The Google Rule

Michael Schrage is an author and research fellow with the MIT Sloan School of Management's Center for Digital Business.

He writes a very good blog piece in the Harvard Business Review, entitled, “The Google Rule."

The Google Rule is a practice that Mr. Schrage has followed for the past eight years. When he meets someone for the first time, he always Googles them. In his words, "I can say without hesitation or reservation that this has proven an exceptionally valuable professional discipline. I almost always find some relevant factoid or useful info-nugget."

By itself, this is not a surprising thing. I, too, am an inveterate practitioner of The Google Rule.

Schrage goes on to make an interesting observation. During his executive education classes that he leads at MIT, he makes a point of asking his students...if they have Googled him, prior to attending the class. The answer has always been the same. One or two students raise their hands, but the vast majority of his students have not taken the time to do this.

For what it's worth, I would corroborate Mr. Schrage's observation. I am often surprised at the number of professionals who do not use Google much to gather information about prospects or clients.

Let's think about meeting a prospective new client for the first time. Typically, what is the objective for this first meeting?

When you meet someone for the first time (in a prospecting capacity), the bar can be set pretty low. The main objective for the first meeting...is to get a second meeting. Nothing more than that. Studies have shown that, typically and on average, it will require about 7-9 "touches" before a prospect becomes a client. (A "touch" is defined as any form of contact, e.g. an email, a phone call, a letter, a face-to-face meeting, etc.) Given that there will be a number of different occasions where one connects with a prospective client; the objective of the first meeting is simply to determine if this is a person who you would like to connect with, going forward. To accomplish this, you will need to engage in dialogue, ask some interesting questions, and build a personal rapport. In building rapport with a relative stranger, Google is a great place to start.

As Mr. Schrage points out, taking the time to learn about someone prior to a first meeting is a common courtesy. In fact, to not do so is incurious, slothful, and somewhat disrespectful.

But the real power of The Google Rule is this: it may lead to the unexpected. By learning an interesting factoid about a stranger that can be appropriately inserted into a casual conversation, you set yourself up as someone who goes above and beyond the normal course of business.

To a prospect, the "expected" is tedious and boring. Nothing wrong with it, but it certainly won't set you apart from the crowd. Going above and beyond shows potential new clients that you’re serious, thorough, and genuinely interested in them. Not a bad way to start off any new relationship.

by Chris Holman

Pollyannas

Pollyanna was a best-selling 1913 novel that was adapted to a 1960 Disney movie starring Hayley Mills (who won a special Oscar for her role). Pollyanna's philosophy centers on an optimistic attitude of life that she learned from her father called the "The Glad Game."

In popular lingo, a "Pollyanna” is pejoratively used to describe someone who always seems to find something to be "glad" about...even if this belief is unreasonable or illogically optimistic.

In an illuminating article in McKinsey Quarterly, it was demonstrated that equity analysts have been overly optimistic for a generation. For the past 25 years, equity analysts' earnings-growth estimates were found to have been 100% too high. The sanguinary projections have generally ranged from 10-12% annually, compared with actual growth rates of 6%. The only time they've been right in recent memory has been during the strong-growth years of 2003-2006.

The discouraging bit for investors is that this optimistic attitude has continued despite a series of rules and regulations, instituted ten years ago, that were intended to improve the quality of analysts' long-term earnings forecasts, prevent conflicts of interest, and restore investor confidence.

Of course, not all blame should be directed towards the analysts themselves. This all appears to be part of a grotesque minuet that is performed between Wall Street analysts and industry executives...many of whom go to great lengths to satisfy Wall Street's financial expectations rather than report the on-the-ground realities of their own industries.

The important takeaway for investors is that they will need to do more of their own homework, which is not realistic for the all-too-busy American today. The bigger takeaway for financial advisors is that investors will be increasingly seeking to pay someone honest and reliable who could do it for them. In order to serve their clients and potential new clients and truly fulfill their role as wealth advisors, advisors must step into the breach and protect their clients from the Pollyannish optimism of the equity analyst culture.

For financial advisors, this situation begs some obvious coaching questions:

• Are you taking full advantage of today’s financial culture by communicating your role as a trusting, reliable full service wealth advisor?
• How are you protecting your clients from the "Pollyannas" of Wall Street?
• How are you positioning yourself with your clients? Are you on their side of the table...or the opposite?
• How do you currently explain today’s market expectations? What could you be doing differently to explain actual, rather than inflated, results?
• For those advisors who work for investment firms who use equity analysts who are consistently and optimistically wrong…what is your role with regard to serving your clients?

by Chris Holman

Are you working hard enough?

As a preface to my thoughts today, I wanted to say a few things.

In the first place, I am assuming that many of the readers of this column work in the financial services industry, as financial advisors or otherwise. I happen to be the senior executive coach for ClientWise, an executive coaching firm that serves the financial advisory industry…and have been in financial services myself for 25+ years. No surprise, but many of my observations and ruminations reflect my own world view.

For those of you who aren’t in the financial services industry, we welcome your eyes to our prose, too. We certainly invite all comers to our musings…and presumably, you are reading this right now because of something that has caught your eye.

Whatever your background and interest, thank you and welcome!


With this prelude out of the way, I wanted to share a question that is of particular relevance to those of you who are financial advisors, or are in the business of marketing to prospective investor clients.

Are you working hard enough?

Here’s why I ask this.

I live in an upper-income zip code in Minneapolis, one block away from one of our city’s famous lakes. I’ve lived in this house for seven years. In thinking back over the past seven years, I can honestly say that I have never, ever received a phone solicitation (i.e. cold call) from a financial services representative. Not once. Moreover, I have probably received a total of 3-5 direct mail invitations, inviting me to some sort of financial seminar, over the same period.

7 years and 5 solicitations. That’s about 0.002 calls/contacts per day.

Thinking about this statistic, I wanted to see if my circumstance was an anomaly. Over the past month, I’ve taken an informal survey of 10-15 of my friends… attorneys, executives, entrepreneurs who live in “good” zip codes where there is presumed to be affluence. Same answer, i.e. they have rarely been contacted through any sort of solicitation and/or outreach by financial advisors.

What makes this observation all the more interesting is that I remember breaking into the financial services business during the 1980’s. During this time period, whenever I would introduce myself as a “stockbroker” to a stranger at a cocktail party or similar gathering …invariably I’d get a very audible groan as a response, and a complaint about the number of times each day people were being “hit” upon by random financial salespeople. My reaction would be to sympathetically nod my head and fake some sort of empathy for their situation…knowing full well that I was one of the perpetrators myself. Each day I would call lists of 50-100 investors out-of-the-blue. No big deal. That’s just what you did back then.

OK, I absolutely am not suggesting that we dust off our boots and return to being cold-calling cowboys (and cowgirls.) Generally speaking, cold-calling is a pretty ineffective way for financial advisors to connect with affluent investors.

However, with approximately 634,660 registered financial advisors in this country…you’d think I’d hear from 1 or 2 of you.

Rather than ask, “Are you working hard enough?” perhaps the more appropriate coaching question should be, “Are you working hard at finding new ways to connect with prospects?”

• What could you be doing more often in order to reach out to prospective clients?

• What tasks could you delegate to others that would free up more of your time to solicit new business?

• What strategies could you use to effectively “cold call” in today’s environment?

• How could you utilize the newest technologies, such as webinars and social networking sites like Facebook and Twitter, to communicate to a wider audience?

• What is your unique value proposition that distinguishes yourself from your competitors?

• Rather than direct cold calling, try networking in new and different ways that you haven’t tried before—you may even have some fun in the process. Take a cooking class. Volunteer on a local fundraising project. Participate in a Walkathon. Volunteer with Habitat for Humanity. Attend gallery openings.

The good news is that these days the number of ways you can “cold call” is only limited by your creativity and your commitment to keep working at it.

Cheers!

by Chris Holman