Knowing Your Numbers Leads to Growth

I’ve talked to advisors almost every day for almost 10 years. When I first start working with an advisor, one activity I always take them through is helping them know their numbers. Before we begin the exercise, they usually tell me they close 70-80% of their prospects. I typically say, “That’s great, let’s see the numbers”.

I’ll start by asking them how many first meetings they had in the past 12 months. Then we split the meetings up by categories.

For instance:

• 10 first meetings from referrals
• 50 first meetings from dinner seminars
• 25 first meetings from webinars
• 15 first meetings from CPA referrals

I then have them calculate how many of the first meetings went to second meetings within each category, then how many went to third meetings, and finally, how many closed within each category.

By going through this exercise, you will understand the following:

• What is your real close rate?
• What is your next-step transition rate (how many are falling out after first meeting, second meeting, etc.).

By doing this, you can learn where you need to improve. If a high percentage of people are not keeping their second meeting, then you can test different ways to fix that.

Test different pitches for the second meeting.

• • Instead of “lets schedule another meeting”, try, “Today’s meeting is really getting to know you and understand your concerns. In the next meeting I will present a plan to solve your needs and concerns.”
  • If people are falling off after the second meeting, why is that? Are you giving them everything they need to manage the account themselves? Are you not building enough value for that third meeting?

This process really makes you think through your sales pitch and process. It helps you evaluate what is working and not working and it allows you to test ways to improve your metrics.

Another great exercise is to understand your cost-per-acquisition in every lead source. When you do this, don’t count referrals as no-cost leads. We consider the cost of our client events into this.

As you go through these steps, focus on the metrics that will really help you grow:

• Lead cost from each category
• First meeting cost from each category
• Second meeting cost
• Third meeting cost
• Close cost
• Long-term value of each category (dinner seminar prospects leaving your firm after two years vs referrals who stay with you for 10 years)

It’s also important to understand the sales cycle of each audience.

• Calculate how long it takes for the average referral to close.
• In southern California, we had a lot of clients from companies like Boeing, SoCal Gas, Edison, Raytheon, and others. We calculated the average time frame it took people from each of those companies to become clients with us starting from the first meeting.
• We knew the average sales cycles for our dinner seminars, webinars, and other points of contact with our audiences.

Suprisingly, every audience had a different sales cycle. But most people within that audience all had similar cycles to each other.

We encourage you to know your numbers. Let us know how we can help. Our Master Course Series goes into more details and even provides an Excel tool you can use to help understand your numbers.