Advisor Perspectives welcomes guest contributions. The views presented here do not necessarily represent those of Advisor Perspectives.
Your client bought a financial plan. They have invested $1.2 million using your recommendation. The client also needs a life insurance policy. One option is to move the term product to permanent. You contact the client asking for an appointment and he puts you off, saying that he will think about it.
A 45-year-old business owner just started a 401k plan with you. She is a business owner and the single mother of two young kids. You have tried to meet to talk about disability insurance, but no luck. She is always too busy.
A late 50-year-old couple have been your clients for a decade. They are coming up to retirement age and really need long-term care insurance. You have pitched it before without luck. Don’t they know it’s for their own good? A LTC need is more than 50% likely for those over 65 and will be too costly if they have to pay out of pocket. They just don’t know what is good for them.
The 72% rule
The good news is that your existing clients are easier to sell than any new relationship. In fact, you probably did a great job of engaging them in the first place. Research has shown that your chances of closing business with an existing client is 72%. Most of the income you make from any one client will be ensuing sales, not from the initial solution.
After a few years many clients will say, “Whatever you think I should do, is okay with me.” But that assumes you have been in constant contact with them on the phone or face-to-face every three months. If you call to pitch a product like 99% of advisors do, you will get a stall. But if you up-sell effectively, your closing ratio will increase to at least 72%.
Make the first sale a relationship builder, not a quota maker
Many advisors tell me that if they can’t gain all of a prospect’s assets, they want none. They don’t realize that trust starts at the beginning of a relationship. But not all of it. It is fully developed in time. The client is looking for you to keep your word. They are looking for proof that the walk equals the talk. If you can do that, you will gain all of their assets over the long term and sell every appropriate solution.
As I have written in past articles, your clients want three things:
- A functional understanding of what they bought;
- Confidence that you are in control all the time; and
- Frequency of relationship.
By far the most important of these three is frequency of contact. The de facto rule is talking to them every three months. But during a crisis like COVID, contact should be monthly.
If you keep in contact at least every three months, you will inoculate clients from entertaining conversations with other advisors. Even if the client experienced a loss, it is unlikely they will leave you for another.
Keeping in contact every three months also prepares an up-sell. Many years ago, one of my coaching clients, William, took over part of my retirement plan. I told him how he would lose my business. By not calling every three months. He said that since we were coaching weekly, that wouldn’t be a problem. Eventually William left coaching and failed the three-month contact test. He called after 18 months and pitched a 10% trust deed partnership. I reminded him of the three-month call promise he made. I rejected his pitch. I promised to entertain the partnership idea if he called in three months. After another year, he called with another investment idea. I reminded him of the three-month call promise and promptly fired him. Not only was the relationship strained, but it was an obvious attempt to make money at the expense of a client.
How to up-sell
Keep in contact with your A and B clients every three months. During those calls, be prepared with needs that you discovered during the initial probing phase, but don’t pitch.
Five-step bridge
The next step after you catch up on whatever happened since your last call along with updating them on the market and economy is to up-sell. The perfect tool for this is the five step bridge.
Introductory sentence
I am watching out for you every day. Do you have any other assets that you might be concerned about? No? The last time we spoke, you were concerned about what would happen to your retirement savings if you had a long-term medical issue. What plan have you made so far to prevent this from happening?
Get three needs
As I have previously written, discovering one need gets you a 35% chance of making a sale. Two needs, 56%. Listening for three needs gets you a 93% chance of producing new business. Possibly they will have done nothing to prepare for a long-term care event.
Your response is to hurt and rescue
My concern, Mr. Client, is that a long-term care expense on average will cost $6,000 per month and last six to nine months. If that happens, it will drain $54,000 out of your retirement. Does that concern you? What plans have you made to keep that from happening? None?”
Recap
So, if heard you correctly, you are concerned about a long-term medical event draining your retirement savings. You also would like to prevent that from happening. Did I get that right?
Trial close
If we could take a look at a way to prevent the expense of long-term medical expense from depleting your retirement, would that help?
The next step is to book a follow-up appointment presenting perhaps an asset-based long-term care policy.
This up-sell technique will be successful at least 72% of the time. Only use it in a fiduciary capacity. But since you know what they need and what is best for the client, it’s important that they follow your recommendations.
Knowing how to up-sell is one of the most important skills you can possess. Never try to sell everything at once. With these skills, you will eventually gain all of their assets and address all of their needs as you follow up.
If you call me at 714-368-3650 and chat for 10 minutes, I will send you a video on how to Up-Sell.
Dr. Kerry Johnson, MBA, Ph.D., is “America’s Business Psychologist”. He is the best-selling author of 14 books and a frequent speaker at financial conferences around the world. Peak Performance Coaching, his one on one coaching program, promises to increase your business by 80% in 8 weeks. To see if you are a candidate for this fast track system, click on www.KerryJohnson.com/coaching and take a free evaluation test. You will learn about your strengths and what is holding you back. Or call, 714-368-3650 for more information.
Read more articles by Kerry Johnson
Advisor Perspectives welcomes guest contributions. The views presented here do not necessarily represent those of Advisor Perspectives.
