Friday, July 13, 2007

Stockbrokers and Telemarketing: A Lethal Combination

Very frequently those of us that answer the phones here at SMS and NewBizBuilders will receive phone calls from stockbrokers trying to drum up new business. Essentially the conversation goes like this, with the names changed to protect the innocent:

Us: "Good morning SMS, may I help you?"

Them: (abruptly) "Can I speak to John?"

Us: "May I ask who's calling?"

Them: "Nate Hardbargain. I'm calling to talk about the proposal we're working on. He'll know what it's about."

Us: (knowing full well at this point that the call is oozing of b.s.) "I'm sorry he's not here, can I--"


To think that someone sits with a list of names and does this all day and actually-- at least in theory-- makes money is absolutely mind-boggling to me. These people defy all manners of phone courtesy and in my mind are not the type of people that I'd want handling my money. Being an aggressive money manager is one thing, but being a pushy son-of-a-gun is another. This isn't to say that all stockbrokers are whipper-snappers like these outlandish telemarketers are, but these callers certainly don't do anything to boost the field's reputation.

So I ask-- Is that really the best marketing tactic these guys can come up with? Why not just barge through the front door, stomp right into a person's office, and demand that s/he buy stocks based on his/her so-called expert recommendations? Of course nobody would do that in person, why would they think it would work on the phone? I really wonder who actually takes these aggressors up on these types of sales pitches...



Alex Har said...

Barging in certainly costs much more money than a call. In Singapore we receive such calls long distance from "stockbrokers" in Japan and Philippine, or so they say. They are pretty polished and do have good sales techniques.
Typically they would established whether you are someone who would trade over the phone. If they established that you are, they will offer you a pretty attractive first time deal at a faily affordable cost...something you could quite easily risk.

I think this could be a good sales approach...if it can been followed up by a good mailing pack to establish the credibility of the company. Alternatively they could secure enough names of interested prospects in Singapore and have someone pay a visit them.

This is especially necessary as people know about the many telephones scams relating to investments over the phone.

If such bad publicity did not exist, I would perhaps not mind risking a small trade.

Mike said...


Thank you for your comment, and I think you make some great points. I agree that combining a telemarketing call with marketing material and a meeting in person is a smart way to go in trying to build your business.

It's unfortunate, however, that some of these callers that I referred to try to use deceptive tactics (like saying they've "been working on a project with my boss", for example) and aggressive pitches. With the threat of investment scams (as you mentioned), that have become all-too-prevalent, we need to be protective of who we do business with. It's an adverse side effect of marketing gone bad...

Scott said...

Thanks for your comments, alex.

I think it's all in the approach. Telemarketing continues to be an inexpensive avenue for sales, and yet, I can't get on the "no call" list fast enough. Personally, I don't like to be interrupted at home, and have a very low trust threshold for those who find me that way – just above spamming, frankly.

But I imagine there is a funnel-filling success rate to such techniques, and folks out there that see opportunity on their caller I.D.'s when approached in this way, rather than something to block and avoid. But to your point, following up with a mailing pack might be a good way to gain credibility. We like to start that way actually, conditioning the market and then contacting them, but then again we're not trying to find the cheapest route to making a sale. Cost-effective is one thing, casting an impersonal net for a quick buck is quite another.

Had I been approached first with even an automated message describing the kinds of things this company were doing, I might be more apt to listen for a few seconds. But to ring me up, adopt a rude stance, try and trick me into forwarding the call, and then dropping a pitch on me? Heh, forget it, buddy.