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Increasing Prospect-to-Client Yield for Accelerated Growth

In my previous blog post, I set the structure for an adviser’s sales funnel with an objective to achieve efficiency since the adviser’s labor content increases with each successive stage.

While efficiency addresses productivity of applied resources, it doesn’t determine if the marketing and relationship content delivered at each stage connects with the prospect’s decision criteria. Yield measures the effectiveness of converting prospects to clients, and a firm’s marketing ROI increases dramatically with small increases in yield across the stages.

The Impact on Client Acquisition
Two marketing systems that start with the same number of leads will have dramatically different results at each stage by increasing yield.

A 51 percent increase in yield at each sales-funnel stage produces a 300 percent increase in the number of clients. For a fee-on-AUM model, there’s a huge profit payoff to increased yields as the firm’s one-time client acquisition costs are offset by ongoing revenues.LouryBlogPic1

Steps to Increasing Yield

  • Lead Generation. A lead from the firm’s marketing program has a higher order value because the prospect has taken the initiative in starting a relationship. Already, some level of inertia has been broken.
  • Yield Issue: Match up the prospect’s stated needs to the benefits the firm is able to deliver.
  • Tactical Consideration: After talking to leads, if there’s a frequent mismatch between the prospect’s needs and what the firm’s benefits deliver, the first place to look is the marketing content’s messaging (e.g. websites, emails, presentations, blogs, etc.)

A prospect conducts the first-level evaluation by reviewing digital content (even if through a referral), and if this content fails to define the firm’s services, and those most able to gain benefits, there will be mismatches and lower yields.

  • Interest Qualified. During this stage, one of the firm’s advisers establishes the business relationship. The two core purposes are: 1) identifying the prospect’s top needs; and 2) making relationship connections.
  • Yield Issue: The biggest issue in hiring any professional services practitioner is the fear that what is said during the sales process will fail to materialize after the hiring decision.
  • Tactical Consideration: In every initial meeting, the adviser will hear various needs, anxieties and aspirations; these represent the content an adviser’s solution ultimately addresses. Take the prospect’s top need—say retirement planning—and schedule a follow-on meeting for a focused educational session of that need.

The prospect directly experiences the adviser’s approach and quality; it is akin to product sampling or test driving. There’s no more powerful tool for increasing yield than this type of customized educational outreach during the sales process.

  • Business Qualified. It’s now time to make planning concepts concrete by producing a proposal showing how the adviser will meet the client’s need, anxiety and aspirational inventory.
  • Yield Issue: Prior baggage with other advisers sets a risky edge to forming a new practitioner relationship.
  • Tactical Consideration: Many prospects come into an evaluation having had a poor recent experience with another adviser. Before forcing a long-term commitment, give the prospect a choice to phase into the full-service package. For example, begin by implementing a retirement plan or a portfolio restructuring using a project-based fee.

Choice offers the prospect more control in right-sizing the package to his or her risk/anxiety level in beginning a new advisory relationship. Taking a smaller—and successful—step gives a more comfortable pathway to a fuller relationship.

  • Solution Verified. The proposal will be presented.
  • Yield Issue: Advice solutions often involve complex concepts, emotional issues, and anticipated results, and it’s difficult to digest it all in a single presentation meeting.
  • Tactical Consideration: Structure the proposal with the needs/anxieties/aspirations inventory as the lead with the firm’s ROI benefits following. Then, send the proposal to the prospect a few days in advance to allow a paced initial review before the more formal meeting.

The final yield results in a prospect becoming a client is them saying, “Yes.”

  • Yield Issue: Some people have difficulty making a final decision, particularly in light of previous adviser experiences.
  • Tactical Consideration: If possible, the most powerful method for eliminating buyer’s remorse is to set up a meeting with an existing client to mentor the uncertain prospect in how the adviser delivers on the solution. The next best option is to schedule a follow-on meeting in the near term; giving a person space to get emotionally prepared for a new relationship.

Yield Determines Profitability
An adviser that increases yields in the sales process improves profitability by reducing waste and fruitless relationships, while also launching accelerated and long-term revenues through better-matched clients.

Kirk LouryKirk Loury
Wealth Planning Consulting Inc.
Princeton Junction, New Jersey

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Getting Results from Each Sales Funnel Stage

The Schwab 2015 RIA Benchmarking Study identified client acquisition as one of three top priorities; this is consistent with other adviser studies over the past few years. There’s nothing surprising about this emphasis since advisory firms are not only specialty practitioners, but small businesses, too. What business can grow without increasing its client base?

Client acquisition is the end result of a much more involved process broadly called “prospecting.” Prospecting integrates the entirety of a firm’s marketing efforts from a website to seminars to email campaigns to referrals.

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The Adviser Sales Funnel

The Sales Funnel
A “pipeline” or “funnel” (photo, right) are the common terms used to describe prospecting. I prefer a sales funnel because it identifies the client acquisition stages and the flow from one stage to the next.

Labor Increases with Each Stage
A lead enters the funnel through a website inquiry, referral, seminar, email reply and other direct-response methods. These incoming leads contain relatively little of an adviser’s most precious commodity—time.

Once a lead enters the funnel and proceeds through each stage, the labor content increases dramatically. Therefore, each funnel stage is a component of the advisory firm’s marketing ROI.

Matters of Salesmanship and Insight
Each prospect is looking for an ROI in the relationship, too. When a prospect sees the expected benefits received greater than the cost, he or she is willing to move to the next stage. This is an especially important concept to appreciate in determining the marketing system’s value: the prospect controls the movement from one stage to the next.

Such control places the responsibility of demonstrating the benefits and their monetary and emotional value on the adviser. Proving this value is one measure of analysis and another measure of salesmanship. (For a detailed discussion, see “Clients Buy Benefits, Not Features.”)

Making Each Sales Funnel Stage Productive
The stages of sales are lead generation, interest qualified, business qualified, solution verified and ‘Yes.’ Below are tips to make each stage productive.

1.) Lead Generation. An effective marketing program uses positioning content that helps the recipient of a lead-generating message qualify its validity to him or her by concluding, “That would be useful for me.” or “I don’t need that.” Within this, focus on:

  • Efficiency Issue: Each message must drive home the key positioning elements that fit with the firm’s benefit package and its value.
  • Key Tactical Step: Provide clear call-to-action content and buttons that allow a choice of “Yes” or “No.” While a “Yes” allows the recipient to become a lead and enter the funnel, a “No” minimizes opportunity costs. (Note: my next blog will address improving “Yes”/“No” yields stage to stage.)

2.) Interest Qualified. If the marketing program achieves clear positioning, the emphasis is identifying the prospect’s decision time frame. A “Not Ready Yet” answer is a first cousin of a deep-in-the-funnel “No”; they both severely damage marketing ROI. Within this, focus on:

  • Efficiency Issue: Determine if the expressed needs are urgent enough to move to action versus a “just looking” approach that can sap resources.
  • Key Tactical Step: Develop a qualifier for the person handling lead responses and enter the results into the CRM for ongoing tracking.

3.) Business Qualified. The assigned relationship manager evaluates the prospect’s needs, their fit to the benefits the firm produces, and the prospect’s projected value. Within this, focus on:

  • Efficiency Issue: The prospect’s needs may be urgent but not be of sufficient business value given the firm’s service delivery costs.
  • Key Tactical Step: Strategically, develop a separate package for low-asset prospects knowing that such relationships will be valuable in the future through wealth accumulation and transfers.

4.) Solution Verified. Meetings have occurred and the final evaluation is at hand. Within this, focus on:

  • Efficiency Issue: Confirmations are made of needs and benefits in order to minimize (if not eliminate) delays.
  • Key Tactical Step: Provide emotional affirmation and talking points that assist the soon-to-be-client in confidently severing past advisory relationships and informing other decision influencers such as children, accountants, and attorneys.

5.) “Yes.” The relationship moves to a fiduciary overseer of the client’s future well-being. Within this step, focus on:

  • Efficiency Issue: The closing package (e.g. investment policy statement; account-opening documents; authorizations, etc.) must exist in a workflow to ensure 100 percent accuracy and a top-end presentation.
  • Key Tactical Step: Restate how the benefit package addresses needs, anxieties, and aspirations; doing so minimizes any buyer’s remorse.

ROI is the Result
The flow through the funnel actually involves substantial thought and activity to ensure that a prospect has the best chance to produce value, to become a client. Too often, there’s a sense of “let things take care of themselves” instead of establishing directed efforts designed to make each stage productive to the firm’s marketing ROI.

Kirk LouryKirk Loury
Wealth Planning Consulting Inc.
Princeton Junction, New Jersey