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Thursday, August 7, 2008

Cold Calling -- The Worst Way to Prospect

Some financial advisors and insurance agents use prospecting methods that produce the wrong prospects. I define a wrong prospect as someone who is not really interested, not qualified or hard to deal with. In essence, someone who wastes your precious time and if they do become a client, they consume so much of your time that you wish they weren’t a client.

You generate these types of annuity prospects by using unfocused mass marketing models. For example, if you cold call a list of people over age 65 attempting to obtain annuity leads, you are generating the wrong prospects. You have no idea if these people are interested or qualified. So you waste a lot of time cold calling and then meeting people who are not qualified or interested. Wouldn’t it be smarter if you only met with the interested qualified annuity buyers?

If you have been cold calling, please face the truth--cold calling is a substitution of your labor for capital. In other words, you got into the financial services business undercapitalized (you came in with no money to invest) so instead, you trade your time for capital. This is purely insane. You cannot grow a business without capital. Did Microsoft? Did Intel? You must not devalue your time or you will settle into that rut and struggle your entire career, always cold calling. If you work for a large firm, they are happy to have you do this as they pay you commissions. Having you waste your time is okay with them.

The central focus in efficient prospecting is this: you offer something of value to masses so that the few people who are interested identify themselves. Then, you only talk to the interested and qualified prospects. There's not problem if you want to use the phone for prospecting, but get a $10/hour telemarketer to do it, not you! Then, when the telemarketer makes 100 calls and finally finds one interested person, you get on the phone and close the appointment or make the sale. If you want to be closing sales all day, get 5 telemarketers.

Here's another alternative. Rather than cold call, send a well written mailer (more on writing great direct mail in another article). Even if you get a 1% response to 1,000 mailed, that’s 10 interested annuity leads who took action. When you call them, you qualify them and eliminate half. You get five appointments. These are the same five appointments you would have gotten with the cold calling, but look how much easier this was. Instead of talking with 1,000 people, you talked to 10 people. Instead of meeting with 10 people, you met with five. You saved maybe 25 hours of your time and spent $500 on postage and mailing. (In other words, had you cold called, you valued your time at $20 an hour for the mailing cost you saved–is that all you’re worth?).

Or what if you ran an advertisement in the local senior magazine “Annuity Owner Mistakes” You then have a few annuity leads to call who are interested and motivated. You have saved your time and limited the annuity prospects you deal with to those who take initiative. These are the types of people you want as clients. You do not want people who must always be convinced, which is the type of prospect that is generated with unfocused, mass marketing.

Or what about inserting a flyer in the daily newspaper for your next annuity seminar “How to Reduce Retirement Income Taxes.” In our tests, 20,000 inserted flyers (for about $1,000) generates about 50 annuity prospects to an annuity seminar. You give a presentation to 50 motivated people at one time and then have individual appointments. Annuity seminars make super efficient and super effective use of your time (you are speaking to motivated annuity prospects).

If you’re tired of prospecting, feel burned out and feel that good prospects are scarce, shift your prospecting methods to have qualified prospects contact you and renew your career.