively

Q. Why aren't advisors opening the emails we're sending them?

Boy, do I get this question a lot.

For years investment companies have been seeing a dramatic drop in 'open' and 'link click' rates from the email messages they send to brokers and RIAs. And, of course, the first thing they do is blame their creative teams for not coming up with catchy subject lines or flashy designs.  And they offer hire me to advise them on how to improve the quality  of their messaging.  But guess what? The best subject lines and email layouts in the world don't mean anything if your offer fails to resonate with your intended audience.

My recent white paper, Getting the Message: Evaluating Email Effectiveness Among Financial Advisors (which you can download for free from my web site), offers insights into the email preferences and turn-offs among advisors. 

One of the biggest mistakes many marketing departments within investment companies commit is believing that their email messages are unique and that advisors are really interested in product and performance updates.  Well, they're not. According to the survey research:

• Most advisors receive more than fifty email marketing a messages a month from investment companies and service providers, A third receive more than 100, and several claim to receive as many as 30 a day.
• Large numbers of these messages are ignored or deleted. Only 11% open more than 50 messages per month, and 3% never open any email at all.
• Advisors are more likely to open and read messages that provide timely and useful market commentaries and practice management content, and aren't interested in “fun” or non-business-related content (like consumer discounts or March Madness contests).
• Advisors prefer messages that use short, concise copy and offer links to practice-specific content, and are far less interested in messages promoting products, fund performance updates and corporate information
• Most advisors would like to reduce the frequency of email 'touches.' Nearly twenty percent would prefer to receive only one email message per provider per month, while another twenty percent would like to receive one message a week, but only if that content is timely and relevant to their business. Only 4% want to receive more than one email message a week from each provider.

As this chart from the research shows, many advisors have strong opinions about the kinds of content they wish to receive--or never receive. Market commentaries, Regulatory updates, and client education and practice management resources are at the top of their email content "wish lists," while performance updates, unrequested product information and the typical company news and announcements.

 The 'message' from advisors are sending to investment companies should be loud and clear: Stop the endless onslaught of product and performance pitches. Send more advice that can help me gain new clients, strengthen relationships, and make my business more efficient. Stop with the "throw everything and see what sticks."

Only when you've retooled your email marketing strategy to align with what advisors want--rather than what your product managers want--should you start worrying about headlines.

But, while we're here, let me give you a few tips that may help boost your response rates.

1. Avoid generic subject lines at all costs. "Important Updates from Elm Funds" or "Bacon Growth Fund Performance Update" are nearly guaranteed to end up in the trash bin. 
2. Try to start subject lines with actionable responses. "Download an innovative, compliemtnary new tool for generating referrals" is more effective than "Introducing the Bacon Funds Prospect Generator." 
3. Try to avoid using words that might trigger email spam filters. Use "complimentary" instead of "free," "assets" instead of "money," "revenue" instead of "profits." For more words to avoid, check your own spam folder.
4. Avoid using blind CCs. Many spam filters automatically send these messages to the trash box. It also creates the impression that you're bulk mailing. If you can't send individual messages, use a email service that lets you updated an email list and 'personalizes' each message with the advisor's email address and name. 
5. Keep messages short and simple. Don't overload them graphics or heavy text. Instead, use the message to link to longer content on your site. This will help you get a better idea of what kinds of content your audience finds relevant.
6. Never attach files to unsolicited email messages. Many investment companies are tempted to attach PDFs or other files, but remember that this simply fills up the advisor's mailbox. Also, most attached files from unknown senders are automatically suspected of carrying viruses. Instead, include a link to the content in your message.  
7. Always add an 'unsubscribe' line at the end of each email. This is not only courtesy, but it's the law. If the advisor unsubscribes, make absolutely sure you remove him or her from your email list.

While these tips won't necessarily dramatically increase response rates, they may at least prevent your messages from being totally ignore or trashed. Remember the cardinal rule of all outbound communication: If your recipients dosn't like your first message, they'll never read your second.

Agree? Disagree? have other email marketing tips and stories? Share your experiences by commenting below.