7 Fatal Prospecting Mistakes You Can't Afford To Make

​I love helping financial advisors develop prospecting ideas and strategies. When I first get introduced to financial advisors, I try to ask them, “What’s the biggest thing you’re struggling with right now?”

9 times out of 10, people will tell me that they are having difficulty prospecting. This is a shame because prospecting bottlenecks the rest of the sales process. Without successful prospecting, there’s no qualifying, appointment-setting, and no client conversions. Failure to prospect stops everything dead in its tracks.

Fortunately, one of the best ways to get moving in the right direction is to become conscious of the prospecting mistakes that you might be making.  Here are some of the most common prospecting mistakes I’ve seen, in no particular order:

1. Thinking Quantity Over Quality.

I’ve noticed that there are some people who have an anemic pipeline (that’s a problem, too) and there are others who have tons of “prospects”, but upon closer examination, they’re poor quality.  You should strive for both quality and quantity, but I would much rather see you with a few quality prospects over dozens (or hundreds) of poor quality ones.
Your whole sales funnel should look like this:

Leads -> Prospects -> Qualified Prospects -> Clients

Here’s how I define these terms:

• Lead – these are just names on a list. It could be a list you bought or a list of people who downloaded your whitepaper. They aren’t a prospect because you don’t have enough information to tell if they’re prospects yet.
• Prospect – these are people who fit the criteria you are looking for. If you have a $250,000 account minimum, a lead would only become a prospect once you find out that he/she has at least that amount in investable assets.
• Qualified prospect – these are the people that you want to convert to clients. For generalists (people who work with anyone who can fog a mirror), it’s possible that 100% of prospects are also qualified. Another good sign of a qualified prospect is two-way communication. A qualified prospect is someone who meets your criteria and is talking to you/having appointments.
• Client – this is pretty self-explanatory.

Getting leads is not the same as filling your pipeline.

Your pipeline should contain nothing but prospects and preferably qualified prospects. One of the best ways to “pre-qualify” is to have a niche and make sure your prospects are in that niche. I understand that it takes a long time to put together a pipeline of nothing but qualified prospects, but that’s what you should be doing. The way to win in business isn’t to collect the most names and phone numbers. It’s to make the most money. Never forget that.

2. Believing Social Media Alone Will Make Your Phone Ring.

Social media is awesome, and it has completely transformed the way we do business. Heck, I get so much business from LinkedIn that it’s not even funny. But it is a mistake to think to rely on any type of prospecting tool completely. You should have a variety of techniques – phone, mail, social media, networking, referrals, etc.

I see so many financial advisors get sold this dream that all they have to do is write blogs and, like magic, they’ll have an influx of inbound leads. While this does work, there are two caveats:

• Most people will give up long before their inbound marketing strategies pay off. Social media growth tends to be exponential and/or in bursts. As you get more connections/followers, your stuff gets shared more and more. When your stuff gets shared more and more, you get more connections and followers. However, in most cases, it takes a lot of time to get past the “slow phase”. Advisors will write three or four posts, not get any leads, and then give up.
• Again, it can’t be your only prospecting strategy. What if your social media accounts get shut down for some strange reason? All your eggs would be in one basket and get smashed to pieces.

3. Constantly Babysitting Your Current Clients.

Customer service is a great thing. I definitely don’t want you to not serve your current clients, but don’t do so at the expense of prospecting. It might feel more important to work on the deals you have in progress and/or your current accounts, but remember how you got those clients in the first place – by prospecting. Spending time with current clients (past a certain point, of course) comes with a huge opportunity cost.

4. Not Leaving Voicemails.

Always leave a voicemail! Anyone who tells you otherwise hasn’t tested leaving a voicemail versus not leaving a voicemail. If you saw an unknown number on your phone, would you call it back without a voicemail? Nope! You’d figure if it’s important enough, the person will leave a message.

According to InsideSales.com, the average voicemail response rate is 4.8%. So for every 20 voicemails you leave, one person will call you back. Is this worth your time and effort? I certainly think so. Especially when you know this sweet voicemail hack…

The voicemail hack: people who hate leaving voicemails typically point out that they waste time. After all, that voicemail prompt is pretty long. Go ahead and skip it by pressing the star button (*). It will take you straight to the “beep”. This works on most phones, so it’s a great way to save thirty seconds on most dials. If that doesn’t work, try the pound sign (#) or “7”.

When you leave a voicemail:

• The prospect can hear your voice and feel your confidence.
• You continue to build awareness with the prospect. Your messages help the prospect to become more familiar with you.
• The prospect can listen to your message when it’s convenient for him/her.

5. Trying to Sell.

Repeat after me: Thou shall not sell whilst prospecting.

I know that you’re excited to let the whole world know about you, your company, and what you have to offer, but prospecting isn’t the time for it. When you are prospecting, all you should be doing is asking simple, targeted questions that address your prospect’s issues to determine if you are a good fit.

When you get asked, “What do you want to see me about?” or “Why do you want to set an appointment?” let them know that you want to have a discussion about their financial situation to see if you can help in any way.

The truth is that the person might not need your services, but that’s to be figured out later. When you’re on the phone setting appointments, concentrate on that one thing… setting appointments. Nothing else.

I guess you could say that you’re “selling” the appointment, but you know what I mean. The common mistake when financial advisors try to set appointments (especially when cold calling) is to sell everything BUT the appointment. It goes something like this:

• They try to sell themselves – their trustworthiness, credibility, etc.
• They try to sell their company – they talk about how long they’ve been in business, how great they are, etc.
• They try to sell their product/services – their unique value proposition, advantages, etc.

Don’t promote the benefits of you, your company, or your services (too much, at least). Promote the benefits of the appointment instead. Let the prospect know that there’s no risk and that there is something he/she will gain for the time investment. As a financial advisor, your prospects should gain some tangible benefits just by spending time with you, whether they move forward or not. These tangible benefits could be:
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• Important information/news.
• Tax-saving ideas.
• Ways to save money for retirement, children’s education, etc.

6. Not Following Up.

Deals aren’t typically closed on the first call. Even if you do everything else right, you can still fail if you don’t follow up. Following up is the biggest thing, besides relentless prospecting, that can skyrocket your income.

Only 2% of sales are made on the first contact. This necessitates some form of follow-up, but nearly half of all sales professionals never follow up. Do you see the opportunity here? This is the point at which a lot of my clients get excited about following up and start to commit themselves to following up with all of their leads. That is, until they learn that 80% of all sales are made between the fifth and twelfth contact.

“You mean I have to follow up with someone twelve times? That’s too pushy. I’m not that aggressive.”

You need to realize that most of your qualified leads aren’t ready to do business with you. In order to catch them when they are ready, you must continuously follow up to remain top-of-mind. Over 90% of salespeople stop following up after the fourth contact. You have to stay in the game.

7. Failing To Prospect In The First Place.

The deadliest mistake of all is unfortunately all-too-common. I’ve yet to meet many people who default to prospecting mode. That is, when they have a free 20 minutes, they think, “Let me hit the phone and call some leads.” If that’s you, congratulations! You’re one of the rare ones.
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Prospecting is easy not to do because it doesn’t pay off right away. You must block out time in your calendar for prospecting. There are so many productivity apps, software, and browser extensions in the marketplace today but not many people actually use them. It’s easy to get distracted and do anything except pursuing new prospects. Make an appointment with yourself that can’t be broken, and make sure that you do it. 

P.S. If you're a financial advisor who wants to get more clients from LinkedIn, make sure you check out How to Get Clients With LinkedIn: How Financial Advisors Can Set Appointments and Convert Prospects With LinkedIn