Prospecting strategies to help grow your retirement plan business

Refine your value proposition

Before you can determine the type of prospect you’ll go after—never mind how you’ll find them—you need to be clear on your business model and what you bring to the table. That starts with refining your value proposition, which is the basis for your elevator pitch when you have a prospect in front of you. Have clear answers to questions such as these:

• Why are you passionate about your work?
• What value do you add for your clients?
• Which services do you offer, and what do you specialize in?
• How are you staying up to date on industry trends, including legislative changes?

Gather a few success stories to show how you’ve made a positive impact on your clients and their employees’ financial lives. And know how you can add value quickly to any prospect who asks, maybe by benchmarking plan fees or providing a referral to solve a need. 

Determine your standard for plan sponsor prospects

With about 600,000 401(k) plans in existence, it may be necessary to stay focused on the types of clients that fit your business model.¹ So, which qualities do your ideal clients have? Here are some demographics to consider:

• Plan type—401(k), 403(b), 457, defined benefit, and more
• Plan size—participant count and plan assets
• Industry
• Geographic location
• Maturity—start-up plans or well-established plans

Be selective when you define the type of prospect worth pursuing. You can avoid spending time on plans that don’t fit your business model and areas of expertise. And if you’re having a hard time finding candidates that fit your mold, consider expanding your plan demographics as needed (e.g., by considering higher or lower participant counts).

Take advantage of prospecting tools

Online prospecting tools can help you find new leads and identify the issues plan sponsors need help with, allowing you to work smarter, not harder. For starters, some prospecting tools incorporate Form 5500 data, providing information on things such as:

• Plan type
• Plan assets 
• Participant counts, including participant status (e.g., active, retired, and others)
• Cash flows 
• Current providers 
• Location
• Industry 

With this information, you can filter each data point to create a profile that aligns with your ideal prospect and see which plans meet your criteria. 

Some prospecting tools may allow you to identify retirement plan deficiencies, creating opportunities for you to add value—and a reason to contact them. If the plan has a below-average participation rate, then your sales pitch may include examples of clients you’ve helped drive greater participant engagement and savings rates. 

Another great feature of some prospecting tools is their ability to generate comparisons and reports. See how prospective clients compare with others in their industry, location, and size. Save a copy or print it and take it with you to reference at meetings.

Many retirement plan providers—potentially, partners you work with—offer their own prospecting tools and resources to support your firm’s growth. Alternatively, you can find prospecting tools online with a quick search on your browser. While many tools are free of charge, some may come at a cost. Perform your own due diligence to find the ones that work best for you—it can be a worthwhile investment in your business.

Leverage your centers of influence

Good prospecting tools should give you everything you need to sift through the network of existing retirement plans, but what about small businesses that have yet to establish a plan?

That’s where your existing network—professional and personal—can help you generate new leads. Start with your centers of influence—TPAs, recordkeepers, accountants, lawyers, and others with and to whom you regularly interact and refer business, respectively. Make them aware of the types of prospective clients you’re pursuing, so when they send someone your way, it will be a good use of everyone’s time. It’s also important for people to know you’re actively expanding your business and not only trying to maintain your client base.

Build connections within your community of small businesses. Shop at different stores, try new restaurants, and establish a rapport with the owners. Having a local presence can help bring about new sales—the primary goal—or a broader network of motivated self-starters who understand the challenges you’re facing. People not only want to work with people they like, but they usually want to help them, too. So, develop friendly connections and see the types of referrals that stem from them—there’s no greater compliment than a referral.

And don’t forget about the opportunities that social media can offer, subject to the parameters set by your firm. It can be an efficient way to stay engaged, foster relationships, and create new connections.

Thoughtful prospecting strategies can help you win

There’s a good reason that not everyone is a business owner—it’s hard work. And being a salesperson bringing in new business is only one of the hats you need to wear, but you can minimize the time and effort you’re exhausting on prospecting and selling if you have a clear strategy that you stick to.

• Know your strengths and how you add the most value to your clients
• Have clarity on the types of plan sponsors—and plans—you want to focus on
• Use prospecting tools to find leads and identify the needs of plan sponsors
• Bring awareness to your growth strategy within your network

Many salespeople find prospecting the most grueling part of business development; using prospecting tools—among other strategies—can help you avoid falling into that camp.

1 “Frequently Asked Questions About 401(k) Plan Research,” Investment Company Institute, 10/11/21.