Because we have time for only so many appointments in a year, we must do our best to have each one with the right prospects. We must eliminate the sporadic results we get from acting as opportunists and become dedicated strategists if we wish to achieve extraordinary growth.
It is in this context that I share with you one of the most compelling ways of accomplishing exponential growth. I encourage you to take an important step in business growth by “Gapping your Clients.” This exercise will help you divide your clients into three groups: growth, active and passive.
When I started in this business, I was told that when I had 500 clients, I would have it made. I worked hard to gather 500 clients and when I did, I found I was not even close to being where I needed or wanted to be. I had all these files and had to do all the service work that went along with them. Yet I wasn’t producing enough business.
I thought hard about this issue and decided I needed to change my approach to building a business. I created an acronym that described what I will do with all the files I had accumulated. I would GAP the files by dividing them into three groups: growth, active and passive. I decided to be brutally honest about each file as I put them into these groups. I also decided that a client would not be each individual but an economic unit or a household.
My first GAP
The first time I gapped my files, I was shocked and dismayed to find out that I had only 34 growth files. After all the work to develop 500 clients, I had only 34 actual clients. I defined clients as those files of people in high-growth situations with whom I had an excellent working relationship and with whom there was a high degree of mutual trust. I also decided that these must be people who think of me or even depend on me for advice when making financial decisions. The rest of the files were either policyholders or transactional sales. They fell in the active or passive category.
I was so disillusioned with the results that I almost left the business. But the next year, I literally doubled my income because I knew exactly who to see and I stayed on top of those situations. In addition, I prospected for referrals from the growth clients I developed. I was excited at the results and for the rest of my year in the field, I gapped my files every three years.
Growth clients are clients who you feel will generate a substantial amount of revenue from the purchase of products and services from you, within the next two years. Please note the key words will generate substantial from you within two years.
You want to focus your energy on these people. If they are high-growth people, you may have to meet with them quarterly. You need to connect, even if it is just for a discussion over breakfast. If you follow through, you will experience terrific growth because you are investing your time developing positive relationships with the right people. Note that these are your top prospects for substantial additional business. They may be existing clients who have not yet purchased what they need.
Once you acquire a client or do the business that was identified when you classified a growth situation, you move the file to your active files. You see, growth does not apply to your top clients; it applies to your top prospects. Remember the definition of growth: it includes those people who will generate a substantial amount of revenue from the products and services they will buy from you within the next two years. If you don’t see this happening, they fall in the active category. The file from the largest sale I ever completed was immediately transferred to our active files. The staff and our client management system took over to make sure these clients were properly looked after.
Focus your energy on those situations that will make a difference in your results.
Active clients are good clients. They have bought in the past, and they will buy in the future. But they don’t fall in the growth category. That doesn’t mean you love them less or treat them worse. But you must be very effective when working with these clients. You can spend a lot of time looking after active clients, but you can’t grow much if you spend all your time on the active files.
You must become highly efficient with your active clients. Begin setting the stage when you first acquire a new client. When you make promises about the services you will provide, always say “we” instead of “me.”
As soon as you can, hire a staff person to help with active clients. Then start delegating as much as you can. Even if you know what to do, delegate as much as you can to your assistant so that your clients learn to deal with them, not you. You will still conduct client reviews.
Inform new clients that your assistant will call to organize all review meetings, and that all reviews will be conducted in your officeassuming you are equipped to do this. Eventually, think about developing a licensed staff person who is qualified to deal with routine transactions. Delegate the administration and routine transactions on files as much as you possibly can.
I once did a seminar in Cincinnati and a participant asked me: “Wayne, you made MDRT nine times last year. How much time did you spend on client service?” Then he paused and went further. “I’m not doing as much business as you are, but my service work is killing me.”
I responded by making a big circle with my arms as I said, “I do zero client service work.” He then said, “Cotton, you just lost all credibility with me, because that’s impossible.”
Then I explained that I had two salary-paid CLUs on staff whose jobs were to service clients and deal with routine transactions. You see, eventually, I learned to focus only on growth files and new client acquisition activities with on-profile prospects. It is pretty easy to grow if you are always seeing the right people.
Over time, I developed a small staff team to help with the service, maintenance and retention of business. Whenever I acquired new clients, I introduced them to the team and explained how we work together. The clients felt they had excellent service, and I had a high degree of freedom.
The files of passive clients are the files you would prefer someone else service. Delegate these files to the mail carrier to deliver your checklist of services once a year. If people in the passive category respond, fine. If they don’t, you have offered your services. If you can, turn these files back to the service center so that you do not have to follow through.
I once explained the GAP concept to a veteran producer. He had 3,300 client files and was so busy with service work that he barely qualified for basic MDRT each year. That’s not a bad thing, but I knew that Ray could be doing three times the production he was doing. I agreed to spend a Saturday morning with him, getting him started with the gapping project.
I explained the process, and then pulled the first file from his system. The last name was Aaron. When I asked about these people, Ray explained that they seemed like really nice people. I questioned further and discovered that Ray received this unassigned policyholder twelve years earlier and had never even met the people! He had talked to them on the phone several times over the years, but no business had developed.
I wanted to make a point, so I ripped the file in two and threw it in his garbage can. He was completely distraught. Out of the next ten files, only three were on legitimate clients and all of them fell in the active or passive category. Our morning ended early because Ray couldn’t handle the impact of this change.
Ray was a true financial professional who was very knowledgeable and could have been a very high-end producer. But he lived out the rest of his career with only mediocre production. You see, he made an unrealistic service commitment to a bunch of people, many he hardly knew. He spent years doing service work for little reward. Had he cleaned house so he could focus on people who could appreciate the value of his work and provide compensation for his services, he could have helped far more people in a more extraordinary way.
My last GAP
The last time I gapped my clients, I had 2,100 files, and 247 fell in the growth category. I was doing Top of the Table level production in 65 selling afternoons each year. I was also giving 100 industry talks and seminars a year. I had no choice but to be focused.
When I gapped my files and realized how much potential business I had in the hopper, I immediately stopped all forms of marketing, except for referrals. With 247 on-profile prospects and on-profile referrals that go along with them, there was no further need to create any additional flow of activity. Once again, gapping proved a point. The next year my production went up by a whopping 50 percent without any investment in marketing. All new business came from either the growth files or ensuing referrals that flowed along with them.
Now it’s time for action. Determine what the words growth and on-profile mean to you and go through all your client and prospect files. Be very honest with yourself as you do this exercise. This clean-up will make a dramatic difference in your future. When you are finished, focus your energy on those situations that will make a difference in your results. May you have great growth with this concept.
© 2003 Wayne Cotton, CLU
Wayne Cotton, CLU, was a member of MDRT, Court of
the Table or Top of the Table for 21 of his 28 years in the field. Today,
he is a speaker, coach, mentor and consultant for the financial services
industry. You may contact him at firstname.lastname@example.org.