Freezing Cold Calling
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Former Merrill Lynch managers and consultants Rich Capalbo and Rod Hagenbuch contend that brokers have too many small accounts that bring in little revenue. They say 60% of a broker's book results in 4% of his revenue. Where do these puny accounts come from? Mostly cold calling.
"At Merrill, we found that the 20% of the book that does 80% of the business all came from referrals. The bottom group came from cold calls," Capalbo says. "Out of hundreds of brokers, we only found a few top clients that came from cold calls."
The problem is a historical one, Capalbo says. "The guys running the businesses today grew up at a time when cold calling is what you did," he notes. "But there's been a paradigm shift."
