Firms that want their advisors to develop new business must create a firm culture that makes generating sales a way of life for the entire firm. In the majority of advisory firms, the founder is the primary rainmaker. He or she seems to have this innate ability or magical powers to create rain out of hay. For far too long they have been the primary source of new business and the entire firm has grown up around them in support of their rainmaker role.
Many firm owners that I talk with share stories of frustration when it comes to getting their advisory staff to take on the vital role of developing new business. They think the answers lies in the compensation structure; however, I believe it takes more than a clever compensation plan to build a successful business development culture. The answer lies in implementing these key strategies.
- Make business development a part of everything the firm does, and something that is the responsibility and part of the job description of every person in the firm. Developing activity based goals such as the # of phone calls/meetings, and the # of referrals will help to drive action and create accountability. Activities drive results, and results such as new clients and net new assets can be measured and rewarded.
- Hire people with the characteristics and traits associated with successful sales professionals. The most successful sales people, in virtually any industry, possess the following traits and characteristics; relentlessly persistent, possess a strong goal orientation, are inquisitive and demonstrate attentive listening skills, are passionate and enthusiastic about their industry and product offering, and always take responsibility for their results. I would challenge that these qualities are not trainable and that your best tactic is to hire individuals who possess some if not all of these attributes.
- Train and coach your sales team and arm them with the right messaging so they can be successful in finding new clients. I recommend the rainmaker(s) in the firm take on this important function or hire a sales & marketing manager with a proven track record of success as a “player coach” for the firm.
- Champion the business development cause. The leaders of the firm must communicate new business goals and report the progress that is being made towards achieving quarterly, semi-annual, and annual goals. Make sure everyone knows the firm’s business development plan and their role within that plan.
- Invest in the right organizational structure, and the tools and resources that support the business development process. Ask yourself what has been done to free up your advisors so they can spend more time working with client referrals and prospects? If your organizational structure does not provide your advisors with leverage and they are spending all of their time servicing existing clients, how much time can they realistically commit to developing new business? To be successful advisors need to allocate time everyday to business development activities.
- Reward and recognize the behaviors and outcomes that support your business development culture. Your compensation plans should recognize activity and reward results. Some tips to consider when incenting business development; only pay for clients that fit within your defined target, consider a hurdle or stepped incentives, meaning set a target for expected new business development and do not pay an incentive unless that target is hit. Make sure you align the actual timing of the payments with the timing of the contribution. Model out the plan to confirm that the business can sustain the payouts over time. Remember a firm that successfully creates a culture of business development won’t have to rely on a few rainmakers to support the entire firm. Instead, each member of the firm, from the receptionist to the partners, can contribute their unique skills and insights to constantly improve existing client relationships and cultivate new ones.
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