Editor’s Note: This is the latest in a series of posts by speakers at the 2013 NAPA/ASPPA Summit, March 3-5, 2013 in Las Vegas. Joshua Dietch, Managing Director, Chatham Partners, and Yaqub Ahmed, Head of Investment-only Sales, Franklin Templeton Investments, share six conclusions from a year’s worth of interviews with plan sponsors about what retirement advisors did well and where they could improve in developing new business.
By Joshua Dietch and Yaqub Ahmed
Believe it or not, a sale is a process. As such, there are discrete components that generally flow in a sequential order. At a high level, the process flow can be broken down into three parts: Generating a lead, managing the prospect, and closing new business.
Why is managing a sales process of paramount importance? Simply put, the absolute number of qualified leads represents a scarce resource. Consider that 88% of all DC plans have fewer than 100 participants and only 75% have more than 50, according to the 2010 Private Pension Plan Abstract of Form 5500 Annual Report. Thus, the majority of plans are quite small.
Furthermore, industry researchers suggest that fewer than 10% of sponsors will fire their record keeper and hire a new one in any given year. Lastly, upwards of 75% of plan sponsors already use an advisor.
From this one can conclude that the number of plans that one might want to serve are few and that most of them will already have an advisor relationship. Your challenge is to convince a plan sponsor that what you can offer is of greater value than what they, in all likelihood, are currently receiving.
These challenges are common to all advisors, but how do successful advisors overcome them? For the past year, Franklin Templeton has worked with Chatham Partners to interview plan sponsors and elicit feedback on what retirement advisors did well and where they could improve in developing new business.
From that research, we’ve identified six actions advisors can take to sell smarter and improve their chances of closing new business:
1. Successful advisors view new business development as a process. Don’t rely on luck. Having a disciplined and repeatable process is critical to bringing a prospect from the initial stage of interest to signing them as a client.
2. Referrals are the strongest endorsement. Prospects look for referrals. Build a strong network and turn clients into advocates for your services.
3. Position yourself as an expert. Plan sponsors most often seek out advisors for help overcoming challenges and addressing specific plan needs. Experience and expertise are critical differentiators. Accordingly, advisors should develop proof points — such as case studies and testimonials — that demonstrate how advisors’ services have helped others.
4. Personal fit is the most influential attribute in determining the success or failure of a bid. Foster close connections by carefully listening to plan sponsors and providing solutions that address their concerns.
5. Clearly describe what prospects can expect to experience as a client. Give prospects a road map of how they will benefit from your services over the course of the client relationship. Outline what milestones will be achieved and how success will be measured.
6. Don’t minimize the importance of the finals presentation. It's the concluding event to the sales process and affirms that an advisor has the necessary skills the client needs.
We’ll discuss the research at our Summit workshop, “What Do Plan Sponsors Want? How a Specialist Can Maximize Effectiveness in the Sales and Retention Process,” on Monday, March 4, 2013, at 8:00 a.m. And if you'd like to find out about participating in the research, contact your Franklin Templeton DCIO specialist or call (800) 530-2432.
