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How I Failed My Way Into This Business

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eggward View Drop Down
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    Posted: Aug/18/2010 at 3:56pm

Would you have kept going if your first 6 months in this business resulted in cumulative production of $8k? How about $25k after 10 months? I kept going and here is my story of survival.

I posted this in another thread:

My starting attitude was similar to yours except I had little/no money and a wife that was not working full-time. Let's just say I was highly motivated. My first 8 months were a disaster. I started tracking any/all contacts and quickly realized quality of contacts wasn't the problem; I needed a much higher quantity. I spent a few years prospecting, contacted 30,000 people (yes, I tracked every one), and now a few hundred are my clients

Others encouraged me to elaborate, so here are the details broken into multiple posts.

My first six months I prospected two ways: 1) seminars, and 2) warm calling.

Seminars

Others in my area were doing seminars but no one was targeting women, so that’s what I did. I put ads in the local paper (this was back during the Clinton administration when ads were both reasonably priced and reasonably effective; not so much today). I could usually get a dozen or so ladies in the room. Half were professional lunchers and I would turn 2-3 of the others into clients. Not the best closing ratio, but it was consistent.

Warm Calling

I was fortunate to live in a part of the country were many people were moving to. So I subscribed to a list that would mail me once a week everyone who bought a home in certain zip codes, their name, address, phone number, and home price. I mailed a letter (I’ll post sample later) to everyone above a certain home-price cutoff, waited a week, and then called during the evenings to follow up. I didn’t have the DNC list to worry about. Many people were new to town and wanted someone local and/or had a rollover. The clients weren’t huge in size but it was consistent.

After 6-8 months I felt like things were working because I was opening new accounts, but somehow it wasn’t translating into production. A friend that started a few months before me dropped out of the business but it honestly never occurred to me to quit….but it was obvious it wasn’t working for me just yet.



Edited by eggward - Aug/27/2010 at 7:22am
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Here's the body of the new homeowner letter:
 
Congratulations on your new home!  If you are new to Eggville, you will find this a wonderful place to live.  The reason I'm writing today is simply to welcome you and introduce myself.  Most of my clients are people like you who never heard of me until receiving one of these letters.
 
Don't worry, I won't call with any annoying soliciatation.  I prefer meeting face-to-face so I can focus on solving problems and meeting goals such as how to get the kids through college, or how to prepare for a comfortable retirement.   However, I will call you soon just to make sure you received this and put a friendly voice with it.
 
I hope that you will hold on to my card and feel welcome to call me.  I would enjoy meeting you at my office or your home.
 
Sincerely,
Eggward
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Post Options Post Options   Thanks (0) Thanks(0)   Quote eggward Quote  Post ReplyReply Direct Link To This Post Posted: Aug/18/2010 at 4:09pm

After 6 months or so when it was obvious that my production wasn’t increasing, the engineer in me kicked in. I created an Excel spreadsheet and started tracking everything I could about what I was doing and what were the results:

-hours worked

-number new prospects

-number follow up contacts

-number contacts with clients

-number meetings held

-assets gathered

-accounts opened

-tickets dropped

Etc.

I also created a spreadsheet that let me track my activities each week. At the end of each month, I keyed them all into the tracking spreadsheet and went backwards as best I could to see what I had been doing. It took some time, but less than you are thinking right now. I’ve been creating spreadsheets since the time I was storing them on 5 ¼ inch floppy disks…I can do it pretty quickly.

After getting a couple months of data, it didn’t take long to see what was happening. I had a certain close ratio for the seminars and a certain close ratio for the warm calling. Neither was great, but it was good and pretty consistent. I was getting clients….I just wasn’t getting ENOUGH clients. My analysis told me that if I started stuffing the front of the pipeline with more people then I would get more clients. It was just that simple….but there were only so many homes being sold in my area, and I was already spending money I didn’t have on newspaper ads for seminars.

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Post Options Post Options   Thanks (0) Thanks(0)   Quote eggward Quote  Post ReplyReply Direct Link To This Post Posted: Aug/18/2010 at 4:17pm

I settled on two ways to get more contacts.

More Warm Calling

I used the same technique, but chose zip codes that were outside of the city. This didn’t work so well. First, I ended up driving to a lot of homes because people there didn’t want to drive into the city to see me at my office. I wasted a lot of time in my car. Also, the accounts I got this way were typically half or less what I got through my regular warm calling. I was still tracking everything I did and my analysis told me to stop doing this after about 6 months of trying. I still warm called in the city, but not in the outskirts.

Cold Calling

Good, old fashioned cold calling. I had a wholesaler get me a list of everyone in certain zip codes, house over a certain value, age 50+ and just started dialing. I don’t remember exactly what I said but it was basically to introduce myself and ask if I could mail some introductory information to them. Back then, most people were polite and would simply say yes or no. For the ones that said yes, I knew the information was pretty irrelevant. I simply wanted my business card in their hands and a reason to call them back. I mailed the info and called them back a week later to make sure they had it and ask as many open ended questions as I could get away with. I was still tracking everything (of course!) and I realized I had a set close rate for cold calling, but with an interesting twist. My close ratio for cold calling was lower than warm calling….but I got larger clients out of it. The moment I realized this, I knew I was going to make it in this business.

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Post Options Post Options   Thanks (1) Thanks(1)   Quote eggward Quote  Post ReplyReply Direct Link To This Post Posted: Aug/18/2010 at 4:26pm

I altered my weekly tracking sheet to have several boxes with noting but numbers in them. I wanted to make sure I set prospecting goals, achieved them, and tracked progress to make sure it was working the way I expected.

Box one had rows numbering 1 to 20, 21-40, and 41-60. It was titled New Homeowners

Box one had rows numbering 1 to 20, 21-40, 41-60, 61-80 and 81-100. It was titled Cold Calling

I had similar boxes for:

-Prospects

-Clients

-Meetings

-New Accounts

And some blank areas to write in assets gathered, etc.

 
When I made a Cold Calling contact, I'd cross off a number.  Same for all the other boxes.  It was an easy and effective way to track it and at a glance, see how the week was going.
 
My goal was to speak with 100 new contacts every week, while still following up with existing prospects and clients. 100 new contacts. Every week. No excuses. I took off one week during the summer and the last two weeks of December. Other than that, 100 per week.

During the days, I cold called from 10-12 and 1-3. I called clients and prospects before and after that. The only exceptions to this were when I was in a meeting with a client or prospect.

During the evenings I called the new homeowners from 7-8:50pm.

I called on Saturdays until I hit 100 contacts, or for a minimum of 2 hours.

I called like that for about 6 years.

I stopped tracking the total number of new contacts a few years ago. My last count had it at 30,361.



Edited by eggward - Aug/18/2010 at 4:47pm
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Post Options Post Options   Thanks (1) Thanks(1)   Quote workinhard Quote  Post ReplyReply Direct Link To This Post Posted: Aug/18/2010 at 4:33pm
That's pretty awesome man.  thanks for the post... I've got me some motivation to hit the phones again tonight!
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Post Options Post Options   Thanks (0) Thanks(0)   Quote Ron 14 Quote  Post ReplyReply Direct Link To This Post Posted: Aug/18/2010 at 4:37pm
Unreal. What is your situation now? At a firm, Indy?
Ronmerica - Progressive government movement. Everything goes. Everything is great. Live it. Love it. Embrace it. Teabag it.
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Post Options Post Options   Thanks (1) Thanks(1)   Quote eggward Quote  Post ReplyReply Direct Link To This Post Posted: Aug/18/2010 at 4:41pm

What I learned, in random order - and I reserve the right to add to this list.

I still use a weekly tracking sheet. If I didn’t, I wouldn’t make as many client calls as I should. It also doubles as a to-do list where I write phone numbers and people when I need to return calls.

Nick Murray writes about knowing your N….and I agree. If you are new in the business, read The Excellent Investment Advisor by Nick Murray. The guy is arrogant, but pay attention to N and knowing how many people you should let on your ark.

Most people are nice. Treat them with respect and they will do the same to you. You can build a lot of credibility with prospects by doing exactly what you say. When a prospect asked me to call them back in a month, I did it….and started the call by reminding them that they asked me to call in a month, and that a month had passed. How many times does someone do what they say they will do? Not very often these days. If you cannot do something as simple as calling back in a month, why should they trust you with their life savings? Be politely persistent and you’ll get prospects attention and respect.

It really doesn’t matter what you say in the first phone call, or what the letter says. What matters is that you pick up the phone (or knock on the door….) and dial. Repeat over and over and over again. Tracking my activities pointed out that the quantity of contacts was the most important thing. Find two ways to prospect that work for you and do them. Who cares what the guy in the office next to you does? Do what works for you.

The people you run across while prospecting that are not nice are life’s little treat to you. Once you train yourself to not get angry, you start to see these people in a comical manner. I had fun pushing one guy’s buttons by egging him on when he threatened to call the mayor on me. One lady was demanding I come to her home at 8pm because it was convenient for her and she was going to be the most important person at the meeting; I very politely stopped her and told her that I work with my clients on the basis of trust and mutual respect…and since we would not have that we had no reason to meet. She was so shocked she didn’t know what to say but I laughed at her stammering. One guy was nice but had a porno film going on the background and the volume turned way up….and it was a rather climactic scene in the movie. Don’t let the jerks bother you - use them for entertainment.

If you are cold calling, you can use the same lists over and over....just wait about 6 months before recycling the list.  I got clients from people who told me "no" 2, 3 or even 5 times before saying yes.
 
This is a great business once you make it. We are fortunate to be able to do something we like, help others, earn a good income and have flexible schedules. I hope my mini-novel helps, or at least entertains.


Edited by eggward - Aug/18/2010 at 6:17pm
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Post Options Post Options   Thanks (1) Thanks(1)   Quote eggward Quote  Post ReplyReply Direct Link To This Post Posted: Aug/18/2010 at 4:42pm
One other thing I learned: Type long posts in Microsoft Word, then copy & paste them onto this site.  It really sucks when you type a page full of text only to have the website crap out on you when you hit the Post Reply button!

Edited by eggward - Aug/18/2010 at 5:46pm
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Post Options Post Options   Thanks (0) Thanks(0)   Quote workinhard Quote  Post ReplyReply Direct Link To This Post Posted: Aug/18/2010 at 5:08pm
One thing I'd like to add (if you don't mind... if you do let me know and I'll delete).  This is a reitteration of another poster, but I can't remember who.
 
If you call (cold or warm) looking to take ANY account you can get your hands on, then you will get small accounts.  Huge numbers of households, not very large average balances.
 
Three weeks ago a guy in my firm told me not to turn that stuff away, but don't go looking for it.  He said I should hunt the bigger accounts, and although they might not come as often, they are more than worth the time spent.  In the past two weeks, out of 68 contacts, I have two meetings set with prospects north of $1M investible.  That does not include folks I'll drip on.
 
If you look hard enough, you can find anything... might as well look for big money right?
 
Thanks for all the insight egg.
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Post Options Post Options   Thanks (0) Thanks(0)   Quote Lawrence Quote  Post ReplyReply Direct Link To This Post Posted: Aug/18/2010 at 5:09pm
But, if you drink alot, you may post the same thing more than once....

I know somebody who did that.


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Post Options Post Options   Thanks (0) Thanks(0)   Quote eggward Quote  Post ReplyReply Direct Link To This Post Posted: Aug/18/2010 at 5:19pm
Don't mind additions at all.  My first 6 months I racked up a lot of small accounts.  When I started tracking stuff, that's when I set my minimum to be my average account size and really focused on working with nice people.  It was an easy way to take accounts but know I was still growing my business.  Definately look for the big money, but I'd take medium money, too. 
 
One other thing I did was when I found someone that was a nice person but a small prospect that had a large 401k at a current employer, I'd take them as a client and insist they DCA.  This way their account grew which kept them happy, I got a little $, and whenver they left their job I was a lock for the rollover.  I used that strategy dozens of times. 
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Post Options Post Options   Thanks (0) Thanks(0)   Quote workinhard Quote  Post ReplyReply Direct Link To This Post Posted: Aug/18/2010 at 5:21pm
I should have rephrased... I don't mean set a huge minimum off the bat... I just mean don't "chase" 40k rollovers because they can end up being a headache...
 
and I totally agree about working with nice people, and future potential for rollovers.
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Post Options Post Options   Thanks (0) Thanks(0)   Quote SometimesNowhere Quote  Post ReplyReply Direct Link To This Post Posted: Aug/18/2010 at 5:33pm
One of the best threads in a while. Nice work, egg.
I sort of give a fuck.
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Post Options Post Options   Thanks (0) Thanks(0)   Quote Guests Quote  Post ReplyReply Direct Link To This Post Posted: Aug/18/2010 at 9:51pm
Nominate for "the Lobby"
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Post Options Post Options   Thanks (0) Thanks(0)   Quote Ron 14 Quote  Post ReplyReply Direct Link To This Post Posted: Aug/18/2010 at 9:53pm

Absolutely

Ronmerica - Progressive government movement. Everything goes. Everything is great. Live it. Love it. Embrace it. Teabag it.
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Post Options Post Options   Thanks (0) Thanks(0)   Quote knuk Quote  Post ReplyReply Direct Link To This Post Posted: Aug/18/2010 at 10:07pm
Some things never change...this is and always will be a contact game.
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Post Options Post Options   Thanks (0) Thanks(0)   Quote Debolt Quote  Post ReplyReply Direct Link To This Post Posted: Aug/18/2010 at 10:42pm
I would remove all but Eggs posts first because they really don't provide much value but this is definitely Lobby material and a perfect example of what AH can offer...
Check the charts: October 3, 1974 = March 9, 2009   Quit making excuses and sell something!!

Obstacles are those frightful things you see when you take your eyes off your goal. - Henry Ford
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Post Options Post Options   Thanks (0) Thanks(0)   Quote Wet_Blanket Quote  Post ReplyReply Direct Link To This Post Posted: Aug/18/2010 at 10:50pm
Already done.
When money is speech, speech isn't free.
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Post Options Post Options   Thanks (0) Thanks(0)   Quote Debolt Quote  Post ReplyReply Direct Link To This Post Posted: Aug/18/2010 at 10:51pm
oh dumb me... well delete my posts here then. no reason for them to be here...
Check the charts: October 3, 1974 = March 9, 2009   Quit making excuses and sell something!!

Obstacles are those frightful things you see when you take your eyes off your goal. - Henry Ford
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