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Written by: Matthew Jarvis
I used to keep pictures of big dreams I wanted to achieve on my computer. I had a picture of a Tesla because that was my dream car. I had a picture of the lake on which I wanted a house and the income goal I wanted on my tax return.
All those things became a reality for me, but to make it happen, I had to translate those into prospecting.
I distilled those goals into making ten telephone calls daily. Not necessarily cold calls because I didn’t have the courage for that. But every morning, I would get up and make ten calls for the day.
Sometimes, I would wimp out and do a bunch of return calls to clients—but that’s still better than no calls at all. Other times, I would be more effective, and those ten calls were to centers of influence, prospects, or people I knew in the community.
My daily telephone practice helped me translate those “someday” aspirations into a much more tangible “I have to make ten calls today to get a Tesla.”
If you want to translate your big goals into the actions you need to take to get there, you need to know your actual numbers.
Numbers you should be tracking
I recently chatted with an up-and-coming advisor named James, who said he wanted to bring on 25 new clients this year—which I thought was fantastic. I was excited to help James figure out how to make it happen, so I drilled him with these questions:
How many clients have you brought on this year?
Where did your clients come from?
And what’s your close ratio?
James’ eyes got really wide, and I realized he wasn’t tracking any of this.
If you’re like my friend and aren’t tracking this data yet, make it a priority for 2024. We can still salvage some data to give you a baseline for last year, but it will take some backtracking.
Go into your CRM and examine how many clients you brought on last year. Our definition of a client is someone who signed the agreement and paid the fee.
If Bob said he’d pay you after he returned from his Mediterranean cruise, but there’s no receipt of payment, Bob doesn’t count as a client.
Next, look at where those new clients came from or their source. For example, did you bring those clients in as prospects through referrals, your website, a seminar, or another source?
Now, take another step back, and let’s look at each of your sources. What is the total number of prospects that called your office from these sources? (FYI: Prospects need names and appointment dates to count).
Once you know how many prospects you found from which source and how many became clients—Bam! You’ve got your conversion rate.
You need to know your conversion rate or close ratio to figure out how many prospects you need to see to reach your goals. To bring on 30 new clients, you must meet with more than 30 prospects.
Let’s return to my friend James, who wanted to bring 25 new clients. After we did this exercise together, he found that he had a 30% conversion rate. We did a little math to find that he needs to see 80 prospects to acquire 25 new clients.
Next, James must figure out where he can fit 80 prospect meetings into his calendar.
You need to break down all of this stuff before you even start pushing for prospects. You can keep the data in an Excel spreadsheet; it doesn’t need to be fancy. Just make sure you have real names and real numbers listed.
Your numbers are wrong
You’d think that, as advisors, we’d have a pretty good grip on numbers. But when it comes to our own, we don’t. It doesn’t matter if we’re talking about revenue, new clients, assets under management, or anything else. Whatever number you have in your head is wrong. I promise you, that number is wrong.
Whatever report you pulled it from is also wrong (your team didn’t use the correct filters).
You brought on seven new clients last year; the more you thought about it and talked about it, the more you rounded to ten. After some retelling, ten is practically 15, and before you realize it, you think you brought on 22 clients.
I don’t make the rules here. That’s just how it works—for all of us. I’m as guilty, if not more than the next guy. We have an inexplicable habit of inflating our numbers.
To keep yourself honest, you need to track everything in a spreadsheet. Make sure you have real names, sources, and fees paid.
Your spreadsheet could be as simple as “Kevin and Mary came on this date from a referral and paid $15,000.”
And please, for the love of Pete, never ever talk about your numbers without having them physically in front of you.
My Perfect RIA co-host, Micah Shilanski, CFP®, and I love meeting our podcast listeners and sharing advice at conferences. If you come up to us and say you can’t get clients, and that’s all the information you can give us, we can’t work with that. I can’t help you.
But if you come and say, “Hey, listen, I brought in seven new clients from this source. I met with 47 prospects from these sources, and I talked to these many leads,” we can fine-tune this.
Action Items
- Break down your prospect process. It doesn’t matter if your process is simple or as elaborate as mine—it doesn’t matter.
- Figure out what happens in each step. It can be as simple as:
1. The prospect calls the office.
2. My team schedules an appointment.
3. The prospect comes in, and we talk about____.
4. We have the follow-up meeting.
Now, look at those steps and determine your conversion rate for each and where prospects drop out.