THE 95/5 STORY IS A LIE, IT'S TIME TO STOP TELLING IT!

Friends, we need to have a talk about the importance of honesty.   I was sitting in a recent conference and listening to a presenter teach the ole 95/5 conversation to ask for referrals. 

It goes something like this… 

Dear client, we get compensated in three ways: 

 - Fees  

 - Commissions 

 - Referrals or Introductions 

By depending on our current clients to build our practice, we are able to spend 95% of our time focused on you, our clients, and only 5% of our time looking for new clients.  See how that benefits you? 

Can you help me by introducing me to two or three handfuls of potential clients?   

………… 

This is a great sales pitch.  I remember being taught the 95/5 conversation way back about 15 years ago.  It works! 

But here is the problem, it’s a lie. 

If you are indeed getting ”two or three handfuls” of potential clients to work with, you are spending way more than 5% of your time talking with and processing through them.  

As I sat in that presentation, I felt my stomach tighten in reaction to the old script.  My gut, literally, was telling me…but it’s NOT true! 

The people that are diligently including this script in their process are totally client acquisition focused  and by definition NOT spending 95% of their time taking care of their current clients.  

But for once, I didn’t say anything.  I just murmured under my breath and went on with my day. 

When I got home, I was reading a blog from Micheal Kitces that reignited my indignation.  

According to Kitces research, the average advisor spends less than 50% of their time on client facing tasks, including meetings and over 20% of their time on client acquisition.   

Now keep in mind, this is the average advisor.  The average advisor probably isn’t hitting up their clients for “two or three handfuls” of potential clients to hound.  I would suggest that an advisor fully committed to the 95/5 script is probably spending more than 20%!  

Let’s be clear, I do not have a problem with asking for referrals or introductions.   

I have a problem with the manipulative, dishonest script that positions referrals as part of our compensation that leads to an unrealistic expectation of 95% of our time on client service work.  

I have a problem with lying.  

So, how do we approach client acquisition with honesty and transparency? 

 - We are very clear on who we serve and we share our Ideal Client Profile with our clients 

 - We have an honest capacity number that creates a natural sense of scarcity (see Kitces article it is 100-150 clients) 

 - We earn the right to ask for introductions by doing great work for our clients  

 - We offer the opportunity for our clients to “invite people they feel might get value out of our process into the community”  

 - We deliver a high-value, emotionally significant initial meeting so that EVERYONE walks away with value where or not they become a client.  

Honest.  Fair. Transparent. 

We do not have to lie and manipulate people to grow our practices.  We can do it with integrity and alignment if we let go of the old sales scripts and start telling the truth! 

With Purpose,

-Lucila

My friends, I would love to hear from YOU!  Do you think I am crazy?  Do you think I have gone overboard by calling a tried and true sales script a lie? 

Hop on over to The Intentional Advisor Mastermind and join the conversation!