I am sitting at my desk and the phone rings. For some reason our company does not have caller
ID. On the other end of the phone is a young (or so I assume) man (in fact I cannot recall a woman ever calling me with stock recommendations) who reminds me of a conversation we had a couple of months ago where he offered a few stocks for me to follow. The problem is that conversation never took place and I have a very good memory.
Brokerage houses obviously have some sort of prospect profile that identifies me as a potential customer. Aside from running a business for 15 years I am not sure what else identifies me as a person that would pick up the phone to speak with someone I do not know and be interested enough in some random stock recommendation that I would agree and engage them in a ‘relationship’ as a stock broker. Let me just say that I would NEVER do that.
But it has to work right? Dialing (pressing?) for dollars has been around nearly as long as the telephone has been in existence. So I surmise that the numbers game must be effective or else why would brokerage houses continue to employ this as a tactic? But the tactics are cheesy, sleazy and in my view even lower than a fast talking used-car salesman. On many occasions over the years someone employed to simply get me on the phone will call and ask me to hold for someone else – like this somehow makes it more important.
Having been involved in direct mail for much of my career, I was and am often asked why companies send junk mail. The answer is – because it works. No mailer wants to send mail to a person that does not wish to receive or respond to it. However the idea is that enough people will respond to make the promotion a success.
Receiving a mailing is incredibly less interrupting (and offensive) than a cold phone call from someone I don’t know asking me to trust them with investing money when they know nothing of my personal financial situation.
If I actually did receive a mailing from a stockbroker outlining their thought process, capability, and track record, and then that mailing was followed up by a phone call, if the information was compelling I would at least be more inclined to have some sort of conversation out of courtesy. That has never happened. And I don’t expect that it ever will.
I feel that the model of stock broker cold calling probably has not changed in fifty years. Isn’t it time it did? Do you get these kinds of calls? If so do they aggravate you?
I agree Mark, cold calls from stock brokers are annoying and not helpful in the least. They usually follow the same script, “Hi Mr. Fennell, I’m John Smith from XYZ brokerage. I’m not looking to sell you anything today, just to send my card and reach out when we have an equity offering that would be of interest”. One time, years ago, I said ok to that offer and got a followup call the next day hyping some piece of garbage that their firm was looking to pump and dump. Thanks but no thanks.
Having been in sales myself I have sympathy for anyone trying to drum up business over the phone. However, when one of these calls comes in now I’ll cut them off immediately, tell them I’m not interested then say goodbye.
I agree – I do have appreciation and sympathy for a professional approach. It just happens so infrequently!
Watch the movie “Boiler Room” to see a portrayal of a very sleazy firm from the inside. If you get it on DVD you can see the directors ending, way better than the released one.
Have not seen that but am aware. Thought you might mention GlenGarry GlenRoss – not all that dissimilar to the point I am making.
Hi Mark – it happens all over the world, even if you manage to get yourself on the ‘Do not call’ lists – they still get through to you. As you rightly said the most amazing thing is that it still happens and it is obviously still sucessful to a certain degree. I guess in these times people are willing to try anything, however, blindly buying stock from someone over the phone is beyond believe. However, for the sales guy it’s a ‘numbers game’ and it does work – 40 calls a day, 800 calls a month and maybe 3 or 4 sales will probably give a decent commission. I often have some fun with these guys – I challenge them to back up some statements and basically do my best to wind-them-up as much as possible until they have no response
Nice to see your name pop up Chris and thanks for the comment – hope things are well. It is of course a numbers game and yes I agree that it must work – or they would stop doing it. I do look forward to that day.
yes it still works and always will work……..my first year selling insurance I made well over six figures…….all from cold calling off dun and bradstreet lists.
It’s definitely not easy but it does work, I cold call for about 15 hours a day I’ve been meeting some great great beast clients 10MM networth, big market players. The key is being a real person and doing the right thing actually learning and doing the research and learning the inns and outs of a company as well as the markets. I’ll even call up sometimes with a new idea, give them the ticker symbol have them follow it, once they see that I have a few ideas that would have brought them a good percentage gain, they will usually give me a shot on a small amount like 200 shares. It’s not easy and there’s alot of negativity to deal with day in and day out but the strong and enlightened will see through all of that BS and see the light at the end of the tunnel. If you keep fighting through and staying strong the light will eventually shine through the tunnel!
I appreciate the well thoght out comment Dan and your approach is the kind that has a much better chance of being successful. Wish there were more people that at least tried to be straight up. And I have done plenty of cold calling earlier in my career – I know how tough it can be. Thanks for the read.