Article 2 from Registered Representative
The following article was reprinted from an issue of Registered Representative.
A Blueprint For Warming Up Cold Leads
Successful cold callers know that there are different types of lists, some of them colder than others. They also know that some lists have characteristics that make them more responsive to cold callers than others. The scenario is played out over and over at brokerage houses across the country. A rookie rep is given a six-inch-high computer printout labeled “wealthy investors”. He’s been told by his manager, “There’s gold to be mined in that list.” So, the rookie calls steadily, dialing number after number and winds up being hung up on nine out of ten times. By the end of the day, he’s understandably ready to quit the business. Fortunately, prospecting for new business with cold-lead lists doesn’t have to be that gruesome. With some simple techniques, you can warm up even the coldest list – making people actually eager to speak to you.
Choosing A List
The most important factor to consider when choosing a prospect list for cold calling is your own sales objective. If you’re trying to open retirement accounts, you wouldn’t go to a list of commodity investors. Likewise, you probably won’t do well talking to retirees about opening speculative options accounts. Cold calling with the wrong list invariably annoys prospects, almost inviting them to hang up on you. So, your first step is to define what kind of product or service you intend to offer. If you are simply trying to develop new clients, then you want use a broad list. But, if you have a specific product in mind, you should select a more targeted list. This may sound tricky, but it’s not – the art of list management has become so precise that you can find a specific list to cover virtually any target product. The most common sources for leads are list brokers. These services will sell you demographically precise lists of names – either on 3 x 5 cards or on computer disks that you can load into a prospecting program – at cost of between 4 cents and 12 cents a name, depending on the quality of the lists and quantity. Here’s a list of some of the better known list brokers: InvestorLeads.com, Diehl Marketing Service, Bill Nichols, RFC Marketing, Dave Zussman.
Keys to Selecting Quality Lists
For best results, you should always “qualify” your lists before buying them – in other words, define the quality of the names on the list. There are six primary criteria for qualifying lists:
- Type of name – Lists are usually divided into two major categories, based on the type of person you will find on them. These categories are business names and consumer names. Business lists include professional titles and workplace addresses and phone numbers. Though many people tend to opt for business names, I have generally found results are better if you call consumer names.
- Net Worth – Ask the list provider the approximate net worth of the individuals on the list (remember these will be averages, not guarantees). In my experience, when prospecting for affluent clients, it’s best to use a list with minimum average net worth of $300,000 to $500,000.
- Recency (newness) of the names – On average, people move every two years according to the Census Bureau. That means your chances of having an active list are very slim if it is more than two years old. So you’ll need to find out how recent the list is.
- Reachability – This number defines the percentage of people on your mailing list who will have listed telephone numbers. The rule of thumb is that most consumer lists carry about a 70% reachability rate, while philanthropic lists (which include such people as contributors to political campaigns and donors to environmental causes) may have reachability rate of just 10% to 20%.
- Deliverability – This is similar to recency in that it defines the latest contact with the named individual. Obviously, the most recent names are the best since they have not been hammered in any way.
- Responsiveness – This is without question the most important criteria. It is far better to go to a list of people who are proven responders to a product or service similar to yours. Therefore, lists of known OTC Stock investors, commodity investors etc. probably represents your best choices for prospecting purposes.