Knocking on Doors is a lead generation strategy used by investment banking advisors looking to secure prospects for business while keeping expenses at a minimum. The strategy started in the early 20th century when insurance agents would go knocking on people’s doors. There were no fax machines, mobile phones, or the internet, and the agents had to physically go and collect insurance premiums while selling insurance products to their prospects. Other professionals who knocked on doors included the postman, milkman, and census taker. Even with the advancement in technology, knocking on doors is still a useful sales strategy for various industries in the 21st century.
Knocking on doors is ideal for two types of products, i.e., products that require demonstration and products that generate a lifetime customer value. For products that require demonstration, the seller must provide instructions to the clients and explain how their product is better than its competitors. Such products include cleaning detergents, insurance products, personal investment services, and beauty products. On the other hand, products that generate a lifetime customer value include pest control, home alarm and private security services, solar power, lawn services, and internet installation. These products require continuous support and the advisors must visit the customer’s home when necessary.
Why Advisors Prefer Knocking on Doors
Although there exist more advanced methods of generating leads, knocking on doors is still a popular strategy because of the following reasons:
Insufficient start-up capital
Some advisors enter the market with only a small budget that may not be adequate to cover marketing costs. New advisors find door-to-door selling a friendlier option, rather than waiting until they accumulate enough capital to fund their business through advertising. The biggest cost is fueling their car and printing some essential materials, such as fliers and business cards, that contain their contact information. This method is not only cost-effective but also more efficient in getting clients than cold calling and online advertisements.
Maximize their time while attending to appointments
An advisor may decide to knock on doors after completing appointments in an area. The advantage of this method is that the advisors can use the prospective appointment as a referral to solicit more prospects in the area. Where the prospective appointment is satisfied with the services provided, he/she may recommend the services of the advisor to neighbors, making it easy to land more clients.
Some advisors prefer the face-to-face setting of selling their brand to prospective clients, rather than cold calling and using direct mail to generate leads. The goal of marketing is to convert interests into actual sales, and knocking on doors provides a platform to get in front of more people and get more clients. Some may use this technique alongside other effective techniques such as internet marketing.
Advantages of Knocking on Doors
Greater brand recall
Face-to-face interaction is more effective than a telephone conversation or direct mail. A study by the Harvard Business School revealed that a face-to-face message results in 13 times more brand recall than a message delivered through other marketing pieces. Advisors can make a lasting impression and build trust that cannot be achieved through other marketing methods. At a time when corporations are focusing more on radio, television, print, and online ads, real human interactions show a greater impact. However, the ability of advisors to handle the high level of rejections that comes with knocking on doors determines how successful they will be in the field.
Unlike other methods of generating leads, the cost of running a knocking on door marketing campaign is close to zero. The advisors can knock on doors, introduce themselves, and land several clients within a short time. The only expenses would be business cards, door hangers for absent prospective clients, gifts, flyers, branded coffee mugs/t-shirts, and comfortable shoes. New advisors with a shoestring budget often prefer this method.
With most companies focusing on advanced marketing methods such as telemarketing, seminars, and direct mail, only a few advisors have the energy to walk outside and cold knock prospects. Also, most people view knocking on doors as an outdated method. This makes advisors who knock on doors stand out from the rest since they are the only ones who have a face-to-face interaction with prospects who have probably received dozens of phone calls or direct mail.
Build a local brand
Knocking on doors provides advisors with an opportunity to establish themselves as the go-to financial planning advisors in the locality. Edward Jones, a financial planning company, advises its advisors to knock on a certain number of doors before they can position themselves as the go-to brand. An advisor can start by getting out of the office and creating awareness among the locals. An advisor can then open an agency within the area once they have amassed clients within the locality.
Disadvantages of Knocking on Doors
Changing consumer behavior
In the current digital age, consumers visit online sites to find information on products that they want to buy. As they search for information online, they can also purchase online without visiting the stores. This leaves door-to-door advisors at a disadvantage, since they may cold knock prospects who already own or have information about a product. To keep up with the changes in technology, advisors can create websites that they can use to reach a broader client base.
No solicitation laws
Some states have “no solicitation” laws that limit advisors from going to any house within the state without a permit. They are required to pay a fee, sign up for a permit, or notify authorities about the intended visit. Failure to comply with these laws attracts hefty fines and even jail terms. For states with such laws, advisors should either comply or visit states or areas without such laws.
The decision on whether to visit or not visit an area may depend on the weather in an area. Some areas have extreme temperatures at certain times of the year that may force advisors to alter their door-knocking schedule. If an area experiences high temperatures from midday, advisors may plan to visit the area in the morning hours, without inconveniencing the residents. During the cold season, advisors may prefer to work in the afternoons when temperatures have risen somewhat.
Thank you for reading CFI’s guide to knocking on doors. To further your financial education, the following CFI resources will be helpful.