A few years back I was asked to consult to a large financial services firm in Atlanta on how to get in the door of decision makers and overcome objections, two major areas that their reps were having trouble with, holding them back from hitting their goals. Mind you, this was not just a problem for some of the new brokers. This was an issue for close to 80% of the reps, and so I sat down with all of them and did an evaluation. Sure enough, they were all guilty of what I called “The Pack Mentality Syndrome” and if they were to become as successful as they wanted to become individually and as a company, they needed to separate from the pack. Let me define below.
If you are familiar with the 80/20 Rule it states that 80% of your revenue or potential revenue will come from only 20% of your client base, and that the converse is true, 20% of your revenue will be made up by close to 80% of your clients. I think we all know this to be true to some extent, that some of our more unprofitable clients take up most of our time.
After explaining this to the reps, I told them that we needed to split their prospects into three classes, A,B,C, which are defined in the accompanying chart:
|“A Prospect”||This prospect will account for, or COULD account for, 80% of our revenue or potential revenue. This is our dream client, the one who has the money to spend and the sophistication to spend it. They do business with OTHER A clients and are not only a valuable source of income to you, but a major referral base.|
|“B Prospect”||This prospect will account for 15%of our revenue and for most of the salespeople in the world, is considered our “bread and butter” client. Most if not all salespeople gravitate to this type of client because they are easy to get through to, easy to talk to and there is an abundance of them, though they usually have budgetary issues.|
||This prospect will account for no more than 5%of our revenue but in most cases will take up to 95% of our time! A major problem for financial advisors, real estate and insurance agents. They have the least money but want the most attention. We have all dealt with them have we not? Enough said.|
Disproportionate Time Management
Now, taking a look at these classes of prospects, it would seem to make sense that you would devote 100% of your time to prospect A and avoid B and C all together, right? Absolutely! But the problem with 95% of the entrepreneurs out there today (regardless of industry) is that they focus 100% of their prospecting time evenly among ALL three classes of prospects. They are following the “numbers” theory and hoping that if they pass out enough cards or see enough people, they will get business. Yes, in theory that is correct. So why not devote 100% of your time passing out as many business cards as you can, trying to set as many appointments as you can with prospect A? Make sense?
Look at it this way; if you are passing out cards or calling just anyone, who do you think will be the one that will be most receptive and take up most of you time? The one that will get you the most excited? Prospect C and in some cases B, because they are easier to get through too, have less resistance in the form of receptionists, gatekeepers, etc., and thus will listen more intently. Will they buy? Maybe, but most likely not. Will it be a battle? Absolutely, and for what? A small portion of business that will give you more headache than anything else.
You need to sit down immediately and jot down exactly who your “A Prospects” are, regardless of if they are already with your competitor and doing business elsewhere. Who cares! You are entitled to their business just as much as anyone else, and all you need to do is go out there and get it. Make a list of EVERY potential “A Client” in your industry, your “dream” client list so to speak, complete with phone number, fax number and who it is that makes the decision. I will show you later on how to get in the door of these prospects, but for now all we want is your dream client list. If it takes a full day or a full two days, do it, because this will not only make you more money, but save an immense amount of time in the long run.