Erin Botsford: Building a financial services business that grows itself

The following is an excerpt from “Seven Figure Firm: How to Build a Financial Services Business that Grows Itself” by Erin Botsford (Greenleaf Book Group Press, 2017). Ms. Botsford, a Barron’s Top 100 adviser, is also the author of “The Big Retirement Risk: Running Out of Money Before You Run Out of Time” (Greenleaf Book Group Press, 2012).

Without clients to serve, you have no business. The only way to build a business is to get butts in seats! To do this you have to prospect and/or market. The bottom line is you have to identify your target market, locate potential customers in your target market, find ways to attract or get in front of them, and then effectively engage with them and convince them to become your clients. This is the most difficult and the most important part of any business. The extent you can master this area of the business is the extent to which you will be successful and your business will grow.

There are many ways of prospecting, and the good news is, they all work. All you have to do is to commit to several methods that you will do simultaneously and work those methods for at least 18 months before you give up. You cannot decide to try something to see if it will work. It will work; you just have to give it sufficient time and effort. Certainly, along the way you want to review what is working the best and what is not working as well as you had hoped and modify your plan accordingly.

LEAVE FRIENDS OUT, AT FIRST

Despite the fact that I was taught in my initial training to focus my efforts on building a list of all of my friends and family members as well as people in my direct circle of influence, I made it my policy not to do business with friends, family or neighbors.

Here were my reasons:

• I didn’t know anyone in the town, so I didn’t have an immediate circle of influence.

• I knew I wasn’t credible to friends and family. They knew I was new to the business and I’m sure they wanted me to “practice” on other people. I, too, knew I was new to the business and I didn’t want to “practice” on my family and friends.

• But more important than all of this, when I announced that I had a policy where I wouldn’t do business with friends, family or neighbors, they suddenly rallied around me and wanted to help me.

(More: The appeal and pitfalls of holding unconventional assets in retirement accounts)

Eventually I ended up doing business with many, many friends and family members, but it took years before they looked at me and realized I was going to be in the business for a while. They surmised I had probably learned a few things along the way, and then they came to me, not the other way around.

Instead, I did meet with friends, family members and neighbors and asked them to introduce me to their contacts. Knowing my policy, they bent over backward to help introduce me to potential prospects.

4 Prospecting Methods

• Drive-by shootings

• Out-to-lunch bunch

• Seminars

• Speaking to clubs and organizations

Drive-by shootings. I know the title is horrible, but I would be disingenuous if I didn’t tell you what I called it at the time. My friend/mentor Hal and I decided to challenge each other with this prospecting method. Three mornings a week, we’d leave our houses early and stop by small businesses. The object of the game was to get there between 7 a.m. and 8 a.m., before the receptionist or gatekeeper got there. We would offer to bring in pizza during lunch and give their employees a financial seminar. The business owner would frequently invite us back for a cup of coffee to discuss the economy, the markets, etc. It was a good way to get to know new people in town and we generally found small-business owners very receptive to our unannounced visits.

Out-to-lunch bunch. This prospecting method will always be my favorite. In fact, I continue to do it today. When I first started, I knew no one in town, so I made a trip to the local Chamber of Commerce. The young woman behind the counter was very helpful and very nice. I will call her Jane. I asked Jane to lunch and she agreed. We met the next week and I explained to her that I was new in town and I didn’t know anyone. I asked her about things like where she got her hair cut and what she and her husband did for fun. In fact, I employed a very important technique I had learned from a good friend. The technique is simply this: compliment and ask questions. We all know people like to talk about themselves, so why not let them? I love learning about people, so it was a great way to learn about them.

BE A GOOD SCHMOOZER

I kept the focus entirely on Jane. If she asked about me, I would answer only the question she asked but then immediately went back to her. I wanted to know all about her job, how long she’d been there, what she liked best, etc. At the end of the lunch (which I bought), I said, “Jane, this has been so much fun for me. If you were me and you wanted to meet all of the movers and shakers in Panama City, who would you meet with?” Without giving it any thought, she gave me two or three names and their accompanying phone numbers. I asked if it was OK to say she had referred me.

“Of course,” she said.

When I got back to the office, I immediately got on the phone and called each of the three people, and said, “Joe, I just had lunch with your friend, Jane Wynn, and she said you are someone I need to meet. Could I buy you lunch next week?” In at least 90% of the cases, the answer was yes. I then proceeded to write Jane a handwritten note, and here’s what I said:

“Jane, it was a pleasure having lunch with you today. Thank you so much for taking time out of your busy schedule to meet with me. I learned so much about you and the city. If I can ever do anything to help you in the way of financial planning, please don’t hesitate to give me a call. If you don’t mind, I will keep you on my mailing list and make sure you get invited to my upcoming seminars. I think you’d enjoy learning about the financial markets from my point of view. ”

I would include my business card and her name went on my seminar invite list.

From that point forward, I had lunch meetings just like this several days a week for years and years and years. I built a very impressive list of people, many of whom eventually became my clients. It was probably the most fun and certainly one of the easiest methods of prospecting. It was all focused on them.

Seminars — learning to fill a room. Shortly after I started, I went to my manager and told him I wanted to start giving investment seminars, either in the evenings or during the day at public libraries. In my naiveté, I assumed my manager would pay for ads in the local newspaper and hundreds of people would show up. Boy, was I wrong!

When I announced my plans, my manager made me this deal: I had to use my own efforts to bring in 15 confirmed bodies at two seminars a month, without using a newspaper ad. If I was successful in doing that for six months, he would allow me to place an ad in the local newspaper at my own expense. Wow, what a huge disappointment that was for me. That was 30 people a month I had to convince to show up to one of two events. Because I knew no one in town, it seemed like an insurmountable task.

FLIERS AND FOOTWORK

But I made up fliers, had them compliance-approved and started mailing them out to everyone on the small list I had compiled. I was very disciplined about calling each person on the mailing list exactly three days later, asking if they had received my flier and inquiring whether they were going to come to my seminar. It turned out almost none of them had any recollection of receiving my flier, so I struck up a conversation with them on the phone and just invited them to the seminar. If they didn’t commit to the next seminar, I at least got them to be polite and consider coming to a future seminar. I figured I needed to get 25-30 people to say yes the night before in order to get my 15.

Whenever possible, I tried to get the follow-up appointment scheduled the night of the seminar. Then the next day I called all of the “no shows” and reminded them about the seminar they had missed the night before. I would let them know when the next seminar would be and ask them to attend. Then I would call all of the people who attended and this was my script: “Hi, this is Erin Botsford and I’m just calling to say ‘thank you’ for coming to last night’s seminar.” And then I shut up. I learned the next person who spoke “lost.” If they spoke next, I seemed to get the appointment. If I got nervous and spoke to break the silence, I got nothing. That was a valuable lesson for me.

VALUABLE LESSONS

I learned these valuable lessons from giving seminars:

• Don’t rely on newspaper or radio ads. Figure out a way to fill a room with other methods. That might be a direct mail campaign or a telemarketer.

• Giving a seminar is an art. You must first “disturb” the prospects about what they are currently doing. If you don’t “disturb” them, there is no incentive for them to change.

• There needs to be a call to action at the end.

• You need to have an assistant or someone there to book appointments for you.

• You must contact every person who attended within 24 hours of the seminar. First call the no-shows early in the morning and then call the others. Don’t leave the office until everyone who attended has been called and asked for an appointment.

•​ The margin of returns drops off dramatically after 48 hours. If you have not scheduled an appointment before then, it’s not going to happen.

• The seminar is just the beginning. Advisers often forget the purpose of the seminar and think holding the seminar is the goal. They often present the seminar and are so exhausted by all of the work it took to get people to the event that they forget the seminar is just the first step. If they don’t do the immediate follow-up, it was all for naught.

• Length of seminar. My personal experience tells me a one-time seminar that lasts less than two hours is plenty. I have always said a seminar is purely a “tap dance” for credibility. Generally, the people who attend will decide in the first five to 10 minutes whether they are going to do business with you.

• Go where the money is. In a town where the average per capita income is $9,000 per year, I decided to find out where the money was and go there. It turned out the only money in town was in the hands of “snowbirds” who came to winter in Panama City. So I gave daytime seminars at the public library and I prayed each time for rain! (If it rained, the husbands would not play golf; instead, they would come to my seminars.)

Speaking to clubs and organizations. In addition to doing seminars, I made myself available as a speaker to local clubs and organizations. I went to the Chamber of Commerce and got a list of all of the clubs and organizations in a 25-mile radius from my office. I made up fliers, had them compliance-approved and sent them out to the program chair of each organization. I learned a couple of things doing this:

1. Be sure you catch someone who is in charge of booking speakers for that organization. You should send the same flier out about every other month, because chances are, it will either be ignored or forwarded to the appropriate person.

2. At the beginning of the program chair’s term, they are scrambling to find speakers, so the closer you can time your solicitation to their new position the better.

3. Be sure to highlight that you are “available on short notice.”

4. Know your audience. It can be embarrassing to speak on a topic that is controversial due to the tenets of that particular club. To illustrate this point, I was invited last minute to a club called the Exchange Club. I had no idea what they stood for. About five minutes before I was to speak, I asked my host what the Exchange Club was all about and he told me they believed in “buying American.”

DO YOUR HOMEWORK

You have no idea how far my face dropped, as my topic and all of my props were about “global investing.”

In about five minutes, I figured out a way to turn my topic into something palatable to this group, but my terror could have been alleviated if I had done a little bit of homework. This was in an era long before Google searches and internet access, so I will cut myself some slack!