It is important to understand the difference between a client, a qualified prospect, a lead, and a suspect. There is also a lot of marketing math, ratios, and theory that comes behind that understanding.
Even sophisticated companies make simple mistakes when it comes to knowing the who their clients are and understanding the relative values of various types of clients. For instance, if one category of clients has an average lifetime value of $100,000 and another category has an average value of $5,000, then it is helpful not only to know that but to back it through all your marketing channels. Meaning that you consider the costs of your marketing efforts for the two different types of clients based on their average lifetime value. I have bounced my head against the wall with plenty of big-name companies over this very subject—companies who should “know better” and still make these very basic marketing mistakes.
Often, they give their advisors the equivalent of what used to be called the “White Pages” of “Suspects.” Basically, it is just a prospecting list compiled by income, profession, geography, or some other compiled criteria.
This is probably one of the most important things that any business owner, entrepreneur, or financial advisor needs to understand. You have to understand the difference between these different types of clients and the different levels of prospects that you may be encountering. This is really critical and life-changing/business-changing when you take the time to understand the differences and nuances. After all, we’ve all heard that 80% to 90% of your income comes from the top 10% to 20% of your clients, and 90% of your headaches come from bottom 5% to 10% of your clients.
You likely have fleeting attention from your suspects and without lead capture and follow-up, they’re gone, likely forever.
You must recognize that a prospective client’s time should be worth a huge amount to them and most people cannot be tempted by a free “sales pitch” meeting before being nurtured and educated. Getting most people on the phone is like pulling teeth, so you have to market accordingly. They will take notice of you when they need your services. It is your job to keep marketing and make sure you pop up just when they actually need you. After all, they will only buy when they are ready to buy.
To keep these people on board, your website needs to give them a reason to raise their hand, something that falls short of “give us a call today” or “book an appointment now.” Having this option shows they might be interested at some point in the future and allows you to keep in touch with them. You also want different educational material that is not going to teach them how to do it themselves but is going to teach them why you’re good at what you do, what you do, and how that works. Said in a different way, teach them “What to Do,” but not “How to Do It.”
Next, you want to be able to drip on them forever. And we’re not talking about just promotional emails, but by sharing quality information preferably through direct mail, text, email, retargeting, and even by getting them to subscribe to your Blog, Podcast, and YouTube Channel. All efforts are designed to build a relationship and educate until they are ready to make that next step and book an appointment with you. When I say “forever,” this is not a cumbersome or time-consuming activity for you. It is or should be all or at least mostly automated. It’s just about keeping your hook and bait in the water until they are eventually ready to bite.
A reminder, these people are your avatar prospects. These are the ones who meet your criteria. They don’t know you, but once they do, they start being part of your world. Then you can start spending money and time on them. A client might be worth an initial $5,000, and they might be worth $50,000 over their lifetime with you as a client. As such, you could send them $25 worth of direct mail, a box of stuff, a holiday card, or whatever else you think might help to earn their loyalty and trust. It’s the classic spend money to make money argument. If you could buy loyal customers who spend $50,000 with you over a lifetime for just $25, $250, or $2,500, you would do that all day long. It’s important to know your Return On Investment (ROI) on everything you do. This means at a minimum you need to know what the immediate value and lifetime value of a client is likely to be. It is also important keep track of exactly how much you spend to get a prospect and to get a new client.
There are all kinds of things you can do, but you can start to spend more money once they are in your world—once they go from suspects to prospects. Let’s use the divorced example again. If you were aiming towards divorced women between 45 and 55, you would not have the time or money to spend cash on every single suspect in the world. It simply would not be feasible. If weight loss companies sent direct mail to every woman that was over a 31 BMI, they would go broke, because the response rate would not be very high. But once the suspects responded to some marketing the business put out there, and the business knew who was interested; then the business could start marketing to the prospects more and sending direct mail pieces. Next they could have outbound telemarketing going to them along with all kinds of other contact tactics. Suddenly, it would be well worth the business’s time, effort, and money because the suspect has shown they care, thus becoming a prospect. That’s why it is very important to know the difference between suspects and prospects and what you can do to market to each of them differently.