How Do You Find Good Clients?
Industry Advice
When Debt Counsellors enter the debt review industry, it is often with the goal of helping as many people as possible to get the help they need to get out of debt.
With millions of consumers who are over-indebted in South Africa, so many people could benefit from debt review, if it’s done well.
If you compare the number of consumers in serious debt trouble, with the amount of available Debt Counsellors, it would mean that each Debt Counsellor should currently be helping approximately 3000 people (which is, of course, not possible, but you get the idea).
Despite so many millions of people in serious debt, many Debt Counsellors struggle to find new people to help each month.
How can you find good clients each month?
The Fee Structure & New Clients
The NCR’s current debt review fee guideline make it imperative that Debt Counsellors to take on new clients each month, in order to be profitable and sustainable.
Half of the fees a consumer will ever pay the Debt Counsellor happen in the very first month of debt review. This is when a large amount of work is done by the DC. In order to stay in business and continue to look after existing clients, Debt Counsellor have to take on new clients to pay the bills.
This is why December and January, which are months where few people want to sign up for debt help, are so threatening to Debt Counsellors.
Surely It's Easy…
With some many people in debt, and how great debt review is, you would be forgiven for thinking that Debt Counsellors have it easy, and people are lining up to make use of their services.
This is just not true.
Even though many consumers know they are deep in debt, they do not actually want to make the changes needed to get out of debt. Living beyond your means and blind optimism are powerful drugs that will keep people trapped in debt for decades.
As a Debt Counsellor eventually takes on more clients, they begin to need additional administrative support. Each staff member come with related expenses beyond their salary e.g. extra office space, staff training or extra equipment. To afford that administrative staff, the Debt Counsellor is forced to take on more clients. Which can then push them into needing yet more help.
So, between consumers spending money they don’t have and the costs of running a debt counselling practice, the pressure to find new clients mounts.
It is good to remember that Debt Counsellors all offer the same service and, theoretically, charge the same fees. So, there is an element of competition.
‘some Debt Counsellors have had to shut their practices due to not being able to find enough “good” consumers each month’
Finding new clients is tough, and some Debt Counsellors have had to shut their practices due to not being able to find enough “good” consumers each month.
Bad Clients
It is possible to sign up lots of consumers who are looking for debt relief and still not have a successful practice.
Bad clients can sink your practice as fast as having no clients.
Bad clients are those who are not serious about getting out of debt. They like the idea but are indecisive and drop out of the process as fast as they signed up.
If you take on 100 “bad” clients, but only 50 of them go ahead with the process, all the time, effort and money you spent working on those 50 applications, reviews, proposals to credit providers and paperwork and submissions to court is squandered.
If, however you somehow take on 55 “good” clients and… 50 of them stick with the process, then you have only lost 10% time, effort and money. Even if it takes you longer to find 55 clients, it can still be more beneficial than taking on lots of unsuitable, non-committed new clients.
You can see how 50% wasted time and massive effort and cost will quickly sink your practice. And sadly, it is often the “bad” 50% who don’t go ahead, that register complaints with the NCR or tie up the phone lines and email and steal time needed to help those who are serious about getting out of debt.
Avoid Bad Clients!!!!
Options For Finding New Clients
So, if you need more clients…just advertise!
Great advice. Thanks. But it is not that simple.
These days, advertising costs a lot of money. Adverts in the papers, radio and TV cost so much, that smaller Debt Counsellors simply do not have the funds. They are struggling to just pay themselves and their staff.
Advertising online on Google and other search engines is highly competitive. Due to this high level of competition, the prices are high. If you Google ‘debt review’ or ‘debt counselling’ go look and see how many adverts are on each page and how few Debt Counsellors websites pop up. SEO is hard and with thousands of Debt Counsellors and only 1 “page one” – where most people shop – it is unaffordable.
Some Debt Counsellors are working hard on social media to provide consistent, positive messaging and brand presence. This is a good long term strategy. It does however take a lot of work and can be time consuming. So, do you do it yourself (so that you can’t do your actual debt counselling work) or do you outsource and carry a cost? Advertising on social media can also be expensive.
Some Debt Counsellors try cold calling or SMS campaigns. This can also be tricky. Who do you call? Who are you allowed to call these days (due to PoPI)? What do you say to someone who probably does not want yet another sales call? It is hard, time consuming and a numbers game. So, do you outsource? Can you? Besides, who enjoys receiving a sales call these days?
The NCR (and others) are not big fans of anyone other than a NCR Registered Debt Counsellor (or a member of their staff) explaining how debt review works.
‘So, do Debt Counsellors all become sales people?’
So, do Debt Counsellors all become sales people?
Who then actually does all the debt review work for new clients?
Have You Tried Buying Leads?
Hardly a day goes by without a Debt Counsellor getting an email from someone offering to sell them leads about consumers who are in serious debt trouble.
The offers range from long minimalist lists of people who use credit, to those who have very specifically asked for debt review help.
Such companies lay the ground work for an NCR registered Debt Counsellor to reach out to consumers and offer help.
This has been going on for a long time, and divides Debt Counsellors. Some say they would never do this and others say they would not be in business if they did not get these leads.
The introduction of the PoPI Act has further complicated matters.
Lead originator Dale Johnson (1 on 1 Leads), who prides himself on caring about giving his clients good leads, says that not all leads are the same and you should not just accept any offer of leads. He has heard of some bad scams out there and Debt Counsellors should beware. Many so-called providers are just out for a quick buck.
Such bad leads can result in confused consumers who don’t know they are interacting with a Debt Counsellor, and are discussing debt review. That’s super dangerous for everyone.
He also says that you want to be sure that any such leads are totally PoPI complaint and that the consumers involved really do want to speak to a Debt Counsellor about debt review.
‘be sure that any such leads are totally PoPI complaint and that the consumers involved really do want to speak to a Debt Counsellor about debt review’
Dale says if you are looking for a lead generator who is by the book, then it is good to be referred from another Debt Counsellor who is happy with the leads they currently get.
He also says that if anyone promises you high results on leads these days, it is unrealistic and too good to be true. He thinks that between 6% and 12% conversion rate among those who specifically ask for help with debt review, is realistic.
The Best?
Like most businesses, word of mouth is still “King” of good client acquisition.
If someone you know and trust advises you to speak to their Debt Counsellor, it is powerful. If you, as a Debt Counsellor, can turn every happy client into a sales representative about the process, then you will find a slow and steady trickle of new referred clients, who know what they are getting themselves into.
Good news: the NCR (and others) have not complained about these non-Debt Counsellors explaining debt review to other people.
One of the benefits of word of mouth referrals, is that consumers who have been in the process use their experience to give a realistic view of what the process is like. They do not make unrealistic promises like many sales people may be inclined to do.
One of the downsides is that people don’t often like to talk about their debt, so these high quality referrals won’t happen all the time (unless maybe you prompt them).
No Perfect Formula
It would be nice if we could give you the winning formula and you could use that to ensure that you have enough clients every month to keep your practice running.
Sadly, we can’t.
Some people do financial wellness days, others meet with school bodies, associations and unions and speak to members. Others use an endless amount of fliers. Members of some Debt Counselling associations benefit from new association programs and ideas being tried out by their association or leads being sent their way by fellow members. Other support service companies (such as insurance providers) are also stepping up and holding workshops and other endeavours to try assist Debt Counsellors and, as they have for a long time, many of the PDAs continue to go above and beyond in supporting the industry and their clients.
Whatever you decide to do, it is a good idea to actively keep your eye focused on this side of your practice and not slowdown in trying new things. If you don’t consistently try to bring in new clients, you will soon hit a wall and that may put your existing clients, staff and own income in danger.
‘If you don’t consistently try to bring in new clients, you will soon hit a wall and that may put your existing clients, staff and own income in danger’
It would perhaps be wise to talk to trusted colleagues to see what they are doing. They may have some tips and tricks they will share with you. Or, at least, tell you what not to waste your money on.
It is, admittedly, hard to find good clients these days. Debt counselling practices however need new clients to keep running. And without robust debt review practices there will be no one available to help those millions of people who desperately need debt help.
Note: To read the rest of this issue of Debtfree magazine click next/previous
