Alternatives to Cold Calling

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Sep 19, 2005 8:32 pm

I just joined a small regional firm and will have my Series 7 + other licenses soon.


I read these forums and see so many talking about "cold calling" and "cold walking."  Does this really work these days? You're trying to tell me that you can just pick up a phone and dial someone you've never known and expect him/her to actually want to listen to you? 


I've been in sales-related work for years. Just recently moved to where I am though and have few connections (friends, family, etc) that I could work with. My plan so far is to network and do more networking while I'm in this transition process. 


In other businesses I've had success with direct mail. I don't mean flyers- I mean sending out networking letters, lots of them, to prospective clients. I plan to offer a tremendous amount of "free consulting", and the firm I work with handles insurance and other financial services - I will not be just selling securities. From what I've been told insurance/tax planning is a great way to bring in contacts when starting out. 


Another plan includes building a referral network, primarily lawyers, CPAs, real estate agents.....who I can exchange referrals with, and possibly develop as clients themselves at some point. 


I wanted to know what everyone else here would think of all this.  Positive or negative feedback is welcome. 

Sep 19, 2005 9:03 pm

Whatever it takes to land clients. You have to talk to a helluva lot of people starting out, and the most efficient way of doing that is over the phone. Call with a concept, a solution to a problem, and sell the appointment.Don't sell product.It is a numbers game. Commit to 20 contacts per day. It will take you 2 hours max, and I average 2 appointments per day with new prospects.The ones who say it doesn't work usually haven't done it long enough to get good at it. I take a conversationalist approach and it becomes fun. The hardest call to make each day is the first, then you're on a roll. Referrals from cpa's, etc- I've found I send them alot a business with usually nothing in return. Most already have relationships with advisor's.Just be aware of that going in. In the time it takes you to mail out 100 marketing pieces, you could've set 4 appointments on the phone.Eliminate the hurdles- Call on business owners and corporate executives at work- No do not call worries. Forget cold walking- you can save your shoe leather and make 3times the contacts over the phone.


Just my 2 cents, that's about what it's worth.


Stok

Sep 19, 2005 9:29 pm

I agree with stokwiz.  Cold calling still works.  Yes you may call from 8:30 am until 8 pm and get only two appointments.  But, if you can get two appointments a day and open an account from every four or five appointments, you will be doing well down the road.  (That's two or three accounts a week)  Those who say cold calling doesn't work, do not work hard or smart enough. 


After that, you will open up some accounts from your previous meetings and also get referrals.   DO NOT DO MASS MAILING!  YOU MAIL, YOU FAIL!


Networking does work, but not as effectively as calling.  When one networks, you must have been in the business for years.  I have been in the business going on ten years and I do not network.  I join groups, clubs, or organizations that I truly have a passion for.  I do many things in those groups and people will start to ask me about investing or will schedule an appointment with me to talk.  I do not ask them for an appointment unless they are driving me nuts and asking me financial questions.  I politely say, "I don't like talking about investments here so can you call me at my office and we will schedule an appointment."  Many people will want free advice.


Just my 3 cents, that's about what it's worth.

Sep 20, 2005 12:31 am

Networking works great... join a Rotary Club or something.  Also attend a lot of Chamber of Commerce Events.


Cold Walking works well if you are prospecting businesses for their 401(k).


Seminars work well, if you do it right.


Sep 20, 2005 1:30 am

Join anything that you can think of. If you like to sail and fish join the yatch club.. If you're religious join the Knights of Columbus or a church. If you like or dont like to speak in front of people join Toastmasters. If you like sports be an assistant coach (you dont want to get hurt . That would effect you walking around town. I also think it helps if you have a good reputation or no reputation at all. Help your friends and family do their IRA's and little things. Then they will hopefully help you..

Bottom line stay active like its your last minute on this earth.

If you stay focused and have a goal (show me the money) you will do well.


I do believe that a previously established network and strong communication skills help.

Sep 20, 2005 10:42 am

Smile and dial baby. My goal is to make 15 solid contacts a day from Monday- Thursday. By solid contacts, I mean people who I qualify and actually speak with. Not the " hello, I'm with...- Sorry, not interested" type. Even if the person eventually says they arent willing to meet, if they slip up and tell me they are actively working with Smith Barney, for example, I know they are probably qualified. Thats all it takes. From there, I tailor my follow up calls to competitive differences between us and SB. Then the DRIP camapgin begins- sending research reports, economic commentary, strategic notes, seminar invitations, etc, etc. It doesnt matter, my goal is to have something in their hands every month that reminds them of our services. After months ( hell, years) of systematically calling, you are building up your prospect base, constantly opening accounts, upgrading/downgrading prospects, etc. At some point, instead of cold calling fresh, you are spending more of your time following up with already qualified prospects. From there its just plucking them off one by one, gathering referrals, etc... Granted, this approach may sound simplistic, but it has been proven to work..

Sep 20, 2005 2:46 pm
stokwiz:

Whatever it takes to land clients. You have to talk to a helluva lot of people starting out, and the most efficient way of doing that is over the phone. Call with a concept, a solution to a problem, and sell the appointment.Don't sell product.It is a numbers game. Commit to 20 contacts per day. It will take you 2 hours max, and I average 2 appointments per day with new prospects.The ones who say it doesn't work usually haven't done it long enough to get good at it. I take a conversationalist approach and it becomes fun. The hardest call to make each day is the first, then you're on a roll. Referrals from cpa's, etc- I've found I send them alot a business with usually nothing in return. Most already have relationships with advisor's.Just be aware of that going in. In the time it takes you to mail out 100 marketing pieces, you could've set 4 appointments on the phone.Eliminate the hurdles- Call on business owners and corporate executives at work- No do not call worries. Forget cold walking- you can save your shoe leather and make 3times the contacts over the phone.


Just my 2 cents, that's about what it's worth.


Stok




Stok, great approach! Could you post a sample of your call?


Thanks


TC

Sep 26, 2005 2:46 am

Great advice.  Thanks to everyone who answered here. 


I've been looking to try the "cold call" approach.  I know for a fact that if you act like you're selling something you get treated like you're selling something.  I am trying to be a financial advisor here offering free consulting, NOT trying to be a telemarketer. 


Are there any approaches someone could recommend that help "warm up" cold calls and make them more effective?  Maybe post a sample call? 


Sep 26, 2005 12:56 pm

Hey James...how's the series 7 coming?

Sep 26, 2005 2:32 pm

"Mr./Ms. Doe, I am an analyst at XYZ Financial.  I am engaged in a
number of research projects here and I wonder if I could trouble you
for a few minutes of your time to complete a survey for one of our
studies?



I assure you that your answers will be held in the strictest of confidence."



If you don't want it to sound like a sales call then don't make it a
sales call.  Make it an intelligence gathering call.  On the
first call, do nothing more than gather data and then thank them for
participating in your study.  What do you need to know about your
customer before you can begin to render them investment advice? 
Here is an excellent time and place to gather some of that information



Call them again in 3 or 4 weeks.



"Mr./Ms. Doe, recently you participated in one of our surveys for a
previous research project.  Would you consider participating
again?"



Spread out your information gathering needs over two or three
calls.  In addition to prospecting with this approach, you can
also screen out candidates that won't fit into your practice.  By
the third call, you should start having some investment ideas that you
can pitch to your survey participants.


Sep 26, 2005 2:51 pm
executivejock:

Join anything that you can think of. If you like to sail and fish join the yatch club.. If you're religious join the Knights of Columbus or a church. If you like or dont like to speak in front of people join Toastmasters. If you like sports be an assistant coach (you dont want to get hurt . That would effect you walking around town. I also think it helps if you have a good reputation or no reputation at all. Help your friends and family do their IRA's and little things. Then they will hopefully help you..

Bottom line stay active like its your last minute on this earth.

If you stay focused and have a goal (show me the money) you will do well.


I do believe that a previously established network and strong communication skills help.




Exec I've been busy so haven't been on in a while....and I return to see that you're still dispensing advice without the benefit of any of your own experience.



Have you at least gotten licensed yet?

Sep 26, 2005 11:32 pm

sarasotabound:

"Mr./Ms. Doe, I am an analyst at XYZ Financial.  I am engaged in a number of research projects here and I wonder if I could trouble you for a few minutes of your time to complete a survey for one of our studies?

I assure you that your answers will be held in the strictest of confidence."

If you don't want it to sound like a sales call then don't make it a sales call.  Make it an intelligence gathering call.  On the first call, do nothing more than gather data and then thank them for participating in your study.  What do you need to know about your customer before you can begin to render them investment advice?  Here is an excellent time and place to gather some of that information

Call them again in 3 or 4 weeks.

"Mr./Ms. Doe, recently you participated in one of our surveys for a previous research project.  Would you consider participating again?"

Spread out your information gathering needs over two or three calls.  In addition to prospecting with this approach, you can also screen out candidates that won't fit into your practice.  By the third call, you should start having some investment ideas that you can pitch to your survey participants.


Does anyone else find this approach to be dishonest, car-salesman-like, and sleazy?  I think you're gonna have a hard time getting these people as clients after you misled them about doing research.


Sep 27, 2005 4:57 am

Then share the results of the research with the prospects you identify
as being the most desireable.  Drop them a note afterwards.



"Mr./Ms. Doe, You may recall that you recently participated in a
research project that was performed here at XYZ Financial.  In
that particular project, we were interested in determining investor
preparation for retirement.



In our survey, you may recall, participants were asked how large of a
lump sum they felt they would have to have for a comfortable
retirement, how many years they felt that lump sum would have to last,
and what kind of annual expenditures they expected to have
post-retirement."



Because so few people ever sit down and do an A=f(P,i,t), the results
of the survey are almost certain to have a rate of return requirement
that is unnaturally high or low.



"The survey concluded with the following responses:



Number of survey participants:  N

Average lump sum:  $x

Average number of years:  y

Average annual expenditures:  $z



Interestingly, the required rate of return to achieve these objectives was i%.



Thank you again for participating in our research project."



People are always interested in what other people are thinking. 
They become even more interested when they see a survey where mass
expectations are extremely unrealistic.  Imagine doing this survey
with 300 people and finding that the annual rate of return required to
achieve the objectives of the participants was some ridiculous number
like, say, 25%.



There is nothing dishonest about executing a project like this. 
If anything, it might show your prospects that you're a little bit more
than a mere car-salesman peddling investment vehicles.


Sep 27, 2005 12:39 pm

I've used a similar approach when I was primarily a stock jockey, though I would call the owners or presidents of distribution companies- ie: call the local carpet supercenter and tell the owner you are researching Shaw Industries (carpet manufacturer)for inclusion into clients portfolios, and wanted to get his take on the product, then ask if he'd like a research report on Shaw, then you might have a new client. As far as this "survey" stuff goes, if someone is naive enough to believe that, they probably don't have any $$$.Ask someone to buy a solution from you on calls, then you might have 5 new clients by the time you otherwise would've made your 2nd 'research" call.



Stok

Sep 27, 2005 1:58 pm

Diversity is a great thing JOE. The fact that I am doing well out side the financial industry. Yes, I want to be a financial advisor, but I have a plan that takes a bit of time.


Hopefully there are others out side of finance who also can provide general insight into successful concepts and ideas.


In the end it does not matter what I do, but hopefully every so often I can state something that helps someone on this thread.

Sep 27, 2005 7:36 pm

What script are you using offering a solution?  I've considering writing a script to offer to show customers how their life insurance fits into their retirement plan.


What are your ideas?


Right now, I use two scripts.  1) I just ask if they are investors looking for new ideas.  2) I ask if they would like to know the yields on new muni bonds.


I have stayed away from product scripts, for now.  But I am trying to get people to act quickly and may move to a product script pushing a closed-end with a high yield.


Thoughts?

Sep 27, 2005 8:24 pm

My approach to cold calling is to offer a second opinion on what they may be currently doing. I focus on niche marketing to university professors/staff in regards to retirement planning. I call them "in regards to" their 403B program, give them a spiel about " how we specialize in their program", ask what types of strategies they have taken, and then ask if theyd like to learn more about our services and how we can better be able to help them. Its very general, it gets them talking, and its less pushy than flying in with muni bond yields or slinging the latest closed end fund. Just my experience and where I feel comfortable. But I share an office with a guy that calls small businesses and pitches VRDO's as an alternative to money market accounts, and he is killing it right now.  It's a crapshoot.

Sep 27, 2005 8:46 pm

Sarasotabound- So you are going to do a survey when you are asking in effect only three questions of the potential interviewee? And you think that is intellectually honest? The problem is not drumming up clients but actually deciding which ones do I really want to work with...

Sep 27, 2005 9:52 pm

Sarasotabound - You're not working for the research division.  You're here to make money for people.  Your survey's don't help your clients retire or put food on your table.


Try this...."I'm calling to follow up on an invitation that I sent you to my upcoming workshop where I will be explaining my team's planning approach to helping individuals reach their goals. This is a process, not a product."


You can talk to 300 people about NOTHING or you can talk to 300 people about ways to improve their situtation (and yours).  It's your call.

Sep 27, 2005 10:59 pm
noggin:

Sarasotabound- So you are going to do a survey when you
are asking in effect only three questions of the potential interviewee?
And you think that is intellectually honest? The problem is not
drumming up clients but actually deciding which ones do I really want
to work with...





There are as many ways to approach your surveying as there are
prospects.  I never said you had to limit yourself to three
questions.  The retirement-oriented questionaire was just the
first thing that came to mind and you could surely expand upon it.



This type of an approach is very flexible and a creative advisor could
devise a number of approaches to tease important data out of telephone
contacts, whether or not they went on to become clients.  My point
is that there is no reason for you to see your telephone activities as
being a one-way street.



What is the industry success rate for cold calling?  1 to
2%?  There might be something to be gained from hearing what the
98 to 99% of people who don't respond to cold calling have to say about
our investment environment.  (BTW, if you very carefully comply
with a surveying-only approach, you avoid DNC prohibitions.)



This thread began with a question about alternatives to cold
calling.  If you're married to cold calling, then by all means,
have at it.  It works and I'm not saying that it doesn't. 
For people who are adverse to standard cold calling tactics, there are
alternatives, and not only are they not intellectually dishonest, they
can provide some very useful feedback to investment professionals if
constructed properly.