The start of the new year is a good time to reevaluate our business development strategy and retool to expand on what has worked well in the past or make adjustments to improve on disappointing results. The primary challenge for many practices is universal: How to identify and get in front of new prospects.
While this topic would warrant a whole series of articles, the starting point is putting more emphasis on identifying the right employers and the right decision makers within those employers to target. Taking a few extra steps in this area can reap substantial rewards.
The Dual Contact Strategy
We’ve all heard the overused adage, “sales is a numbers game,” but put more succinctly, sales is really a science based on odds. Any step you can take that enhances your odds of getting in the door — say by 10% — is a step worth taking. For example, I’ve always been a strong proponent of sending a letter in advance of a cold call to “warm up” a prospect — a small yet effective step that most salespeople skip but one that adds credibility to your outreach and improves your odds.
Before starting your prospecting campaign, it’s ideal to identify at least two key decision maker contacts — for example, the president and the CFO. Remember the principle of sales being a science based on odds: If you prospect decision maker #1, and never make contact, you can’t assume that means there is no interest. A later attempt employing the same campaign to decision maker #2 essentially doubles your chances of forging a new relationship.
Cleaning Up the Contact Data
To reach the right person(s), you need the most accurate decision maker contact information you can find. Most retirement advisors have access to a Form 5500 database where they can download prospect lists with plan filing information, such as Judy Diamond, PensionPlanet or Larkspurdata.
Each database has its own added features that can be very useful, but focusing strictly on contact information, PensionPlanet has a Dun & Bradstreet tie-in that most often provides the name of the CEO or president at smaller employers and multiple key decision maker titles and contacts for larger enterprises.
This is important because over the years, external plan administrators and others (TPAs or advisors) have intentionally replaced the sponsor “Plan Administrator Contact” that you find on Form 5500 filings with their own contact personnel on the Form 5500. This may be the case with as many as 20% of all Form 5500 records. Other records simply might have out-of-date contact personnel.
Whatever Form 5500 source you use, here are two additional steps you can take:
1. If you have a supplemental source of intelligence like Hoovers, Dun & Bradstreet, etc., you can cross-reference against the Form 5500 data to verify contacts. This can be time consuming, and may also require visiting employer websites or making pre-prospecting calls to verify contacts. If you don’t have an associate with the time to help, you can outsource this task economically to a third-party prospect list research firm. Either way, most of your competitors won’t make this extra effort, so taking these extra steps can lead to greener prospecting pastures.
2. Make sure you keep track of when you have prospected a particular employer contact (#1) without result. This way you will know when to move on to prospect contact #2.
Deciding Which Decision Makers(s) to Contact
Thinking back to “Sales 101,” most of us were taught that when prospecting, always reach for the top first — the president or CEO of a company. In the real world of retirement plan sales, however, it’s often more complicated. Most employers with a plan with more than $2 million in assets under management have two decision makers, who I characterize as the “ultimate decision maker” and the “key influencer” responsible for the plan. Both can be important. Depending on employer size, you can waste a lot of time failing to reach the company president due to “gatekeepers” or simple lack of response — or the president/CEO may legitimately feel that your outreach doesn’t address his area of responsibility. Simply giving up without trying the “key influencer” can potentially cost you new clients.
Defining a “prospecting attempt” as a minimum of two contact efforts (i.e., a letter followed by two call attempts), here are some general guidelines to follow to navigate the decision maker hierarchy efficiently:
• Companies under 75 employees:
1st prospecting attempt: president /CEO/owner
2nd attempt: CFO or COO/partner (if no CFO exists)
• 75-200 employees:
1st prospecting attempt: CFO or COO (if no CFO or equivalent finance executive exists)
2nd attempt: president/CEO/owner
3rd attempt: HR generalist
• 200-400 employees:
1st prospecting attempt: CFO or equivalent finance executive
2nd attempt: dedicated benefits specialist (if available) or head of HR.
• 400+ employees:
CFO or dedicated benefits specialist
There are a lot of plan sponsors out there that need to bring more effective stewardship to their retirement plan. But you can’t help them if you can’t reach them and engage them. Starting with the right data can open more doors and help land more clients.
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