What can one expect from cold calling? $$
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[quote=Northfield]2 clients per month, assuming a 40% close ratio =
5 new prospect meetings per month. Assuming 20% of cold called prospects agree to a meeting, then 25 new prospects in the pipeline every month. Assuming 10% of folks you have a phone conversation with qualify themselves and agree to receive some info then you need to have 250 new phone conversations with prospects every month. And assuming you are able to have an intelligible conversation on 10% of your dials then you need to dial 2500 times per month or 125 per day. Of course, if your average client is $100k, this only yields you $2.4 million per year, so if you wanted $5 mill per year you would need to double this math. This math has remained one of the few constants in our ever-changing business. Try it, you'll see what I mean.[/quote] I think this person has posted this before, but one of the best posts ever... The dials/day seems light for someone just starting out with nothing to do, but overall seems very good. I also like the idea of 40 contacts/day(though under these numbers, your dials would need to be in the 400 dial range).Today is the last day of year three. It seems like a decade. I missed my goal but did a bit over $370k T12. I'm OK with it I guess. I've received well over $100k in bonus money / deferred comp. as well as $25k in cash for expenses. I was promoted to an Associate Vice President / Investment Officer (Big Fing Deal).
Every bit of business I have, not including Mom, is from cold calling. It's the only way you can do it IMHO other than door knocking which isn't my gig at all. I have some very HNW clients and want 20 with 5 million+ as my career goal. I'll be there in 5 years.
Moral of the story. GET ON THE PHONE AND DIAL DIAL DIAL!!!
Gaddock, do you still do any calling? Is calling easier at the end of year 3 than it was at the beginning? Great story and I really enjoy reading your posts!
Just a recap Gaddock... who are you calling? I remember reading "residential" but I would assume that all of the people with $5M+ are on the DNC... Did you also do business? Did you just dial all day?
Gaddock , I've been in this buisness for years , trading destroyed my career. Now , I need to build a customer base again . What do you pitch? stocks ? I do stocks and options , how much do you charge ? in and out.
thanks
+1 on what BondGuy said...
Congrats Gaddock... I'd love to swap war stories one day. I'm guessing you're still doing a good bit of transactional, which is good as there aren't many of us left... (which is really good...!)
Clemente, no I've been getting referrals these days. All my time is taken up running my book. After I make some changes I'll get back on the phone.
Chickenfeed, I was calling any number I could find anywhere. The best list I had was new people moving many times they have not put themselves on the DNC yet. I got lucky with one very HNW guy on a cold call and now get referrals of the same.
Stickem, OUCH! how did trading destroy your career? beyond the obvious of losing big. I've punched just under 5000 tickets year to date. I run an options strategy around core equities. It's been hugely successful. Half my book are in wrap accounts for 1.5% the other are transactional with a 25% discount.
Bondguy, what a freaking roller coaster ride, never mind the market but the whole AGE to WB to WFA. I unfortunately now understand when they say the culture is different. Sure have learned a lot. Thanks for the kind words
Jack, ditto, yes half is transactional. Some folks think they get better service, they are correct.
Congratulations. I've been trying to find an interesting (and recurring) strategy, and you inspired some thinking. I don't know if options are for me, but you created a great niche for yourself.
I'm currently hiring new advisors and trainees in my office and it has been inspiring and motivating to get back to training and explaining the business... Sometimes we take for granted this business (and our wives, kids, families, etc.) ...
One thing I did when I started making money was hire assistants (ie.: cold callers, interns) and looking back that is what pushed me through year 3,4, 5... faster than the others and later allowed me to go out on my own...
Anyway, Gaddock's story is evidence of what one who works hard can expect from our business... and depending on product, previous experience, and attitude in some cases better results can be had.
Anyone w/ a book will tell you 90% of your revenue comes from 10% of your clients... Further, 90% of the revenue in this business comes from guys like Gaddock and BondGuy.
This deserves a bump.
Hows the business been Gaddock? Did you reach your goals you spoke about in the thread for 2010?
Am I the only one who sees a flaw here? Gaddock says that cold calling worked for him and it will work for you too. That is, if you develop some programmable algorithm, hire someone to create a program for you, generate 5000 tickets, and bring in ridiculous referrals.
Great for Gaddock, but I wouldn’t call him a stereotypical “cold caller” who is starting on a level playing field. Look at his background – comparing his success to what a new broker could do based on cold calling is absurd. The same would be true for someone who is “cold calling” from a list of bank prospects. That isn’t cold calling at all.
When someone claims success at cold calling, or mandates that cold calling is the only way to go, take a look at their background. A lot of guys on here aren’t on the same playing field.
[quote=Strng2QtStrng]
Am I the only one who sees a flaw here? Gaddock says that cold calling worked for him and it will work for you too. That is, if you develop some programmable algorithm, hire someone to create a program for you, generate 5000 tickets, and bring in ridiculous referrals.
Great for Gaddock, but I wouldn’t call him a stereotypical “cold caller” who is starting on a level playing field. Look at his background – comparing his success to what a new broker could do based on cold calling is absurd. The same would be true for someone who is “cold calling” from a list of bank prospects. That isn’t cold calling at all.
When someone claims success at cold calling, or mandates that cold calling is the only way to go, take a look at their background. A lot of guys on here aren’t on the same playing field.
[/quote]
Your outlook is very flawed. Here is why. You could have the secret that corners the market on gold. You could have a bond inventory that no one else has. You could even have the boiler plate "hot stock" picks that your firm recommends. But they are all completely worthless unless you are in front of people asking them to buy. How do you think he was able to write 5000 tickets? Do you think people were calling him up and ASKING to buy his option strategies? No, he proactively looked for opportunities and made the most of them.
Bottomline, if you have been in this business for any length of time, you will find out that there is always a story behind the story when someone experiences "bigtime" success, but all I see here is a willingness to zealously outwork the competion until his prospecting strategy paid dividends...and that is what he did.
Oh, and I don't think anyone is saying that cold calling is the only way to go, but if you are a rookie, what in the hell are you going to do? The way I see it, outside of family money (we all know tons of these guys), there are only a handful of ways to gather assets. You have the option of cold prospecting (call or door knock), network, direct mail, seminars, and referrals.
Most rookies don't have the bankroll for direct mail or seminars so throw those out the window. And you simply can't get client referrals unless you have clients right? Networking takes awhile so you need to start that immediately in order to bear fruit down the road. What does that leave you with? Cold prospecting. If you have found a way that is better, please let us know, but in my experience (and that of many others) there is no magic bullet. There isn't some slick pitch that no one has ever heard of. There is however a thing called hardwork.
Doesn't sound like you have made any signifcant dials in your career and given your pessimistic view of cold calling, I would say you are defeated before you even start...but good luck!
The title of this thread is “what one can expect from cold calling”. All I’m saying is that I agree with you – there is no magic bullet. I just don’t think Gaddock’s path is typical. He clearly did more than just pick up the phone. Instead he:
Came into the industry with a rich background and ample experience Conceived of a market beating strategy Invested in the production of a program that would beat the market Got in front of prospects by cold calling Generated a effective referral stream
Instead of “what one can expect from cold calling”, maybe it would be better to say: What one can expect from: see above 1-5. This forum has largely presented cold calling as the magic bullet, but clearly Gaddock’s success resulted from much, much more than simply picking up the phone. It was more than just outworking the competition. While both working hard and picking up the phone may be necessary, Gaddock created a strategic plan based on his background and experience which gave him the edge.
I give up. No sense in trying to explain anything else, because I think you just don't get it.
Gaddock didn't start using his option thing til the end of the first year if I remember correctly.. And even if he did.. what does it matter.?
Clients don't know the difference, I would argue it was harder for him to explain his strategy then simply using a bond or SMA
Maybe I can help
WIthout picking up the phone and COLD calling, his strategy, background, and most important the referrals do not happen.