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Million Dollar Producer part 2

Thursday, September 18th, 2008

Sales professionals perform only professional activities and no clerical or administrative activities. In the financial advising business, there are three professional activities:

a) Communicate with prospects about having them become clients;

i) You should not be doing the work of prospecting.You are to get involved with
a prospect only when a prospect has indicated interest and the financial
resources to work with you. Big producers do not waste time like most advisors
do– identifying prospects from the sea of suspects. They have an
assistant or a system to do that. More on this later in the chapter on
marketing.

b) Communicate with clients to retain them, or about doing additional business; studies show that the larger producers have more contacts a year with clients while smaller producers have fewer contacts

c) Design procedures for others to follow. You’re the business owner, so it will always be your job to tell others what to do and lay out their work for them.

Think through these above3 three activities carefully and you will see that everything else you do during the day is unimportant and can be delegated. If you see that, you’re on your way to being a million dollar producer.

If you have been in McDonald’s recently, you may have noticed that they are the employer of last resort. They seem to hire the people that no other employer wants—people who cannot think and cannot listen. I order a Big Mac with no cheese and two seconds later the cashier asks, “do you want cheese with that?” Brain Dead. Yet, no matter where you go in the world, the McDonald’s product is amazingly consistent. That’s because McDonald’s has systematized and documented everything. There is an entire manual on how to make fries. The genius behind McDonald’s is that the company has taken something as simple as making fries and removed every ambiguity.

Here is what you and I see to making fries:
Open the bag
Dump the fries into the bin
Put it in oil for 2 minutes
Dump it out
Sprinkle with salt

But these instructions are totally inadequate. Look how many questions are unanswered:

Where do I get the bag of fries?
Do I tear it open or use a scissors?
Do I dump the entire bag into the bin at one time or just part?
How do I know when it’s been 2 minutes—I don’t own a watch
Does the oil ever need to be changed?
How will I know?Etc, etc.

If you want to be a million dollar producer and have a business that runs on auto-pilot you will need to document every little process in your office so that someone other than you can do it. You need to think about every little question or exception that can arise and document the handling of that issue just like in the McDonald’s example above.

This has tremendous benefits:
1. It is the first step to becoming a million dollar producer without needing to work more than six hours a day
2. When an assistant quits, you’re business does not come to a halt as everything for the new person is documented
3. You have a way to make continual incremental improvements to your business by knowing the current procedure to compare to a potential new procedure

Before we proceed, let’s take a look at your local doctor’s office so you can see these three activities in action. When you call your doctor’s office, does the doctor answer the phone? No, he has a receptionist (in the financial services business, we call this person a service assistant).
When you arrive for the appointment, does your doctor take your temperature and blood pressure? No, he has a nurse do that (in the financial services, we call this person as ales assistant).

The doctor sees you ONLY when it’s time to generate revenue. He gets involved in none of the non-revenue-generating activities of his practice (as you do in yours). As a result, he earns a lot more than you do. He is a professional, he is a million dollar producer because he pays someone else to do the non-professional activities.

And do you see the doctor’s staff constantly asking him questions or do they seem to know exactly what to do? They each have their procedures and they do their business efficiently thereby allowing the doctor to generate income

Why would any rational person (you?) not hire some one for $20 per hour when your time is worth $200 an hour?The next time you are about to make some crack about the financial knowledge of physicians, think twice, since it seems they know a lot more than you do about making money, hiring help, systematizing their business and being a million dollar producer.

This post contributed by Javelin Marketing

Financial Advisor Marketing
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Sales success through zigzagging and stumbling

Tuesday, September 16th, 2008

Few people in the financial services industry ever become seven-digit earners but there are thousands that attain this sales success, which means it is possible for all. In fact, the financial services industry offers more opportunity for large earnings than possibly any other industry. So why do so few get there?

It’s the same reason that there are very few Albert Einsteins or Thomas Edisons. The folklore is that Edison made 10,000 attempts to invent the light bulb. Most financial advisors will not attempt something even a second time if they don’t get instant sales success. And therein lays the difference between those that earn more than the rest can imagine and the rest.

Really large producers know a secret about life. If you keep knocking at the door, it eventually opens. It’s a matter of how long one is willing to stand in front of “no success” that determines if you achieve sales success. But in a culture of “instant gratification,” it’s hard to stay with something that doesn’t work. And so, most people in financial services move from one idea to the next, one product to the next, one marketing system to the next, always in search of the Holy Grail but never finding it, never realizing that the big producers create their own grail through sheer commitment to stay the course.

Big producers simply have a commitment to an idea (usually not how much they earn), but of making something work, or of proving a point or of doing something better than anyone else. They continue to experiment, stumbling along in a zigzag fashion toward the target, making changes here and there to their approach, allowing their problem to continuously simmer in their thoughts. And by having the tenacity to hold the problem, the solution often comes coincidentally, like Newton being hit on the head by a falling apple and realizing the structure and formula describing gravity and mass.

How does this apply to you on Monday morning and your sales success? If that seminar you did was not successful, don’t give up and try something else. If you’ve been soliciting CPAs for 3 months with no referrals, don’t give up and try something else. If you’ve been running an ad that was not instantly successful, don’t give up and try something else. Stay with your problem and find the solution. Be willing to stand in the place called “I don’t know what I’m doing” because then you take steps to learn and find out what you don’t know (or find the person that has already solved your dilemma). In the Internet age, all knowledge is at your fingertips so you only need seek out the information or the person who can help you.

I get solicited every month to help people with their ideas (which are usually not in my area of expertise) and I wonder how many of these we will ever see:

• A nationwide financial planning firm for women

•A training to teach financial advisors to manage family business succession from one generation to another and building a network of such advisors

• A training to teach advisors to integrate the investment plan with the estate plan

• A plan for financial advisors to enroll their clients in a medical identification program, so that if injured anywhere in the world, the medical facility can instantly access the client’s medical background

• A training program sold through financial advisors that helps people be better investors

I meet many advisors with the same story of broken dreams, “I started in the business selling product X. But then the market went down so I shifted to Y. And then you know what happened to interest rates, so I shifted to Z. And then….

The sad fact of this recount is that had the advisor stayed with product X and not abandoned the original plan so quickly, that advisor may now be the best known provider of X in their town with wild sales success to their credit. Everyone else would have exited that business leaving the last man standing to win the spoils.

On Monday morning, take list the ideas and approaches you have abandoned in the last year or are ready to abandon and stop.

–Make three phone calls to people who you think can help you or refer you to others that can (you will likely find an expert through a zigzag network of referrals from one person to another).

–Do several Internet searches using various key phrases related to your problem (which will probably take you on a zigzag course to insight). It’s likely by the end of the week, you will have made a leap in solving your current dilemma or abandoned opportunities by zigzagging and stumbling along.

“Genius is 1% inspiration and 99% perspiration.”Thomas Edison

Post provided by Javelin Marketing

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Self Reliance Will Not make You Rich

Saturday, September 13th, 2008

As self-reliant Americans, it’s almost un-American to admit we do better with help from another. But we bear the dismal results of this resistance with under-performance—less income than we should have, less enjoyment from our work, less time with our families. Those that get help enjoy greater results in all areas.

Every successful financial advisor I know uses or has used a coach. I also know that every professional athlete, every Olympian and every well-known actor (at some point in their career) has or has had a coach. Americans (financial advisors included) are not terribly competent at getting what they want when we go it alone. Here’s plenty of evidence:

• The millions of people on a continuous diet to get thin

• The people who buy one exercise machine after another to get in shape

• The planners who keep attending professional meetings thinking this will increase their revenues

• The single people who complain about how hard it is to meet a “nice gal/guy”

• The married people who complain about their spouse

The list goes on of what people want but don’t have. Is your business (life) the business (life) you want? The way to get what you want is to get help from an expert. Get a coach. Life is a flow. Right now, you may be flowing in one direction. You keep giving to your clients. You keep emptying the vessel. But how does your vessel get filled? If you’re a coach to your clients, you also need a coach. You need to complete the cycle and refill your vessel. A coach helps you get what you want. For example, do you ever have the problem of converting what you know that you should do into action? You know how to eat better, exercise, ask for referrals, study for a credential, schedule a seminar, take a sales class, etc. But do you do it?

You seem stuck at the same level of accomplishment—good at what you do, but you need to change your behavior to move forward—always finding an excuse to not act on your dreams (not enough time, energy, information, etc.). Top producers use a coach to help break that bottleneck to success. When you get off track with your goals, the coach brings you back. When you start seeing barriers, the coach helps you see the way through. When you’re thinking gets distorted, your coach shows you the logic. If you want to continue down the road alone, you lose the benefits of someone’s insight that can see what you do from the outside. It’s a view you can never get from the inside just as a fish cannot see the water on which they swim.

Reports from advisors about their coaching experience: “Coaching has enabled me to become focused on my business as a business once again. My organization has come together with common goals and visions. The weekly coaching calls keep me on track and have produced a more steady business flow and income stream. My business is up 75% since retaining my coach.” “Coaching has helped me clarify and prioritize my goals and given me a sounding-board to refine ideas and concepts. The results have been higher production and more time for my family!!” “ Gives me clarity and focus in what is one fast changing career, and that has enabled me to grow my business faster than before I met the coach. Thanks coach!” “Everyone talks about goals, but it was my coach that showed me how to legitimately list my goals, and more importantly, follow them on a day by day basis. By speaking with my coach on a weekly basis, I was held accountable for the goals I had committed to during the previous conversation.”

You can remain a self reliant American and go it alone or get help and get rich.

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Business Development-How to Get the Types of Clients You Want

Thursday, September 11th, 2008

The title of this article is bad. It emphasizes what you want, but if you want to win specific new clients and win at business development, the focus needs to be on them. While this sounds simple enough, most professionals conduct their marketing without an understanding of their potential clients. We assume we know what they want but the assumption is often incorrect. So the first step is to know exactly what your potential clients, your prospects, value.

Take this simple example. What do business owners want? We assume they desire more profits, better cash flow, higher value for their business, and better quality employees. But top on their list may be to spend more time with their families. If you assume rather than KNOW what your target market desires, your business development efforts will flounder. Once you know what they really want, your marketing can be so much more effective because you can market a solution for what they really desire, not what you believe they desire.

To make your business development laser sharp, you have two ways to learn what prospects really want. You can contact ten potential clients and have a one-on-one interview with each. So that they will be open to you, decide to write an article for your State society or local chapter so that when you call your interview candidate, you frame the meeting correctly: “Stan, My name is Bob Richards. I am a financial planner here in town and I am writing an article for the local Financial Planning Association about the professional and personal challenges faced by CFOs of manufacturing firms. For my article, could I interview you and get your ideas over lunch on Friday?” This approach opens the prospect to truthful answers rather than leaves them guarded that their responses will come back to them in a business pitch.

You must conduct ten of these interviews to get a solid profile of your prospects as the foundation for your business development plan. Alternatively, you can conduct a focus group. To do this correctly, you want to read books on conducting focus groups or possibly hire a local market researcher with experience (elance.com and guru.com are excellent sources of this type of specialized help for projects).

Now you know what your prospects desire. There are several ways to reach them so that you have the opportunity to explain how you can assist them to get what they want. The following recommendations may seem unconventional and that’s why they have value. Many people with financial planning backgrounds market passively and don’t have the business development results desired (i.e. they rely on referrals). If you use the same passive and reactive tactics as everyone else, you won’t stand out as special and you won’t win business.

The Best Business Development-WIN Client Referrals—don’t wait for them

Identify current clients that are either part of the group you desire as clients or can introduce you. Once you do, call them and ask them for help. “Tom, I am always working to improve the quality of my services and determine what people really want. Can I ask you what you like working about me best? (Write down everything your client says). I appreciate those comments. Would you be willing to join me for lunch and help me with my business development process?”

At lunch, you explain to Tom, your client, that you believe he can help you with your business development program. You show him the following letter that you typed up that repeats the comments he made to you on the phone just a few days earlier when he told you what he liked best about working with you. Here’s a sample letter:

Dear ,
Bob Richards has been my financial advisor for many months. As busy as he is, Bob returns my calls the same day I phone him. Additionally, Bob is the only advisor I have ever had to walk me through my investment statements, insurance policies and tax returns so that I really understand what’s going on. As a result, I have felt more comfortable about my financial situation with Bob than at any other time. He also keeps in touch with me every couple months so I know he is always looking out for my interests. I highly recommend you call Larry at 800-xxx-xxxx if you want a top quality financial advisor or please call me and I can answer any questions.

You ask, “Tom—is this accurate? Would you be okay signing these letters as a way of introducing me to other CFOs, business associates and friends and helping me with my business development?” You then proceed to get a list of appropriate people to mail and use Tom’s letter as the first part of a drip marketing campaign to this select list.

Professional Referrals—what can you do for them?

Other professionals may send you business just because you’re a nice and competent person, but it works better if you seek the referrals proactively. Here’s the fundamental element of success if you want referrals from other professionals: what can you do for them? Even if you are new in the business, you could open the phone book, call another professional and say, “I am a financial advisor here in town and my clients often have need for (legal work, business brokerage services, business financing, etc). I may be able to refer some of these people to you but I wanted to learn about your business and determine if my clients would be suitable for you. Can I take you to lunch on Friday?”

Here’s the point—think about what you can provide another professional if you want them to send you business. And once they see you can be of value to them (because you send them business), tell them the types of people you seek to meet and this will give a big boost your your business development efforts.

Seminars

Seminars are a super powerful business development tool and you control the results. You can be a total stranger in town and if you send an invitation for a compelling presentation to your target market (lists are easily purchased—see the SRDS Direct Mail List Source at the main library), you can have 25 to 100 of the right people in a room to listen to your wisdom. While the structure of successful seminars could take up a book you can obtain a number of articles at http://www.financial-seminar.net/.

Telemarketing

Many professionals don’t use telemarketing but it is inexpensive and effective. Of course, you won’t be doing the calling because you will hire someone to do this for you, paid largely on a success basis. You can have people telemarket to:

1) Fill seminars
2) Identify qualified prospects with a survey

Here’s an example. You could have a telemarketer call and do research. Assume that your target market is people with $500,000 or more in an IRA because your specialty is IRA distribution planning. Your telemarketer calls with a survey and two of the questions are: does anyone in your household own an IRA? Is it under $100,000, between $100,000 and $500,000 or over $500,000? You’d be surprised at how many consumers answer such questions especially if they get something (e.g., $50 of coupons at the supermarket which you can print from dozens of websites).

Once your qualified prospects are identified, you can mail them a specific item of interest and then have the telemarketer call again and set appointments.

Direct Mail & Advertising

Hire a copywriter so that you get good results. Writing copy is a science that most professionals do not take the time to study and consequently, don’t get good results from direct marketing efforts of mistakenly conclude this is a low-end type of marketing. However, the following process gains you inquiries from exactly the type of people you want to meet.

You send a postcard or run ads in local publications offering a booklet. Let’s say your target market is CFOs. You run your ad in the local business journal and send your postcard to a list of CFOs offering your booklet, “New Profit Strategies for Corporate Cash Management.” By targeting your target market and offering an item of specific interest to one of their concerns, you gain responses from the right people. After you send your booklet, you can follow up with a call and set appointments.

Summary

The key point of business development and getting the clients you want–get ACTIVE. You don’t wait for the business you want to come your way or pursue low impact tactics as networking. If you take active steps to identify the people you want as new clients, learn what motivates them, and offer them what they want, they are happy to choose you as their financial advisor.

This post provided by Javelin Marketing

Annuity Leads for Financial Advisor Marketing
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Estate Planning Is Not About Death

Tuesday, September 9th, 2008

Why Your Prospects and Clients Resist Estate Panning

Insurance professionals are often unsuccessful in having their clients take action on estate planning. For insurance professionals, estate planning is about the narrow issue of selling a life policy to pay estate taxes. For the prospect, estate planning is about the broader issue of protecting their assets. So many prospects are not interested in buying insurance which addresses only a small portion of their estate preservation concerns.

There are four reasons that a conversation about estate taxes is not a good way to start an estate planning conversation:

1. People don’t want to talk about their mortality

2. If you show your prospects how to save estate taxes, you have failed to answer the most basic question of every red-blooded American, “What’s in it for me?” It’s the kids who save the tax, not your prospects.

3. Many people erroneously believe they won’t pay estate taxes so a conversation about saving what they don’t think they will pay is an uphill battle (general rule of successful sales and marketing—don’t fight uphill battles—rather—find the hill that slopes downward and roll with it).

4. You bring up the issue of insurance too early. People have interest in their agenda, not your agenda.

So how can you help people with estate planning issues? Start with helping them with the issues that concern them rather than your insurance sale. You should of course charge fees for your time, advice and assistance. Check to see if there is any regulation in your State about charging fees for estate planning advice. I know of none.

There are four non-insurance estate planning issues that your prospects do want to talk about. Help the prospect with each of these issues and you will move toward an easy insurance sale, if appropriate. These are:

1. Your prospect wants to pay less income tax. Each time your prospect withdraws from their retirement plan, they pay tax. There are two ways to potentially reduce the overall tax bite. First, have them “fill up” the lower tax brackets. Let’s say your clients are a married couple, age 68 with a taxable income of $45,000. Tell them to make withdrawals from their retirement even though they are below the age of mandatory distribution. Why? Because they will pay only 15% tax on $14,400 of distributions, based on 2008 tax tables. If they wait, they may need to take much larger distributions later at potentially 25% federal tax rate or higher. Alternatively, conversion to a Roth IRA could be a significant savings and the Roth conversion calculators on any mutual fund web site can help you.

2. Your prospect wants to be in control. They want physical and financial independence. Therefore, they want to have advance directives: a living will (called by different names in various states) and a medical power of attorney. These documents allow your prospect to have as much say as possible during their lifetimes over their own health issues. In many states, these are legislature-approved documents available in any stationery store. Simply helping prospects complete these important documents goes a long way toward saying you really care (check that this does not amount to “practicing law” in your state). This is an easy way to start the estate planning discussion.

3. Your prospect wants to rid themselves of “hassle assets.” As people grow older, they want fewer problems in life yet they often own hassle assets such as residential rental real estate or an operating business. Often, these assets are held because the owners believe that a sale will lead to a large capital gains tax. There are at least four ways to eliminate or defer the capital gains tax:

a. Charitable remainder trust
b. Charitable gift annuity
c. Borrowing 90% against stock positions with a non-recourse loan
d. 1031 exchange in the case of real estate or trading a concentrated stock position in exchange for “exchange fund” shares

Help your client use one of these tools to eliminate their hassle assets (in each case, you generate income for the prospect or potential liquidity to buy insurance later).

4. Your prospect wants reduced liability. Many people are confused with ownership and control. One can give up ownership of an asset (and then have no liability for it) yet maintain control. For example, your prospect can transfer one million dollars of assets to an irrevocable trust or family partnership. That asset is now out of reach of creditors. Any attorney can include clauses in the documents that establish these entities so that your clients can tap these assets if later needed. So your client removes an asset from their estate, gains asset protection, yet still has control. Once the asset is segregated, you will find that prospects are much more likely to use it for insurance than if premiums had to be spent from their own checking account.

Notice that in each case above, you have focused on an estate planning issue where the payoff is for mom and dad, not the kids. Your prospect clearly sees “what’s in it for me.” Once you show people a personal payoff, its amazing how willing they are to take your advice or discuss how insurance can be a useful tool to offset the erosion of their estate to income taxes or estate taxes.

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What You’ve Been Told About Getting Referrals is Wrong

Friday, September 5th, 2008

There’s a ridiculous notion in the advisor community that keeping your clients happy is the way to get referrals. While happy clients are a necessary condition to get referrals, it is not a sufficient condition. Sure, your clients must be satisfied with your advice and service, but that’s not enough to have them send you the quantity of referrals you would like.

It’s an absurd assumption to believe your clients walk through life thinking as follows: “I love my financial advisor. My day won’t be complete until I do something nice for my financial advisor. What could that be? I know! I’ll get him a referral!” Your clients have more pressing things to think about like their own welfare. And most of them are not clear how they can help you because you have not made it clear.

Of course, you will get an occasional referral from a happy client. But any advisor that is in a growth mode should be growing their assets by at least a million dollars a month. If your referrals generate that amount of new assets, then you must be a super individual. But I’ll bet you get maybe three or four unsolicited referrals a year and the new assets are insignificant. Being a nice guy or gal and waiting for your phone to ring is not a formula for success.

Most financial advisors realize that this passive referral method does not work and many attempt another method to get referrals. They don’t sit back and wait, they ask. But the way they ask is unproductive. They use the “ambush method.” Here’s what that looks like. In the middle of a conversation with a client, you verbally ambush them, “Say Bob, who do you know, someone like yourself that also wants tax free income from conservative investing?” Taken off guard, your client begins to stammer, “uh, uh, geez, I’m not sure. I can’t think of anyone. Give me a couple of your cards and if I think of anyone, I will pass them out.”

This unstructured way of getting referrals lacks any system or structure. It’s ad hoc—you forget to ask half of the time and the other half of the time you get the stammering response from your client. If you want great results—in referrals, in portfolio performance, in your business—you must have a structured process.

Here is the process.

Step 1: At the beginning of the relationship, you ask your new client, “What do I need to do during the next ninety days so that you would feel comfortable introducing me to your friends and associates?” If you have reasonable clients, they will say things like

  • Call me back the same day I call you
  • Let me hear from you every two months so that I know you are looking out for my interest
  • Explain my statements and insurance policies to me so that I understand them

Step 2: You write down what your clients tells you and over the next ninety days you do what your client has requested.

Step 3: You contact your client after ninety days, review what they asked of you and have them confirm that you have done it. Now that they are clear about the quality of you and your service, you then ask them for a favor. You ask them to join you for lunch and for their help with your business development program (ask them to bring their address book).

Step 4: At lunch, you have them sign letters introducing you to their friends and associates (which you take back to your office and mail). The read sound something like this:

“Over the last few months, Stu Jones has been my financial advisor and he’s been the best advisor I have had. As busy as he is, he calls me back the same day I call him. He stays in touch with me regularly so I know he is looking out for my best interest. He is also the only professional that has taken the time to explain my insurance and investments to me so that I really understand what’s going on. I highly recommend Stu. Feel free to call me at xxx-xxxx or call Stu directly and meet with him at xxx-xxxx.

There you have it. It’s what most advisors lack: a structured process that prepares your client from day one to assist you. They tell you the conditions of satisfaction to meet in exchange for their help. You simply fulfill their conditions. So far, the record is 150 referrals from one client using this approach. Many advisors receive from 5 to 20 signed letters from one client. Overall, 40% of these clients who receive a letter of introduction become clients of the advisor within a year.

So if you want to sit back and wait, you may get what you deserve. The meek may inherent the earth but those with a structured active process will get referrals.

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Why Most of Your Prospects Don't Buy

Thursday, September 4th, 2008

If you’re honest with yourself, you know that of everyone you present to, less than 50% buy. The poor close ratio is due top your sales presentation not “clicking” with the prospect. You are committed to making your clients’ futures better, but if you present that benefit, you will lose sales.

Americans do not relate well to the threat or benefit of future occurrences. Here’s my evidence: Do you know people who smoke cigarettes? Can they read the warning on the package and have they heard that smoking leads to lung disease, heart disease and a potentially nasty death? Then why do they still smoke? Because they get pleasure today, right now, and they willingly trade a few seconds of present pleasure for an ugly and early death in the future.

Need more evidence about behavior? The Center for Disease Control tells us that 61% of Americans are overweight. I’ll wager that most of them know that cheesecake is high in fat, leads to increased weight gain, high cholesterol, potential hardening of the arteries, heart disease and an uncomfortable and early death. Yet we consume thousands of tons of cheesecake annually because we readily trade a few minutes of pleasure right now, for a potentially debilitating future (heart disease, diabetes, arteriosclerosis, etc).

What does this have to do with selling financial products? Because when you understand how people behave, you make more sales. Sales is all about human psychology, not your products or your firm.

You sell insurance or investments that provide a benefit in the future or helps avoid a future detriment. But I just proved to you that the future is a weak motivator. Americans want to know, “What can you do for me that feels good NOW!” Is it any wonder that your prospects say, “I’ll think about it,” or decline very important coverage when you offer a payoff that will not occur for many years? You walk away with no sale thinking that your prospect doesn’t get it. No– it’s you who doesn’t get it. Your prospect is not logical – your prospect is a present tense, pain-avoiding, pleasure-seeking homing device. Show them how they can avoid discomfort or have pleasure today and you have a sale.

This may seem difficult for you because your life insurance, your long term care policy, your annuity your investment products are all for protection of some future occurrence. How can you possibly frame the benefit of these products in the present?

Here’s the idea:

“Mr. Smith. Are you ever concerned that if something should happen to you, how your family will fair?
How often do you have that thought?
How does it make you feel?
Do you need one more thing to worry about?
Would spending 15 minutes to eliminate that worry be a worthwhile investment of your time?”

In this scenario, I do not sell financial protection against his death; I sell the end of his worry right now. He gets an immediate payoff from the policy – peace of mind. That’s a benefit your prospect can digest because it’s now. In fact, it’s more important than a benefit, I offer the avoidance of current discomfort. All of us are highly motivated to avoid current discomfort and we will take action and make purchases to avoid it.

If you think I may be off the mark, consider why you got out of bed this morning. Did you do it because of dreaming you would earn $100,000 today and the excitement of that conquest had you hop out of bed at 5 am rarin’ to go? Be honest. If you look closely, you see that you got out of bed for one or more of these reasons:

To avoid the discomfort and worry of having your house foreclosed on if you don’t pay the mortgage
You don’t want to be viewed as an irresponsible person
You set some appointments and people will be upset with you if you don’t show up today
It’s what your parents told you to do and they would be dissatisfied with you and that would make you feel bad
Your spouse is depending on you and you’ll feel like a heel if you don’t bring home some cash

You got out of bed today strongly motivated to avoid discomfort in the present. To avoid present discomfort is the most powerful yet subtle motivator. It is responsible for most daily human activity.

Now you know what motivates your prospect to act. Stop talking to them about the future. Give up explaining how that group of mutual funds will give him a more comfortable retirement or that he really needs LTC protection because 43% of everyone over age 65 spends time in a nursing home. While these are interesting logical appeals, he doesn’t really care. He wants to know how you will make him feel good today, or more importantly, take away current discomfort.

So your challenge is to take 30 minutes right now. List each of the products and services you sell and list what pain those products and services can help your prospect avoid or what pleasure they bring, TODAY! Then develop new sales scripts around those current payoffs and make sure that the word “will” is never used again in a sales presentation. The word “will” precedes a future payoff and from now on, you sell only current payoffs. Every time you have the urge to say, “will,” say, “does.”

If you cannot figure out how to speak about your products as a current benefit or detriment-avoidance tool, you better give your prospect some cheesecake or a smoke.

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Henry Ford would have made a great financial planner—take a lesson

Wednesday, September 3rd, 2008

Eighty years ago Henry Ford uncovered the efficiency of product standardization and the assembly line. The product was so standardized it gave rise to the joke that a customer could have a car in any color—so long as it was black. Even though this winning formula for efficiency and profitability is decades old, most financial advisers ignore it and have organized their businesses inefficiently.

Many financial advisers treat each individual financial client as a custom, individualized project. Unless you have financial clients that will pay you a lot (i.e. you earn at least $15,000 annually per client), you will never have a good business with this approach.

Your business must be set up as a process. Every new financial client gets the same services and products. Sure, they may get them in different proportions, but every client who gets the “moderate portfolio” had better own the same stocks or funds or you are setting yourself up by spending excessive time on each account, providing personalized service when it’s not necessary and you’re not being paid enough to do so. You do it because you are desperate to gain and retain financial clients as you have an inadequate marketing system.

A really good business is a cookie cutter approach to dealing with clients. That does not mean clients get some impersonal program. It means they get a great program because you have honed the creation of your services and products that you offer to the exact needs of the finely focused homogeneous market you service. If you cannot treat each client in a similar fashion, then you have not adequately focused your target market and you will forever be spending 12-hour days at the office.

Does Intel design a new chip for each customer? No, they do not do projects. Their business is a process, producing millions of the same chips per month.

Should every business be designed as a process? No. Estate planning does not often lend itself to a process and each client may need an individualized program. Just make sure that when you work on a project basis like this, you get paid a lot.

Let’s take examples to make this clear. Do you think attorneys charge a lot? They must because it’s difficult to make a process out of the work they do. Each client is a separate consulting project with new research and investigation required. But notice that family doctors set themselves up as a process. The doctor offers a very narrow set of products and services.

He can advise on these issues:
Joint pain
Soft tissue maladies
Head ache
Cold and flu

He uses the same prescription drug whenever he sees the same situation (i.e. he recommends the Merck drug for joint pain every time, rather than what many financial planners do—recommend the ABC growth fund one month and the XYZ growth fund next month). If a doctor is confronted with a need outside of the narrow products and services he offers, he sends you to the specialist.

Each patient gets 20 minutes:

· 4 minutes asking questions
· 8 minutes observation of patient
· 8 minutes to administer a treatment, prescribe a drug or refer to a specialist

NEXT PATIENT, NURSE!

Family physicians are the ultimate example of professional efficiency.

Once you define your target market, let’s take retirees for example, you select the products that are appropriate for people who are retired: fixed income investments, conservative equities, health insurance products. And while each client is an individual with individual circumstances, they all have a need for some degree of these products.

Of course, Mr. Smith may get 100% fixed income products with the funds he brings you because he has a large net worth and no need to tolerate equity volatility nor does he need equity growth. He has adequate health insurance and no need for long term care insurance. Mrs. Jones, with a more modest portfolio, gets a portfolio of 60% fixed income, 40% equities and she also needs more affordable health insurance and a long term care policy. While each financial client is different, they all get the same building blocks in different proportions.

Through this standardization of clients and the products and services you provide, you get very efficient. Assistants can handle much of the grunt work and you get to leave the office at 3 pm for golf.

Take a lesson from Henry Ford. For efficiency and profit, standardize what you offer.

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Educating your prospects will make you poor

Tuesday, September 2nd, 2008

Many financial advisers feel it’s important to educate their prospect. There’s an idea that if you educate your prospects, they can make good financial decisions. I disagree.

And advisor I know well has 18 years of education, 20 years of experience and various credentials. His prospects will never know a fraction of what he knows, no matter how many hours he spends educating them. It’s his job to know what choices the prospect should make and tell them so. The professional is responsible for the client taking the correct action (and is held to that standard in the securities industry). If his client wants to buy stock options and that’s not suitable for them, the financial adviser will be held liable if he allows the client to make that investment. Therefore, it becomes the adviser’s judgment to know what they should do.

Of course, you still need your prospect’s agreement for your recommendations. So rather than educate them by telling them (the usual mode of education in this country), please educate them by asking questions. They already know the answers and you can have them educate themselves.

Here’s what educating (and selling) by asking questions sounds like:

Professional: What are your plans when your health changes?
Prospect: What do you mean?
Professional: You know that as people age their health declines. So as you age, what are your plans when your health changes?
Prospect: I never really thought about that seriously. I have good health insurance, and always assumed that was adequate preparation.
Professional: Health insurance, of course, provides for you when you have an illness that they can cure in a few days in the hospital, but what happens if your health changes such that you can’t go shopping, you can’t take care of the house, and you can’t walk up stairs?
Prospect: Well I certainly don’t want my children to have to take care of me.
Professional: So what solutions do you think are available to you?
Prospect: I’m not really sure. I know people go to nursing homes, but I could barely afford that.
Professional: What other solutions do you think are available to you?
Prospect: There’s insurance, isn’t there?
Professional: Do you think you should consider that as one of the alternatives?
Prospect: Yes, but I don’t know anything about it. I’m sure it’s expensive and I couldn’t afford it.
Professional: How much do you think it costs?
Prospect: Jeez, I have no idea, what, maybe $500 a month?
Professional: What if you could get insurance to allow you to stay in your home, have help come and assist you, and could get that for $250 a month—would that seem to be a reasonable solution?
Prospect: Is that really available?
Professional: If it were, would you want to know about it?
Prospect: Sure. I don’t want my children to have to take care of me and if I can’t take care of myself, what other choice do I have?
Professional: How would you pay for that?
Prospect: I have some investments from which I don’t take all the income.
Professional: For example?
Prospect: I have an annuity that I reinvest and I also have a mutual fund that I reinvest.
Professional: How much a month are you reinvesting?
Prospect: It’s over $1,000 a month.
Professional: So if the insurance turned out to be a good solution, you know you can pay for it?
Prospect:—Yes, if it’s about $250 a month.

Just by asking questions, this “sale” and the prospect’s education is mostly complete. Notice how much more efficient this is than “telling,” handling lots of questions and potential objections. When prospects see the solutions for themselves, they cannot object to their own insights.

The payoffs to educating selling by asking questions are enormous. They increase your sales success in five ways:

1. Questions direct your prospect’s thoughts. When you speak, your prospect’s mind wanders, he thinks up objections, he questions the validity of your facts, he questions your credibility and he may even think about what to have for dinner. But when you ask a question, you get laser-focused attention. We have been continuously trained to answer questions as accurately and completely as possible, starting from the first grade. Correctly answering questions is even the basis for most television game shows. So when you ask questions, you take advantage of your prospect’s cultural training to provide their full attention and best answer.

2. Questions allow you to find out the necessary facts (ethically important for any advisor and legally important for securities licensees to comply with the “know your client” rule).

3. Emotional questions allow you to determine the “emotional facts” (your prospect’s likes/dislikes). If you don’t know how your prospect feels, you cannot make a recommendation that feels “right.”

4. Questions increase your stature and credibility in the prospect’s eyes. The fastest indicator of a person’s intelligence and caring are the questions they ask.

5. Questions allow you to maintain control of the conversation because the person asking the question controls the conversation, while the person answering has lost control.

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The big disconnect between financial advisers and their prospects

Friday, August 29th, 2008

Everyone wants these benefits:
• To have more income
• To pay less tax
• To protect their assets
• To provide financial security for their family if their income is interrupted
• To maintain their financial and physical independence in retirement

Products and service you offer provide these benefits:

• You have products that provide more income than bank accounts (bonds, bond funds, mortgage funds, bank loan funds, annuities)
• You have products that reduce income taxes (annuities, tax free bonds and funds)
• You have products or services that help people protect their assets (any product with a guarantee, estate planning advice)
• You offer life and disability insurance in the event the wage earner is disabled or dies
• You provide long term care and health insurance to maintain physical and financial independence when illness strikes

Your prospects have desires and you have the solutions. It’s a perfect match.

So why is it that you have a chronic shortage of new business, you spend much of your time prospecting and you need to persuade people to do business with you. You have a constant need to find people who you can interest in your offerings. Obviously, there is a disconnect between what they want and what you provide.

These are three possibilities that cause the disconnect:

1. Prospects don’t trust your products to perform
2. Prospects don’t trust you
3. Your communication is inconsistent with what the prospect needs to hear such that prospects don’t realize that you can provide what they want

In all three cases, the issue is you. The issue is that you communicate your service so that you either leave the prospect with a lack of trust, a lack of understanding or a cloudy perception of how you can help. Fortunately, there is a solution.

Your communication is so riveted to your agenda, that the prospect neither trusts you or understands how your agenda coincides with their agenda. Sure, you say you’re “client centered” but I will prove that’s not so.

Have you ever sent a product brochure to a prospect or done a mailing campaign that featured a product and its benefits? This is being product centered (not client centered). Any type of sales or product information screams “MY AGENDA.” But people are not interested in your agenda. Not surprisingly, they are interested in their agenda.

Here’s the difference. If Mrs Smith receives a seminar invitation titled “All About Annuities—how to save taxes and gain safety,” it is obvious this is your agenda is to sell annuities. I understand that you think this is her agenda because the annuity is a tool that heps her get what she wants. Surgery is also a tool that helps you get what you want (good health), but do you have a desire for surgery? You want the payoff—you don’t want involvement with the means, the tool or the service that produce the payoff.

Similarly, Mrs. Smith does not want your annuity and she will not attend your ANNUITY SEMINAR BECAUSE:

a. She is not interested in your sales pitch
b. She does not want to feel pressured
c. She is not interested in what a sales person says.

She is interested in insight, not merely product information. She does not want an annuity (she doesn’t even know what it is)

Now let’s suppose you send a different invitation. This one is titled “Six Ways Retirees Can Cut Taxes Now.” The invitation lists these topics to be discussed:

• How to reduce or eliminate tax on social security income
• The two asserts held by many retirees that can be double taxed (and how to avoid it)
• Why some retirees pay excess taxes by having the wrong investment in their IRA
• How it’s possible to get an 8% payout on your principal without risk to capital
• The government’s offer to subsidize the cost of heath protection yet few retirees use
• How to be sure that your spouse or children have the financial resources to make them secure when you’re gone

Every one of the above topics can include use of an annuity but annuities are not mentioned because buying an annuity is not part of the prospect’s agenda. If you want prospects to attend a seminar or respond to any marketing offer, your offer must be 100% about their agenda and 0% about your agenda. Notice that every topic above is about the payoff and does not mention the means to get the payoff.

When you are truly client-centered, you stop marketing products, you focus on your prospect’s emotional desires and you speak about your products only at the end of the interaction because they are unimportant to the buyer. Like the contractor who builds an addition to your house, you could care less what tools he uses. You only care that the addition is beautiful, adds value to your property and gives you enjoyment. You don’t want to know what type of lumber is used for the studs, whether the sheet rock is ½” or 5/8” or that the carpenter uses Craftsmen hand tools. Had the contractor focused on his tools in his sales presentation, there would have been no sale.

Are you ready to sell more by dropping your focus on your “tools” and focus on the prospect’s agenda?

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