Jacques Werth stands conventional sales theory on its head. The veteran salesman, sales trainer and author (High Probability Selling, $19.95) says brokers should forget trying to find "interested" prospects and forget trying to convince a prospect to buy something from you. What you should really do, he says, is determine whether you and the prospect have a mutually acceptable basis for doing business. Werth, president of High Probability Sellin in Dresher, Pa., has taught this approach to salespeople in 64 industries, including brokerage. OWS asked him to explain his successful albeit unconventional strategies.
OWS: What's the difference between your high probability prospecting approach and traditional prospecting?
Werth: Using my approach, you are only looking for prospects who want to buy your type of product, not those you might interest in it. Since these prospects already want to buy, you don't have to convince them to make a purchase. For example, instead of trying to find people who might be interested in tax-free income, you should look for someone who wants to buy a muni bond.
OWS: What do you do next?
Werth: You start calling. Because your average call takes about 40 seconds, you can easily make 60 dails per hour. You'll probably reach about 20 percent of the people you dial. Approximately one out of 40 people you contact will want to buy something. Half will want to buy from you and half won't. That leaves about 1.25 percent of those you make an offer to, which translates into a new client for every six to nine hours of calling.
OWS: What should the broker say when calling?
Werth: The broker should use a prospecting offer of 45 words or less. Something like: "This is Joe Smith from XYZ Securities. My firm is offering an insured, tax-free municipal bond that pays the equivalent of 9 percent. It's highly rated and easily sold for cash when you need it. Is this something you want?" This offer always spells out who you are, which firm you're with, what you're selling, two features, NOT benefits, and a question about whether they want it or not.
OWS: Why talk about features, not benefits?
Werth: Because if the prospect can't automatically translate features into benefits in their own minds, they are not high probability prospects. If they want to buy the type of product you're offering, they'll say so.
||OWS: Suppose the prospect say she's not interested?
Werth: You say, "OK, goodbye" and call the next one on your list. You don't try to interest them in anything else, and you don't try to convince them to buy the bond. You seldom are able to convince anyone to buy anything, and you can go broke and get frustrated trying. So don't waste time when you're prospecting. Keep on calling the other names on the list. Then wait four weeks and call the same people again. Repeat the process a month later, but change the offer each time you call. It pays to call the same list over and over because some people need several weeks or months to make a buying decision. As long as the broker is respectful of a prospect's time and can accept their "no" answer, the person won't mind periodic callbacks. The impression you leave is that of a no-nonsense business person who listens to them, respects them and doesn't waste their time or yours.
OWS: If the prospect is neither interested nor disinterested, shouldn't the broker be trying to educate the client?
Werth: No. We're not in the education business. For reasons we don't understand, fewer than 30 percent of customers buy from salespeople who educate them. But they will buy from someone who offers them what they want and from someone whom they trust and respect. Those are the top two reasons prospects buy, and it takes a prospect about 20 minutes to determine whether or not they respect and trust you. That's the basis of a strong relationship with a customer, not the ability to schmooze. In fact, if you're a good schmoozer, people think you're just another salesman trying to sell them something and they won't trust you and won't buy from you. In essence, brokers should stop acting like brokers, most investors think of brokers as desperate salespeople.
OWS: Then how should brokers act?
Werth: Straighforward and professional. Being overly friendly is a turn-off to many people, and using a prospect's first name 15 times in a conversation to establish a bond is phony. A strong relationship will come naturally when you've asked enough questions and found out who the prospect really is and what they want. Anything less and it's the salesperson who gets ripped off. In other words, if the prospect isn't open and honest with us, we don't deal with him.
Reprinted from On Wall Street, May 2000. 1290 Avenue of the Americas, 36th Floor, New York, NY 10104, (212) 830-9683