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At most advisory firms, the founders are the primary rainmakers. They seem to have this innate, magical ability to bring in new business, and their entire firms have grown up around them to support them in that role.
The message to many of the next-generation hires, meanwhile, is that “you either have this innate skill or you don’t.” But what can firms do if they want to foster and build a business development culture? If you want all your advisors to develop new business, you’ll need to create a firm culture that makes generating sales a way of life — for the entire firm.
Many firm owners share stories of frustration when it comes to getting advisory staff to take on the vital role of developing new business. They think the answer lies in the compensation structure — but I believe it takes more than monetary rewards to build an organization focused on successful business development.
The answer lies in implementing these six key strategies.
1. EMBED BUSINESS DEVELOPMENT EVERYWHERE
Make business development a part of everything the firm does, and something that is everyone’s responsibility.
Business development activities and expectations must be formally written into job descriptions; make it clear that generating new revenue is a part of the job. Set clear expectations and provide regular feedback.
Then create specific goals that can be tracked regularly and frequently — something essential to sales success. To drive action and create accountability, consider activity-based goals: number of phone calls made, meetings attended or referrals collected.
Activities drive results, and you can also measure and reward those — such as new clients and net new assets.
2. HIRE INTELLIGENTLY
Don’t force people on your team into a sales role if they are not suited for it. It is important to ensure you have the right people taking on the tasks most appropriate for them. Selecting the wrong people to go out and network with prospects, or to speak in public, can be disastrous for both the individual and your business.
Instead, understand the characteristics and traits associated with successful sales professionals, and then hire people who match that profile.
In virtually any industry, most successful salespeople tend to be relentlessly persistent, strongly oriented toward goals and accomplishments, inquisitive and attentive, and passionate and enthusiastic about their industry and offering. In addition, they always take responsibility for their results.
I would argue that these traits and characteristics are not trainable. Rather, your best tactic is to screen and hire individuals who possess several (if not all) of these attributes. Then you can play to your team’s strengths and avoid setting people up for failure.
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3. SUPPORT YOUR TEAM
Training and coaching are the key elements of success in cultural change. It is important that everyone in your firm understands why clients should choose your firm over your competitors — and is able to articulate this to prospects with a high degree of confidence and conviction.
So make sure you’re arming employees with the right messaging so they can be successful in finding new clients.
I recommend that a firm’s original rainmakers take on this important role; you could also hire a sales and marketing manager with a proven track record of success as a “player coach.” Whoever performs this critical function, you’ll want to make sure the entire firm gets training and coaching.
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4. COMMUNICATE
Champion the business development cause vocally and frequently.
The leaders of your firm should motivate the team and create engagement by communicating regularly, discussing new business goals and reporting the progress that is being made toward quarterly, semiannual and annual goals.
Make sure everyone knows the firm’s business development plan and their role within that plan.
Business development is a process that takes time — particularly when you are starting out — and results do not come overnight. That makes it even more important to celebrate smaller milestones and reward those who contribute to the firm’s achievements.
But don’t just celebrate successes: Identify the areas in which the firm has fallen short, and discuss changes that can be made to improve performance.
5. RETHINK FIRM PROCESSES
To support the business development process, you’ll need to invest in the right organizational structure, tools and resources.
Ask yourself: What have you done to free up your lead advisors so they can spend more time working with client referrals and prospects? If your organizational structure does not provide your advisors with leverage by using junior advisors and administrative support, and your top advisors spend all of their time serving existing clients, how much time can they realistically commit to developing new business?
To be successful, advisors need to allocate time every day to business development activities. Does your structure include marketing staff and resources to assist them in their efforts? To what extent are you utilizing your CRM solutions to free up advisors’ time?
6. PAY FOR SUCCESS
Compensation plans don’t manage people’s performance; people manage their own performance. Many of the firms that contact my firm about creating a sales incentive plan have an existing plan in place — but often it hasn’t paid out in a long time (if ever). And most of those firms are not addressing this lack of achievement with the individual advisors directly.
Let me be clear: Incentive compensation plans are not a replacement for performance management, active communication and development of your people; they cannot be a one-size-fits-all solution.
That said, however, incentive pay has some advantages: It can motivate, align and reward good performers, incentivize specific behaviors and outcomes, communicate powerfully, and align individual and firm results.
Your compensation plans should recognize activity and reward results — both behaviors and outcomes. Ask yourself what results and behaviors you want. Do you want to reward volume or quality? Team or individual results? Are you looking to drive client satisfaction, client retention, net new assets or net new revenue?
WHAT TO REWARD
A few things that I recommend for using incentive pay to spur business development:
Remember a firm that successfully creates a culture of business development won’t have to rely on a few rainmakers to support the entire firm. Each member of the firm, from the receptionist to the partners, can contribute their unique skills and insights to constantly improve existing client relationships and cultivate new ones.