You can teach an old dog new tricks

The following is based on one of The Covenant Group’s clients. All of the names and telling details have been changed.

When I first met Richard Yates he had already been a fixture in the financial services industry for 36 years. He’d gotten his start in 1962 at the age of twenty-five and had never looked back. After working hard to get his fledgling business off the ground, as an advisor with a major Canadian insurer, Richard had settled into a comfortable pattern of working that had been very profitable for him over the past three decades. 

Unfortunately, Richard, now 61 years old, was haunted by a growing personal dissatisfaction with his production and was frustrated in his attempts to grow his business beyond a certain level.

When I sat down with Richard for the first time he told me that he been a remarkably steady producer for most of his career, generating at least $100,000 of revenue every year. However, he had never, in all those years of work, been able to bring in more than $150,000 in any given year. No matter what he tried or how hard he worked, it seemed that he was stuck forever at the same level of production. He led a comfortable life. But, he felt that he had, in some way, failed to meet a challenge that his business presented. He desperately wanted to break through his revenue ceiling before he retired, and that was why he had come to see me.

Richard’s dilemma was one faced by many of my clients when they first come to see me. I knew there were many potential reasons for stalling out at a given revenue limit: the lack of delegation skills, a poor system for obtaining introductions, a limited vision of which client needs the advisor could meet, etc. To pinpoint Richard’s exact problem, I needed to understand more about his business.

Richard told me that he grew up believing in the power of a strong work ethic. His father had owned a farm just outside of Winnipeg and it was on that farm that many aspects of Richard’s personality were formed. Through the harsh winters, and occasional drought blighted summers of his youth, Richard had worked alongside his dad, tending the farm and helping to keep the family afloat financially. The work was physically taxing and the stress that followed a year with a poor harvest was mentally draining. But working with his father from sun-up to sun-down, often seven days a week, Richard had come to understand that almost any problem could be solved by determined effort and a willingness to bull your way through, even when you didn’t feel like it. As his father had told him: “I may not like half the things I do around the farm, but I like the lifestyle we have and so I make sacrifices. That’s true of most things in life.”

Richard had taken that advice to heart, and four decades later it still informed his approach to financial services. Richard was a ‘Doer.’ He thrived on long hours, and packed as many sales meetings as he could into every week, working to a schedule that would have crippled many advisors half his age. As well, Richard had retained his father’s practical approach to finances which helped him when it came to providing solutions for his clients but was holding him back in another way. Because of his practicality, Richard favoured a one-meeting approach to making sales, not wanting to waste time dragging things out with his clients over a period of weeks. He looked for a need, presented a solution, got his cheque and then moved on to a new client.

When I asked him if he ever worked more complex cases that may require uncovering a broader spectrum of needs that a client may have, Richard shook his head. He told me he worked in the farm communities near where he grew up because he knew the agriculture business and he understood the people. However, even after such a long time in the financial services business, Richard admitted that he still felt nervous whenever he approached a new client. Many of the people he worked with had known him since he was a child, or, in the younger generations, they knew his daughter. Richard felt that they still thought of him as a farmer like them, and so he didn’t feel comfortable pressing them for information that might uncover large or complex needs they may have. Instead, he tried to overcome his nerves, with hard work and by bulling through the sale to get to the cheque.

Richard now realized that his approach was limiting his ability to be a successful advisor. Every year was the same, every sale was similar. The nerves never left him, the sales never got any larger. He said that he felt like he had “one year of experience, 36 times.”

After reflecting on what Richard had told me, I realized what his problem was — he was making transactions instead of building relationships. As he said, Richard concentrated on getting the cheque and then moved on to a new prospect. He gave no thought to a client’s other or future needs. Even after 36 years, he felt that he was lucky to get a sale. I knew that what he needed to do, instead, was build relationships. He needed to gain confidence in his ability to serve all of his clients needs effectively and he needed to learn to communicate his abilities to his clients in a confident and convincing manner.

I told Richard that, if he was going to break through his revenue ceiling, he was going to have to stop thinking of having customers, people with whom he made transactions, and start thinking of having clients. The word clients is derived from the root cliesis, meaning to be connected to, or bonded with. And, since Richard was working in a market that he knew well, with people who knew him very well, he should have no trouble building confidence and developing long-term relationships.

Over the next few weeks, Richard and I worked on the ways in which he could build his clients’ confidence in him, focusing primarily on creating a risk/return script that he could use to open sales interviews. In this script, Richard stated the problems that he knew his clients faced, and explained, using stories about other clients that he had helped, how he would be able to solve their problems. We practiced delivering his script and honed it until it said exactly what he wanted. Then, we spent time going over the process he could use for keeping in touch with clients after he made a sale. I showed him how he should provide follow-up service with each client, and perform regular financial check-ups for them so that he could keep track of their changing needs over time. By doing these things he would be able to develop deeper relationships with his clients and make multiple sales to them over the course of their lifetime, rather than just performing single transactions.

In the two years that have passed since I first sat down with Richard, he has been able to develop relationships with many of his clients and has left behind his nervous sales style and the transactional approach to selling. Now he routinely sells two, three or more products to each of his clients, and, as a result, his revenue has jumped from a previous high of $150,000 a year to well over $250,000. Richard still works hard, just as his father had told him, but now he also works smart and both he and his clients are happier because of it.

Lessons Learned

In Richard’s story, we saw that he had limited the size of his business by taking a transactional approach to selling. Over his long career, he had been successful to some degree but had never been able to reach the revenue levels he desired. Instead, I showed Richard the power of changing his sales philosophy and building relationships instead of making a long string of one-off sales.

Unfortunately, Richard is not an isolated case amongst financial advisors. Even today, when the industry is much more complex and competitive than it was in the 60s when Richard started out, too many advisors are too focused on closing the sale and moving on rather, than working for the long-term benefit of their clients and their business. To build a business that will grow every year instead of stagnating, advisors need to spend their efforts, building their clients' confidence in them and performing the service activities after the sale that open windows to new client needs. Only by growing with your clients can you hope to grow your business year after year.

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The Covenant Group is referred to by many as the place entrepreneurs go to become Business Builders. They are considered to be thought leaders and have authored the best-selling books, The 8 Best Practices of High-Performing Salespeople, The Entrepreneurial Journey, and The Business Builder.