The wrong clients show you who they are… are you taking notice?

Posted by Jan25, 2016 Comments Comments Off
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I believe that your success as a broker depends a lot on picking which are the right prospects to work with and not wasting time on the wrong prospects. The right prospects/clients in my opinion are ones that value what you do, respect your advice and want to build a long term relationship.

Let’s assume that the average broker that reads this blog settles $40 million per year. If the average loan size is say $400k, the broker needs to convert approximately 8-9 clients per month. How many leads does the broker need to do this? If they have a 50% conversation rate, they will need approximately 20 leads per month.

How long does it take to convert a prospect? Let’s assume you spend (on average) 1 hour talking to the prospect prior to meeting them, 2 hours meeting and travel time, another 2-3 hours researching and presenting a solution, 1 hour signing them up, 4 or so hours on processing and following the application through to settlement. Let’s say you spend, on average, 11 hours per converted prospect – so a total of 100 hours per month. There are 160 working hours in each month – so what are you doing with the other 60 hours in the month?

Are you wasting it on the wrong prospects? I believe it should take (on average) no more than 30 minutes to work out if the prospect is the “right” one for you. This is your challenge: stop wasting time on prospects that are unlikely to turn into clients. Successful brokers do not waste time on the wrong prospects.

The “wrong” prospects/clients leave hints. Typically these hints come in the form of small “behaviours” that can be easily ignored or explained away – except that, in my experience, in almost every instance, these behaviours are never present in the “right” clients. Here are a few recent examples I’ve seen:

  • Wanting me to come and visit them at their home after I have explained that we see clients in the office. This shows that they value our service so little that it’s not even worth them getting off the couch. If you agree to the visit, all you do it validate their value assessment.
  • Excessive focus on interest rates – even after you have educated them that it’s not all about rates. If the conversation always leads back to rates, take the hint.
  • Reluctance to commit to the next step or provide information in advance. By the way, this is a good approach if you are unsure of the prospect. Get them to commit to a step before you provide your solution e.g. recently, before looking at restructuring a new prospects loans and providing advice (it was a large portfolio and messy = time consuming), we had them agree to us reviewing the performance of their investment properties to work out which ones to keep and which to sell. This step “tested” them to see if they were serious about valuing and acting upon our advice (and it was the best next step for them anyway). If they hadn’t have agreed then we would have a clear indication that they were not the “right” clients for us.

You should have a system for qualifying prospects. I’ll share mine in my next blog.

By the way, Andrew Krauksts has opened up his Facebook training last week. The MFAA & FBAA have approved 2 hours of CPD for this training and it won’t be available for at least another 6 months. Click here to access this training today at no cost.

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