60-80 hours per week
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Stok, good stuff! Question: What product are you calling with? Could you post a sample call?
THX BGIf you stop to think about it, this industry cracks me up. We hire guys/girls in their 20's to be the prospecting arm of our industry. We hire the people who just graduated or are very early in their careers and tell them to bring in X amount of assets by Y amount of time. We tell them to get on the phone and dial X amount of phone numbers to achieve Y amount of results. We take the least knowledgeable, least experienced, least connected in the community, and least recognized faces and send them out to gather assets in the community. I'm I the only one who sees a problem here?
What about today's societial views, economic standing, or marketability makes a Branch Manager hire a 20 something with no contacts to cold call for $XX Million Dollars. I will probably get completely slammed for this, but how does anyone make it in 2008 by solely cold calling? With Caller I.D., magazine/insurance/vacuum cleaner tele-marketers on every other dial, telephone scams all over dateline I'm amazed anyone even took my calls when I tried cold calling. Maybe it stems from the fact that I work in a town with less than 1,000,000 and not a single advisor in our office has made it from cold calling since 82', but I don't see how it's possible any more. Maybe in the really big cities where you literally have 10,000,000+ people to call on and if you were on the phone from 7:00 a.m. to 8:00 p.m. you can make it, but there are better ways to make it in this business. I know this post will get slammed because I have read many post of people on the phone cold calling all day and making it. I am not degrading cold calling or saying it doesn't work at all, and I admire the guys like Judge and Bondguy's post about working hard and cold calling. Here in the MidWest in cities with less than 1,000,000 people, it's much more about who you know, who they can introduce you too, and your reputation than it is about how many dials you made to Joe Stranger on Hickory Street. I do realize the Mid West is completely different from the Coasts and the way we do business here is different, and what we do that works is different than what other people do that works. I just want the fellow rookies out there to know that there are other options that cold calling all day, and there are advisors out there who are very successful that have never made a cold call in their life. What is much more important than the method you use to contact people, is the number of people you are contacting and the quality of conversations you are having with them.Bull - Cold calling works, if you do enough of it, in my area. (NY Tri State). The key is, the definition of enough of it, is different than it was 10 years ago.
But the issue of cold calling is different than the issue that your post brings to my mind. Whatever the method of prospecting, you are dead on, in that the idea of hiring kids out of school, or even 2 years out of school, and expecting them to bring in lots of money within a year or two, is preposterous, and thats why there is such a high failure rate. The training programs at the wirehouses can be top notch, but you cant teach ugly Betty to be cinderella. Maybe not a great analogy, but we hire these kids, pay them 45-50k, and then wonder why they are not making it. We should be hiring people with 10 years busienss experience, and pay them $100k-125k base for 2 years, quality people with a rolodex, who know and understand what they are getting into, and are motivated. Hire quality, hire less of them and pay them more I had a conversation with my Regional about a year and a half ago, and expressed this opinion. I was shot down, told that he disagreed, and the answer is just throw enough SH** on the wall, and something will stick. REAL INTELLIGENT APPROACH. I should have known then, that management was not the way to go. The reality is BOM''s have a number to hit each year in how many trainees they hire. If they dont hit the number they lose part of their bonus. So if they are short, they just hire almost anyone with a pulse. What a system. Ridiculous.BB-
I tend to agree with you on both fronts. To a degree, Prato is right. COld calling can work. But done enough, ANYTHING can work. Where I live, there are only about 100K people in my COUNTY. So don’t feel bad about only having a million in your city. But these days (and I live on the coast in a weatlhy suburb), cold calling is very, very difficult. There are a couple reasons…first, in so many households, both people work, hence, I have to dial 100 times to get about 10 people to answer. Get 10 people to answer, and you might get 1 qualified prospect. SO I need to dial 1000 times to get 10 qualified prospects. There simply aren’t enough people NOT on the DNC for me to make those numbers work. Now, if you want to work every night calling at dinner when people are home, knock yourself out. You just have to dial enough times to get someone not pi$$ed off at you for calling at dinner/kids bedtime, etc. Second, with DNC, I would say that 80-85% of numbers in my area are on the list. This is factual, since you can just go to InfoUSA, run a list for a mailing, then do the same exact list, but for tele-marketing. You get about 80% fewer numbers on the tele-market list (due to DNC). I once did a search, got 10,000 names, then did the same thing scrubbed for DNC, and got only about 850 numbers. Now, I could expand my area, but my business model doesn’t work well for opening and servicing clients over the phone that I have never met. People don’t really want that anymore. They want relationships.
It is funny how firms hire the most inexperienced people to do these jobs. However, I guess you could look at it another way. If you consistently hired well-heeled, connected people, you would have to pay them a lot, and even then, there is no guarantee they will make it. AND, they have to work very hard for a few years to build their book. It’s not like you can hire a neurosurgeon, and assume he will make it because he is smart and connected. The person still has to be a salesman. So it’s probably easier to hire 10 young guys on the cheap that will work hard, and hope that 2-3 of them stick. At worst, you retain some assets of those failed brokers, and maybe they become a break-even. Think about it…7 failed brokers, 2 years, maybe 20-30mm in assets now in the system?? Not bad numbers. Probably cost the firm $500k-$1mm. Add in those 2 or 3 that make it, and you are now off to the races. It’s sort of like cold calling.
B24,
You make some good points on the cold calling. I would add that most of those NOT on the DNC LIST, are people who are not our clients anyway. However I would also add, that not only today, but 8 years ago, when I started in the biz as well, calling homes is not the ideal way to go. I've always called businesses. Yes the hit rate is pretty low during the day, after 9 and before 4-5, but the hits you do get are usually very well qualified. As far as who we hire, i have to believe if we hired connected, motivated people, and paid what we had to in order to attract those people, we would have a much higher success rate. JMHOIt seems that cold calling residences is a waste of time (hence Edward Jones’ door knocking).
Businesses seem to be the only way to go if you are going to cold call. As for who companies hire, these firms have been training people for a long time, I would hope that by now they would have figured out what type of candidate will be more profitable for them. Furthermore, I would think that well connected old people probably are paid quite well to stay put with their current companies. Not sure why they would want to move. Also, not sure how you become old and well connected unless someone gives you a chance along the way.Having moved from a different country, I was amazed that cold calling is still used here. (It is illegal to cold call for financial service products in some parts of the world.) What has been more suprising is that when interviewing for positions here, trying to convince hiring managers that there are other methods of reaching potential clients with signifcantly higher conversion rates, I have been told that cold calling is the most effective method.
It has also been interesting that there seems to be a lack of formalized mentoring/trainee positions available. The entry level positions require you to come with a list of names or be prepared to invest in a method of client contact with a conversion rate of 1% if you are lucky.
In my last position, new advisors were given about 3 months of training before we let them anywhere near a client. Then they had to work as an assitant for about another year. During this time, they were on a salary and had no production requirements. By the end of the year, they had a good technical knowledge base and were comfortable dealing with clients in person and on the phone. They had also spent about a year observing good producers at work. After about 4 years about 90% were still in the industry. Considering the situation here, how can you expect anything other than a high failure rate for new advisors.Stok,
Are there any particular business types you target? Where do you get the numbers from primarily? Thanks,[quote=newusfa]
Having moved from a different country, I was amazed that cold calling is still used here. (It is illegal to cold call for financial service products in some parts of the world.) What has been more suprising is that when interviewing for positions here, trying to convince hiring managers that there are other methods of reaching potential clients with signifcantly higher conversion rates, I have been told that cold calling is the most effective method.
It has also been interesting that there seems to be a lack of formalized mentoring/trainee positions available. The entry level positions require you to come with a list of names or be prepared to invest in a method of client contact with a conversion rate of 1% if you are lucky.
[/quote] New, you have our attention. Tell us what other methods we should be using and give us a ball park number on the expected conversion rate.Reading some of the posts on this board, it is obvious that many here are already very sucessful. So Im not arrogant enough to say what "other methods" people should use. So please dont take this as me telling you what to do, I just know what worked for me and a few of my peers.
I started with no assets, never approached family or friends for business and never used my "natural market" I built a good sized book of business with a strong revenue stream in about 3 years. Book size was about $80mil. I had all clients refered to me by attorneys and accountants. From the clients sent to my by attorneys or accountants I converted 75% tobecome my clients. About 15% I turned away because I didnt feel I could put them in a better position. The other 10% didnt like me (I guess) The trick is to get other professionals to refer to you. I took a very specific area that I was passionate about and new would add real value to clients. (it was highly technical retirement planning strategy that saved clients signifcant amounts of tax) I put a presentation together for CPAs and had it approved for CPE points for the CPAs and presented it at a conference. From that I managed to win the professional respect of the accountants and they were happy to refer me business when the opportunity came up. Having said that there was nothing about this strategy I didnt know. I knew the legislation backwards and how to apply. Then when the clients came in, I would look at everything they had, and would pick up other assets they had elsewhere and re-write insurance where appropriate. I made sure I always kept the accountant in the loop. I also made it clear that I was happy to act as a technical resource for the firm. I have seen other advisors use the same strategy to build referal sources with insurance or estate planning strategies. I think the key was, we were selling a strategy not a product, which is easier for accountants and attorneys to stomach. If it is a product push some accountants treat you like a used car salesman. When its about a technical strategy where you can quantify and promise the benefit. ie a 50% reduction in tax rather than a potential 10% yield with stock of the week, it buys you some credibility. I dont think it is rocket science, but it worked for me, and I am sure I did better than if I was cold calling.Because of my beliefs, I only work Tuesday -Thursday. Works out great for me. I just have plumbers and vaccume salesmen send me clients. Some times I get good clients from Max, the door greeter down at Wal-Mart.
I give out business cards to the car hops at Sonic before I ride off on my moped.
This works great for me.
[quote=newusfa]
I took a very specific area that I was passionate about and new would add real value to clients. (it was highly technical retirement planning strategy that saved clients signifcant amounts of tax)[/quote] Did you discuss with them cross tested plans, NQDC plans, 412i plans, defined beneift plans, cash balance plans? Any more clues you can give? I was actually planning on talking to some CPAs about tax strategies for these plans.The reason I wasnt specific was that I have only recently moved to the US, and I did this in a different country. The retirement plans here are totally different. But I would assume you could use a similar approach to what I did to get the CPAs on side.
If you can develop an educational seminar and have the seminar approved for CPE points you might find CPAs will be more inclined to give you the time to listen. What you should always remeber with a CPA is that all they can sell is there time. If you are going to use some of it, and not be paying for it, you should try to give them a benefit other than the pleasure of your company. Another option may be to write an article for the CPA journal. It isnt as good as getting in front of them and discussing it, but will help to establish you as an "expert" in the field. Hope this helps.New, good stuff! networking CPAs or other professionals is always a good way to build biz. Unfortunately for most, easier said than done.
Keep us informed. Let us know how your business template works in this country. Good Luck and welcome to the U.S.A.!<span =“post”>How long do you let the phone ring when you call?
For residential?
I have been letting it ring for 30-40 seconds, but I am thinking that is toooo long... Thanks!
Businesses should pick up their phone within one or two rings. More than that spells one man shop. Homes - four rings. This is my rule. More than four rings and I'm interupting something and that's a bad way to start a conversation.<SPAN =“post”>How long do you let the phone ring when you call?
- For businesses/business direct dials?
- For residential?
I have been letting it ring for 30-40 seconds, but I am thinking that is toooo long… Thanks!
Nothing. Absolutely nothing. I have several very profitable sole-props as clients, all of which have been very profitable for me. Most reps don't call 'em because, well, most reps are snobs. Granted, you have to have a strong insurance background because most are investing in their own businesses. Benefits that employees take for granted (life, DI, health, etc.) all have to be purchased on their own. Get a rep who knows insurance, split the case, and prospect away!What’s wrong with a one man shop? Looking for info/perspective, not being a $mart A$$.
Thanks for the tip BondGuy. Much appreciated!<span id=“userPro100059” =“showDropDown’userPro100059’, ‘proMenu100059’, 160, 0;” =“msgSidePro” title=“View Drop Down”>