Effective Prospecting Methods And Building Client Relationships

Prospecting Methods

In order to successfully complete some of the tasks in this assessment you should have access to the following documents. These are available in the AAMC Training Useful Resources or you may wish to find your own/use your company documents.

• Credit Guide – important facts about the business and products you provide
• Adviser Profile – this may be included in your credit guide and could be simply your licence number as the services you provide are one in the same as your licensee
• Client Needs Review – for client data gathering
• Preliminary Assessment

1. What do you believe to be three good prospecting methods and why?  

1	Referrals	It is the surest way to score clients
2 Save Time On Research and Writing Hire a Pro to Write You a 100% Plagiarism-Free Paper. Get My Paper	Networking	It is the cheapest way
3	Seminars and Webinars	Makes a lasting impression

1. In your own opinion, what are some areas which are important to say about yourself and your business when creating a Facebook or LinkedIn profile? Why would correct and professional information be important to your organisation?

Some of the important areas which should be mentioned in our facebook and linkedin profiles regarding ourselves and our business include:

1. Correct name of the entity
2. Correct address of the business
3. List of awards or certification received for achievements over the years.
4. It is important that we mention our educational background in respect of the professional degree held by us.
5. Objectives, policies and belief statements of the company.

It is of utmost importance hat only correct and professional information is displayed in the social media this is because of the fact that the purpose of social media is to attract various stakeholders including suppliers, prospective clients, investors and employees. The information provided helps in building our credential.

1. What is cold calling? Is cold calling an effective prospecting method? Explain your answer.

Cold calling is an early stage selling process wherein calls are directly made to prospective buyers for the purpose of convincing them to buy our product. Cold calling is an effective way of prospecting. The reasons for this is plenty, some of them include a single person can make more call sitting in an office than roaming about in the market. This saves effort and time along with cost on the part of the company. But the effectiveness of the cold calling depends entirely on the communication skills of the person making the call. Hence the art of cold calling must be inculcated among the employees before embarking on it.

1. How would you build a relationship with a client through cold calling?

I would help him explore his interests and find his needs, then shape my product according to the current needs that he requires.

1. In your opinion, why would the following areas of information (found in the Credit Guide) be important for a new client to understand? How could this information protect all parties?

• your role and responsibility as Credit Advisor – due to the level of my understanding of the needs of the client
• the role of the organisation – it is important as it is the domain that matters, if the organization operates in that domain than it has a vitality.  
• the identity of and information about the Credit Licence holder – this helps us protect the identity of the client and the prospective region of inference.
• the range of services provided – This handles the current need of the client and its matching with the services offered
• all costs, fees, commissions etc. associated with the transaction – these must be low as they increase the potential customer might not return
• the procedures for handling complaints and disputes. –This helps retain the customer and also enables him to return for resolution.

1. Why do you believe is it important to encourage prospective clients to express their needs and goals when completing a data collection?

It is important as to know the client more and to offer him something valuable in return.

1. Your client Mary Jane has advised that she would like to purchase a home worth $400,000 and you have worked out associated costs of around $30,000. She has a deposit of $150,000. She has spoken to friends and are concerned that she may have to pay mortgage insurance which she hears can be a very high cost.

Complete a quick LVR calculation and explain the outcome to the client. Why is it important to respond clearly to the client in this case? What could you do to make sure the client has understood what you have advised?

Loan to Value ratio = Loan Valuation = 280000/400000= 70%. In this case the loan forms only 70% of the value of the property hence availability of loan will be easy for the client. The client will not have to pay the Lender mortgage insurance which covers the lenders in the event client fails to pay back the lender’s money. This is because the price of the property is substantially higher than the value of the loan given by the lender. It is very important to communicate this to client clearly because it helps the client as well as the advisor to gauge the actual financial position of the client with respect of the current market conditions and select the product accordingly.

1. Your client Mary Jane is hesitant about completing some of the information in the client needs review. As an Adviser, you must fully complete a client needs review for a number of reasons. What is a probing question you may ask the client to determine their resistance? What are two points you may highlight to the client to try and overcome this situation in an appropriate manner?

Displaying Correct Information on Social Media

The probing question would be “do you have any concerns? What are they?” It is generally found that clients don’t like to divulge personal information due to the risk of leakage of personal information. Hence it must me made sure that our client is not facing such inhibitions.

• I would highlight that our institution is statutorily registered and adhere to strict compliance policy.
• Also i would like to notify the client the purpose of the information taken from him and way in which it will be stored by us.

1. A prospective client is hesitant to use you as their broker because they are already a client with a competitor. What interpersonal techniques and communication skills would you use to overcome this?

In order to win over the customer I would make sure not to demean the existing competition rather create value for myself or establish my value for the client. it might be done by communicating to the client that though there may be many competitors in the market the product offered by us and the type of customer service provided by is unmatched in the entire market. The key is to make the customer believe that we are better suited in terms of solving the issues of the client.

You have now gained Mary Jane’s consent to move forward with fully completing the fact find. She has advised that further to the basic information provided above in question 7, she is buying the home to live in and she is a single parent on a good income in long term employment. Mary Jane would like to pay the home off early but would also like some spare funds for a holiday over the next 12 months. Protection of the home and her child in case of job loss or becoming ill is highly important. Mary Jane would like to purchase another investment property down the track to provide for her retirement. Prior to a marital separation, Mary Jane and herex husband had paid off another mortgage. Mary Jane has a clear credit history. The client may also like a 100% offset account as she had one in the past and it worked well to pay the loan off quickly. Mary Jane would prefer a major bank as she is concerned a smaller provider may not have any branches in her area.

Whilst it would be prudent to complete a fact find under normal circumstances, for this exercise we will ask you to complete the table below. In the table below highlight and record the client’s goals, concerns and creditworthiness (why the lender should consider them for the loan).

Goal	Concern	Creditworthiness
To pay off the loan amount as early as possible	She wants to have some spare amount for a holiday too	She was swift in paying of her mortgage loan earlier.
Safety of her child and home	In case of her illness or job loss she will be helpless	She is proficient in financial planning as can be judged from her wish to procure an investment property.
Opening up a 100% offset account.	She needs only a major bank because smaller banks might not hav branches in her area	She has previously operated with such bank accounts and had paid the entire loan amount quickly. This shows discipline on her part.

John has asked you for some advice on buying a car for personal use worth $40,000 over a five year loan term. You have completed his client needs review and must now complete some research to present John with appropriate finance options. Research and present two products that may be appropriate for John (you can use a number of sites including rate city to complete this activity).

1	Product Name : Latitude car Loan Interest rate : 6.99% (fixed) Comparison rate:  8.1% Interest rate type: Fixed Vehicle type: loan Loan security : Secured Additional repayment: Free Flexible repayments: yes Specialist Consultation: provided
2	Product name: Beyond Bank low rate car loan Interest Rate: 5.69% (fixed) Comparison rate: 5.97% Interest rate type: Fixed Loan security: secured Early repayment fees: not  applied Loan term: 7 years Establishment fees: $175

1. Using a search engine, research “Ten tips to protect your customers’ personal information”. Select one of the 10 points and in your own words briefly describe the purpose of this step.

1. Installing reasonable security measures to ensure the customer’s personal information is safe from unauthorised and inappropriate access.
2. Make a stringent privacy policy, inform the customer about the same, and keep it accessible to the customer.
3. Take record of all the information that you have, the place where it is stored.It should be noted that person that has access to this information.
4. Never underestimate the threat depending on the size of the organisation.
5. Only collect that information which are required for your purpose. Avoid taking useless and bulk information from the customers.
6. Use the latest anti-virus software’s, operating software’s and web browser. This protects it form virus and malware attacks.
7. Employ multiple layers of security. For e.g. spam filters help in weeding out malware and viruses.
8. It is very crucial to scan any new device that is being connected to the system in order to protect it from virus attack.
9. Encourage employee education and training on the matter, as they are ones who are handling the data. Educate them about the relevance and importance of the data.

Understanding Cold Calling

The most important point among the above-mentioned ones according to me is installation of the latest operating systems and antivirus software’s within the system of the organisation. This is because of the fact that the real threat in the modern day world crops up from the external environment of the organisation than the internal one. Competitors and other entities with malicious interests are always on hunt for personal data of the general public thorough ejaculation of various types of viruses and malwares. Hence, it is of utmost importance that proper steps are taken to stop them from entering the system by installing proper firewall methods.  

You have completed a fact finder, costing analysis, and LVR calculation for a client and have worked out the due to affordability issues, based on the living expenses they have provided, the client is unable to borrow the required loan amount. They would be able to borrow a loan amount of $5,000 less. Referring back to your client needs review, what additional question/s would you ask the client?

The difference in the loan amount due to the expenses of the client is very minimal. Hence some of my question to the client will be as follows:

• Is it possible for him to identify and then reduce non-essential living expenditure in order to meet up the funds required to finance the entire amount of loan?
• Is he willing to consider some other affordable options which would not require him to cut down his present expenses?

1. After you have completed the product research how would you prepare for the next contact?

In order to prepare for the next contact the following steps will be taken:

1. Use a follow up schedule: it will contain the details regarding when the calls and email follow-ups should be happening.
2. Use of different contact formats: use of multiple mode of contacts like txt, email etc.
3. Getting agreement on the next steps: further follow-ups with the customers should be stopped if they do not agree to it. It should be ensured that irrespective of their enthusiasm, a permission is obtained for further follow ups.

Task 2 – Written Test

1. List six buyer motives and in your own words, analyse and discuss issues relating to twoof them.

1	Profit	This motive is most common as it is for a gain, it can be short term or long term
2	Fear of loss
3	Comfort
4	Security	This reason occurs when one want to protect his future.
5	Pride and Prestige
6	Emotional satisfaction

1. Using conflict resolution and persuasion techniques, write a response to the following examples of buyer resistance:

Not interested	It is very justified to be not interested by a short phone call. But, a first-hand experience of our product will definitely create value for you with very minimal cost. It will require only fifteen minutes
Send me some information	It is possible for me to send entire information available with to you right now. But, it is seen that it raises more doubts in the minds of the customer rather than solving them. Hence the better alternative would be to use just 15 minutes of your time to consider it and analyse it thereupon.
No money – Can’t afford it	I am aware about the fact that your aim is to reduce unnecessary expenditures. I am just suggesting you to evaluate the product and am confident that you will find it as a small investment rather than a cost.
You’re wasting your time	Sir we never consider an interaction with a business professional to be waste of time. I am assured that after evaluating out product you will be sure that it can create more returns for you compared to its meagre cost.

1. How do you successfully undertake cold calling? Explain the process from start to finish.

In order to ensure that the cold calling is carried out successfully the speaker must be aware about the type of person he is dealing with and the person speaking to the client must be aware about the subject matter precisely. The process of cold calling can be summarised as follows:

1. Polite introduction of the person making the call and the product on offer.
2. Asking about the specific requirements of the client related to the product on offer.
3. Patiently listening to the response of the prospective customer and then framing the next phrase with utmost intelligence so as to ensure that the speaker and the product will be adding value to the client.
4. Informing the client about the specific product and its utilities and relevance to the customer but not trying to sell.
5. After informing take notes about the concerns of the customer related to the products preferably taking of notes in order to address the issues raised by the customer.

1. Read the following article, and answer the questions below.

Information in this article may not be based on current market statistics and is for assessment purposes only Why Melbourne’s Properties Will Keep On Rising In Australia, over some 120 years or so of not quite so accurate statistics, property prices have risen at an average compound rate of 10.4%, very slightly ahead of England.  Again, property prices have doubled every 7 years or so despite droughts, wars, changes of government, interstate and overseas migration, interest rate movements, exchange rate movements, changing rates of unemployment, CPI movements, etc. Property cycles When one takes a short-term view of property price movements, one can get confused by apparently contradictory statistics. However, if you understand that property prices move in 7-10 year cycles, the picture becomes a lot clearer. Let’s take one obvious example. The movement in NSW and Victorian property prices tend to be counter-cyclical to Queensland prices (especially South East Queensland).  This is heavily influenced by what is happening in the NSW & Victorian economics which encourages migration to Queensland, and at other times in the cycle, people returning to NSW and Victoria. So, when Queensland prices are moving ahead strongly (because of this additional demand from interstate migration), prices in NSW and Victoria exhibit slower growth, and vice versa. A study of cycles shows that the Sydney market is much more volatile than, for example, the Melbourne market. Sydney prices rise faster but can also experience significant falls in each cycle – Melbourne prices tend to rise rapidly (+25%, +20%) in the first two years of an upturn and then more moderate increases of 3-7% in the remaining years of the cycle till growth spurts again. Relative prices in each capital city Over the last 100+ years in Australia, each of the six State and Territory capitals have established a fairly stable ranking with each other in terms of their median house and apartment prices. Traditionally, Sydney has always been the most expensive followed by Melbourne, Canberra, Brisbane, Perth, Adelaide, Darwin & Hobart. Increases in prices in each of these markets, for whatever reasons (mining booms, economic recessions, rural booms and droughts etc) can cause some temporary shifts in the relative standing of each of these cities. But these are normally temporary shifts and the long-term standings re-assert themselves as the various cycles evolve. continued on the next page

In the last 3-4 years, Perth & Darwin prices (and to a lesser extent Adelaide and Brisbane prices) have increased dramatically due to the boom in mining and oil company revenues and increased demand for labour (and therefore housing) in those cities. Sydney and Melbourne prices, while still rising, have slipped behind these other cities in terms of relative price increases. Basic demand & supply The ever-increasing need for housing in Melbourne and Sydney is not based on temporary boom factors but on underlying (substantial and permanent) shifts in population. Each city has a strong underlying economy, which is not dependent on one particular industry.  In addition, estimates of Melbourne’s population for 2020 is over four million people (an approximate increase of 25% in 13 years). This is huge in terms of population increase and the need to accommodate these extra people. The reality is that Melbourne’s building industry cannot build more than about 140,000 accommodation units (houses and apartments) per annum due to shortages of qualified tradespeople of all types and shortage of suitably zoned land and the building permit process. Demand, on the other hand, is estimated at approximately 170,000 accommodation units per annum. Added to this, State and Federal governments have all but completely removed themselves from supply of affordable housing. The inevitable consequence is that house and apartment prices will continue to rise (quickly over the next 2-3 years and then more moderately). And rentals, which are already moving up quickly, will continue to rise ahead of CPI. Relativities with other capital cities will be restored by above average price increases in Melbourne and then Sydney. Interest rates The spectre of a return to 16-17% interest rates (experienced only once in Australia’s history and then only for a few months in 1990) has loomed large in many would-be investors’ minds. This fear is understandable but not justified. Interest rates are now approximately 1-1.5% above the lowest they have been in the last 40 years. From an economist’s viewpoint, they are currently above the theoretical long-term average that they should be (arrived at by adding the present CPI increase and the additional incentive needed to be offered for people to save and lend their money to others – historically 1.5-2.0%). Currently rates are above their theoretically justified level. This is not to say that the Reserve Bank will not use one or even two more 0.25 per cent interest rate rises to send a message to the market not to get “overheated”. Even two such increases will leave interest rates within 2% of their 40-year lows. A 0.25% per cent increase in the average mortgage of around $220,000 is equivalent to an extra $10.60 per week ($45.80 per month) in repayments. By comparison, a 10% increase in the median house price in Melbourne is equivalent to an $817 per week ($3542 per month) increase in the owner’s wealth. continued on the next page

Rents The level of rents (determined by supply & demand) and the value of the properties to which they relate establish the rental return per annum. The rental return rises and falls at different times in the cycle as real rents and property prices move up at different rates.  Rental returns on residential property tend to vary between about 3.5-4.0% and 5.5-6.0%. Melbourne’s rental returns have moved very close to the top end of this range and are showing every sign of continuing to rise further as vacancy rates continue to show a decline from over 4% to a little over 1.1% in most parts of Melbourne. The city’s long-term imbalance between the new accommodation that can be supplied and the level demanded by increased population/increased member of new household formations noted above, allows the actual level of rents to continue to rise quite quickly. This will attract new investors into the residential house and apartment markets, which will, in turn, keep pushing prices up. Housing affordability There is much debate about whether houses have become “unaffordable” for young couples. Much research has been done on the number of years’ salary it takes to buy the “average” house, and the proportion of income taken up by mortgage repayments. This is a very complicated issue, which has received a lot of publicity during this faux election campaign. Despite all the rhetoric I have seen no viable recommendations come forward and even less political commitment to solving the problem. My view is that Australia (which has enjoyed the highest rate of home ownership in the world) will slip in the world rankings. Those who have parents who can help them will still be able to buy a home (especially with abundant bank credit persisting) while those who don’t may be consigned to a life of renting. This will further stratify Australian society with the rich getting richer and the poor getting comparatively poorer. This, combined with governments removing themselves from constructing accommodation, will put more reliance on a healthy private rental market and make it suicidal for governments to remove or reduce investment incentives. Where are we now? The above factors of: · Over 900 years of compound growth in residential property values; · Where Melbourne prices are in the current price cycle; · Where Melbourne prices are vis a vis other capital city prices right now; · The short, medium and long term population forecasts for Melbourne; · The building industry’s restricted capacity to build new accommodation units; · Where we are in terms of interest rates v capital growth; · The continuation in the rise in rents and the very low vacancy factor; and · The lack of any coherent way of easing the pressures on accommodation

1. Explain three points from this article that would appeal to/encourage investors seeking to buy more property in Melbourne.

The three points which can be taken out from this article with respect to the high probability that the investors will be encouraged to buy more property in Melbourne are as follow

• Stability in prices: compared to other states such as Sydney the prices of Melbourne may rise about 20 -22% in case of an uptrend but doesn’t fall back drastically like in the case of Sydney. Rather it continues to grow at a slower rate of 3%-7%.
• Rise in the demand: it is expected that the population of the city by the year 2020 would be around 4 million and this boils down to the demand of around 170000 accommodationswhereas the with all the available resources available it is only possible to make around 140000 houses per year.
• Increased rental income: the rental income prevalent In Australia gives a return of around 3.5%-4% and the rental income of the city has notched itself up to the higher end of this level. Further the economists believe that it is going to rise further.

1. Why would it be prudent for a person to hold on to property over the long term?

It is very prudent for any person to hold on to any property he has in Australia for the longer run. This is because of the everyday rising demand for them. The demand is not expected to stop as the government is not going to participate in making accommodation in the new future. Hence the value of the property simply due to the effect of demand will grow over the period.         

1. Why will housing continue to become unaffordable for first home buyers?

The housing will continue to grow costlier for the new buyers because it entails consumption of their significant portion of their salary. The government is reluctant to take part in making homes for the people at affordable prices.

1. List sixdifferent prospecting methods and in your own words, compare and contrast two of them.

The six different prospecting methods are as follows:

• Cold calling
• Referrals
• Content marketing
• Networking
• Email marketing
• Seminars and webinars

Cold calling refers to the process of directly calling a prospective customer in order to convince him to buy our product. Whereas Referrals refer to the process of getting new customers or leads with the help of old customer’s referral. Thus there is a primary distinction of the nature of customer involved in the two concepts or methods.

1. Name at least eight different marketing techniques and in your own words describe the pros and cons of three of them.

	Marketing Techniques	Pros	Cons
1	Cause Marketing
2	Direct Selling
3	Cobranding
4	Earned Media
5	Paid Media	Widest reach	Most expensive
6	Word of mouth	Cheapest way	Not in control
7	Social Networks	Customized audience	Not Authentic
	Storytelling

1. Access the following website: https://www.finder.com.au/equipment-finance
   Explain the difference between a hire purchase and a novated lease. Analyse the strengths and weaknesses of the products and services offered.

Hire purchase	Novated Lease
It is a way of acquiring an asset by way of instalments. In real terms it is actually finance deal wherein the right of possession of the asset is transferred only after the payment of last instalment.	In case of novated lese is a three way agreement wherein our employer make the payment to the lessor by deducting the sum from pre-tax salary.
Strengths	Weaknesses	Strengths	Weaknesses
The purchaser with low funds can easily opt for this system	It has a high per month payment and non- payment of even one instalment leads to re-possession of the asset by the vendor.	It has a lower per month payment and requires less time for management of payments	There is a huge payment in terms of balloon payment

1. Research “The six phases of the buying and selling process”. List the steps for both the buying and selling processes.

	Buying	Selling
1	Dissatisfaction	Prospecting
2	Analysis	Needs Discovery
3	Intervention	Solution Crafting
4	Selection	Solution presentation
5	Commitment	Win
6	Implementation	Account Development

 

1. What legislation do you need to comply with when using the following prospecting methods:

Cold calling	Privacy act 1988and National Privacy principles
Email	Spam act 2003

1. List at least three types of information you need to provide your client with regard to:
   1. your role as an adviser

1	Range of services provided
2	Licences help for those services
3	All costs and fees

 the role of the organisation you represent.

1	Identity of the licence holder
2	Training and development of the advisors
3	Responsible lending by advisors

1. List five questions you believe to be most important to ask a prospect to ensure that they have a good understanding of what you provide.

1	What do you do for a living
2	How long have you been doing it
3	What are your future goals
4	Where do you live
5	How much debt do you have

1. Access the “Client Needs Review –Business &Commercial” document in the Appendices or Useful Resources Section on the AAMC Training Member’s Area.
   1. What interpersonal skills would you use to encourage the client’s to express their needs and goals?

In order to encourage the clients to express their needs and goals clearly open minded questions will be asked which will help us to analyse the true requirement of the prospect and whether the product is suitable for the customer and create value for him.

1. Why is important to understand a prospect’s level of financial understanding?

It is important to understand a prospect’s level of financial understanding because if our prospect is very cautious about his financials the price at which he will be ready to pay for the product will be less than the price acceptable for a prospect with lesser financial understanding.

1. Why is it important to protect the client’s financial information?

It is very important to protect the financial information of the client because the law specifically states so in the form of Privacy act 1988 and other legislations. It is also important because in case of a leakage the referral from that customer would become negative thus reducing the image of the company along with causing financial damage to the customer.

1. Why is it important to have a prospecting database?

It is important to have prospecting database in order to help us to arrange and manage the list of only those customers who are going to be really benefitted by our product is relevant for their purposes.  

1. How does a prospecting database help you prepare for the next contact?

It provides contacts, and schedule if the client is properly followed up.