The Prospecting Professor

Pop!...Goes Mr. Housing Bubble

Is there a whistling sound in your ear? It could be the sound of Mr. Housing Bubble...deflating.

Check out this report from Naples Sun Times (see link to article). As you may know, Naples, FL has been the epicenter of real estate speculation in the housing market in the U.S.

• In February, there were 5,417 single family homes listed in the Naples Multiple Listing Service (MLS).
• Similarly, there were 5,289 condos/coops for sale...that's a total of 10,706 between the two.
• In February, 383 properties in the Naples areas were sold.
• Doing the math...10,706 divided by 383 ='s 27.95 months.
• In other words, if no other properties come on the market in Naples (a very big "if"), it will take 28 months for all listed homes to be sold.

Whooosh!

Do you have clients who have become over-loaded in real estate? If so, let me strongly recommend the following report...put together by the folks at Wharton, "Protecting the Value of Real Estate-Rich Portfolios"

The authors point out that many high net-worth investors have real estate portfolios that are characterized by the following:

1. Highly Concentrated...relatively few asset types make up a large proportion of net worth.
2. Highly Correlated...those holdings tend to behave similarly.
3. Illiquid...investments are locked up for many years.
4. Interest Rate Exposure...aggressive use of leverage with floating-rate loans.

Very good article...and be sure to read the recommended Investment Strategies, at the end.

Bad Sales Behaviors

A few years ago, Purchasing magazine surveyed their audience, i.e. purchasing professionals, and asked what traits they liked best...and least...in salespeople.

The #1 most admired characteristic was thoroughness and follow-through. Coming in #2 was market knowledge and willingness to keep one posted.

The least desirable trait was a basic lack of knowledge, and a lack of preparation on the part of the salesperson. Similarly, a lack of interest and/or purpose on the part of the salesperson was viewed negatively.

Interestingly, in a survey completed in November of 2005, Herbert Research uncovered that 62% of salespersons spent 20 minutes or less for sales calls. 33.3% spent 1-10 minutes on preparation.

Another interesting finding of the survey is the sources that salespeople used, 44% used Google as their principal source. In contrast, only 2% used the Wall Street Journal, either print or online, as their go-to source.

This last point is a topic worthy of discussion by itself. With the ubiquitous presence of Google, many of us have forgotten about the distinctions between the visible, and invisible, web. The "visible web" is what you see in the results pages from general web search engines. It's also what you see in almost all search directories. The "invisible web" is what you cannot retrieve ("see") in the search results and other links contained in these types of tools. The "invisible web" includes most databases, and sites that are password-protected, e.g. the Wall Street Journal Online.

Depending upon who you  listen to, Google indexes between 4-8 billion pages. In comparison, the 60 largest "invisible web" sources contain 84 billion pages of content.

In other words, Google is not God...or his son either.

Happy Birthday, Albert Einstein

Today, March 14th, is the birth anniversary of Albert Einstein.

As a young child, his teachers thought him to be developmentally disabled. He refused to study any subject that he didn't find interesting...which excluded pretty much everything except mathematics and philosophy. In high school, one teacher attempted to expel him because all he did was sit in the back of the room, smiling. He finally dropped out at age sixteen. He flunked the entrance exam to a technical college in Zurich in all subjects except math. However, one of the professors was so impressed with the math scores that the school accepted Einstein anyway.

As a Ph.D student in physics, he didn't get along well with his professors...as he was constantly questioning their ideas and refused to show the proper "respect." He often missed classes, and only passed the final exam because a friend let him borrow his class notes.

While working at the Swiss patent office, Einstein began studying and thinking at all hours of the day and night...while taking care of his newborn son. He was most interested in finding some law that could explain all of the forces of the universe, from gravity to electromagnetism. One night, in the spring of 1905, he went to bed extremely disappointed. The following morning, he woke up and suddenly everything that he had been ruminating about made sense. He said, "It was as if a storm broke loose in my mind."

In addition to his Special Theory of Relativity, Albert Einstein was also the "inventor" of some of the best quotes. Here are a few:

• Any man who can drive safely while kissing a pretty girl is simply not giving the kiss the attention it deserves.
• Anyone who has never made a mistake has never tried anything new.
• I am neither clever nor especially gifted. I am only very, very curious.
• It is a miracle that curiosity survives formal education.
• Life is like riding a bicycle. To keep your balance you must keep moving.
• Only two things are infinite, the universe and human stupidity, and I'm not sure about the former.

Happy Birthday, Albert Einstein!

Dinner Party

Mary Kay Ziniewicz is the Director of Business Development for Parsinen Kaplan Rosberg & Gotlieb P.A., a 30-lawyer firm based in Minneapolis, www.parlaw.com. One of the 2005 marketing initiatives that her firm undertook was to throw an "Interesting People" dinner that connected interesting clients and friends.

Here's what they did:

• She asked each of the firm's attorneys to carefully select interesting clients and friends who, in some profession or personal way, would connect with each other.
• The prospective guests were 'served' sealed-wax invitations in surprising places. For example, the invitees may have been found at dinner, in their back yard, out to lunch, etc.
• The guests where approached by a stranger who inquired, "Are you John Doe?" When responding yes, they were served the invitation that read...
• "You have been identified as a very interesting person by Shane Swanson at the Parsinen Kaplan Rosberg & Gotlieb. You and a guest are invited to attend a special evening planned for our "interesting" friends. One detail...neither Shane, nor anyone from PKR&G will be in attendance."
• Upon arrival at the appointed place for dinner, a mysterious host, dressed in black, greeted and handed them an envelope that contained a guest list and purpose of the party. This read...
• "You are about to enter a 'connecting' experience.' Your first connection will be Lynn Gordon, entrepreneur, and founder of French Meadow Bakery. Lynn revolutionized the food industry with her functional breads and health food business model. You were named as an Interesting Person because you offer something special to those who meet you. 'Connecting" is a powerful experience. Every connection made impacts life...personally and professionally. You are a very interesting person! Tonight you will meet some of our interesting friends. Have fun. You are about to have 'experience' that will impact your life!"

The dinner was a success. Guests connected, shared personal and professional experiences, made new friends, and most importantly, felt special. The firm gained two new clients as a direct result.

Guest feedback included comments like:

• "I am so honored..."
• "Never an awkward moment..."
• "Spectacular..."
• "What fabulous people..."
• "I want to go to all of them..."

PKR&G plans on having a number of Interesting People dinners in 2006.

Business Casual

"Clothes make the man. Naked people have very little or no influence on society."...Mark Twain

Until the early to mid '90's, the boundaries between work and after-work fashion were clear and distinct: executive attire at the office, casual attire at home. As Exhibit #1, check out Ward Cleaver's fashion sense... and the obvious delineation between home and office.

During the last decade, contemporaneous with the dot-com era, the attitudes towards work attire changed. The dot-com phenomenon allowed workers to say, "It isn't how you dress, it's what you do that really determines how successful a business is." Ideas and creative thinking supplanted structure and tradition.

These days, many people in the workplace don't know the difference between a dress code and a zip code.

Without bemoaning the decline in workplace dress standards, The Prospecting Professor asks these questions:

• Have you ever felt that you had to apologize to a client or prospect for your casual dress?
• When you dress down, do you feel that you lose some professional credibility?
• Have you become a casualty of too much casualness?

If so, you might consider re-evaluating your wardrobe. The reality is that your clothes, appearance, and grooming really are the packaging of your own personal brand.

In the opinion of 'personal branding' maven, Lesley Everett, first impressions are formed within 15-30 seconds upon first meeting someone. Thereafter, it takes as much as 20 different impressions to alter the effect of the impression of the first meeting.

It wasn't so long ago that folks dressed up to take an airplane trip. Imagine that! Today, airline travel is more a case of  "where the uncomfortable are fed the inedible by the indifferent."

For those of us who interact with clients and prospects on a frequent basis, it is indisputable that they (clients/prospects) make judgements about us on the basis of our personal image. In today's image-conscious and visual world, this is an unavoidable truth. Since, our values, strengths, motivators, drivers and beliefs are being extrapolated from our dress, appearance, voice, body indicators, behavior and attitude...this should give us pause.

However, the good news is that we can control many aspects of what others see in us. Of course, if we project an image of ourselves that is false, we will be 'caught' rather quickly. On the other hand, if our 'personal brand' portrays our genuine uniqueness and individuality, that's the important element.

Speaking of the portrayal of false images, and looping back to the Ward Cleaver reference...remember Eddie Haskell, "That's a lovely dress you're wearing Mrs. Cleaver"? You knew that Mr. and Mrs. Cleaver were completely attuned to Eddie's two-faced demeanor.

Developing a consistent 'personal brand' is one thing. Duplicitous superficiality is another.

First Impressions

Lesley Everett is the founder of Walking Tall, "Europe's Leading Personal Branding Company." As such, she has some strongly held views on how we develop our "personal brand." Our "personal brand" is the collection of ideas people have about us, when they think about us. In essence, it is what is said about us when we are not there, and how we are described to others.

One of the most important components of our personal brand is the First Impression.

A first impression is formed within the first five to seven seconds of meeting someone. Within the next five seconds, we can add another 50% to that impression. Ms. Everett's research indicates that it takes another 20 further experiences with someone...to change a first impression...which means that the first impressions that we project are critically important in any new relationship.

The implications of this are pretty scary, when you think about it. Within 15-30 seconds, we have been judged on all sorts of  things: our credibility, our professionalism, our trustworthiness, our friendliness, our approachability, our creativity...and  so on.

What others do when  they take in all of the elements that create a first impression (and what we do when we meet others) is to scan our whole bodies for all of the non-verbal clues and signals that create a first impression. This includes everything about us:

• Dress and grooming
• Body language
• Smiling..or not
• Posture
• Eye contact

You have, no doubt, heard the phrase, "You never get a chance to make a first impression." The good news is that we have the ability to create what we want to be 'famous' for, when we go about developing our own personal brand.

Brain Food

Mom was right!

Growing up Catholic, we were served fish every Friday. As we pecked and picked at the crusty rectangles of fish sticks on our plate, our mom would say, "Eat your fish. It's brain food." It turns out that she was right. Thanks Mom!

The benefits of fish are attributed to nutrients known as omega-3 fatty acids, found in small amounts of some plants, and in abundance in oily, cold-water fish such as salmon, albacore, trout, herring, halibut, and sardines. Recent studies have shown that brain-wise "you are what you eat." Foods such as fish, and a curry spice called curcumin (turmeric) can give your brain an added edge to stay healthy in the face of injury or disease. Similarly, high-fat and starchy foods take your brain health down a peg or two.

Omega-3 fatty acids contribute to higher concentrations of a protein in our brain called "brain-derived neurotrophic factor (BDNF)...a compound that encourages nerve cells to grow and make new connections. Although the connection between omega-3 fatty acids and BDNF is unclear...there is little doubt that BDNF is good for us. When neuroscientists sprinkle a dilute solution of BDNF onto neurons in a lab dish, the cells grow like crazy. It's like brain fertilizer.

It is also interesting to note that physical exercise contributes to the development of BDNF. In a 1999 study at the Salk Institute in La Jolla, CA...scientists studied two groups of  mice on the in the laboratory. The two groups had identical living circumstances except for one factor...one group had running wheels in their cages. Over a course of several weeks, the researchers kept track as the 'running mice' voluntarily logged up to 3 miles on their wheels every night. When the study was complete, the researchers dissected the brains of the mice and found  more neurons and stronger connectivity (which is evidence of learning) than did the mice who didn't have the wheels. Additionally, the running mice had consistently higher activity in the gene that codes for BDNF than the non-running mice did.

Ironically, the physical fitness of Americans is in a downward spiral. The Centers for Disease Control and Prevention reports that 20% of persons, eighteen years and older, exercise for less than 10 minutes each week.

For more on this, consult this edition of Science News, February 25, 2006.

Also, here's a recipe for curried fish. As noted before, curcurmin is a yellow polyphenol that's a component of turmeric...a curry spice that, like fish oil, prevents neurodegenerative diseases.

As a note, for those of you who check into The Prospecting Professor for 'sales nuggets'...Sorry Charlie!...you got FISH NUGGETS instead.

I simply wanted to help you with your brain-power. Tomorrow...back to the sales nuggets.

The Baby Boomers

Yesterday, I chatted about the heterogeneous nature of the 50-plus market...and discussed differences between the GI Generation (born between 1910 through 1932), and Baby Boomers (born between 1946 and 1964.)

Again, I am borrowing from the work and views of Ruth H. Mitman, Ph.D, a gerontologist and educator who is a member of the American Society on Aging www.asaging.org and the National Council on the Aging  www.ncoa.org.

While I'm sure that you've heard the numbers, the statistics of the 50-plus market bear repeating. Between 2000 and 2010, the number of persons over the age of 50 will increase by 50%. This population owns more than 75% of all assets in the U.S., and earns 50% of all discretionary income today.

Ms. Mitman argues convincingly that financial service companies should be definitely not lump the GI Generation and the Baby Boomers in the same demographic...simply because they are both 50+ in age.

Baby Boomers command attention because there are so many of them...78 million in all. The first of the Baby Boomers turned 59 1/2 last year. The last of the contingent will reach "retirement age" in 2023.

Baby Boomers experienced the Vietnam War and saw/participated in the conflict at home. They also witnessed the assassinations of JFK, RFK and Dr. Martin Luther King...as well as the incipient civil rights, feminist, environmental, and consumer rights movements. They were the first generation to have grown up with access to credit cards, and have learn to buy now and pay later. They are, in general, highly educated and will question authority.

Their brand of retirement will look rather different than the GI Generation.

In working with Baby Boomers, Dr. Mitman goes on to suggest the following:

• First names please. Being called "Mr." or "Mrs." will make them feel old, and (Heaven Forfend!) like their parents.
• Boomers will want to be in charge of business interactions. They will look to you to lay out the options and discuss benefits and features...however they will want to control the actual buying decision. (Wait a minute...I don't know if I agree with this one.)
• Save them time. Convenience is a huge factor for boomers...given their busy, active lives.
• Offer multiple ways of payment. Remember that credit is a way of life.
• Consider combining non-profit causes, e.g. global warming, disaster relief, with your for-profit business. Offer ways that boomers can give of their time, talent, and money to help those who less fortunate.

In other words, financial advisors who are/will interact with the 50-plus market should recognize, and be extremely cognizant of, generational influences.

It's called "competitive advantage."

The GI Generation

For financial advisors, the "50-plus" market is large, lucrative, and growing...yet not homogeneous. This age group is actually composed of three different generations:

• The GI Generation, born between 1910 and 1932,
• The Silent Generation, born between 1933 and 1945,
• The Baby-Boom Generation, born between 1946 and 1964.

In the views of Ruth H. Mitman Ph.D, a gerontologist and educator, financial service companies should recognize that individuals who grow up during a specific time period hare the same historic environment and similar life experiences. These collective attitudes towards, money, religion, politics and gender should give providers of financial services clues...that provide competitive advantages for those advisors who are cognizant of these differences.

The GI Generation grew up during the Great Depression and World War II...and were, in general, profoundly affected by both events.

• They experienced an 86% decline in the stock market.
• Social Security and the GI Bill were enacted during their formative years.
• They are frugal and cautious...and see debt as anathema to their genetic make-up.
• The believe in sacrifice, saving, and working hard...and trust government, big-business, and each other.

Dr. Mitman has some additional points, when interacting with the GI Generation.

• When addressing them, use the formal "Mr. or Mrs. Smith," never the informal "Harold" or "Esther." In their youth, manners and respect were the expected, and proper, norm.
• As a financial advisor, they are likely to see you as an authority figure and ask for advice and recommendations.
• The age, size, and security of your company is an advantage that should be stressed from the outset. If your company has been in business for 100+ years, you miss a big opportunity by not saying so. Similarly, your years of experience are an asset worth promoting.
• For the GI Generation, personal service and relationship-building is an expectation...not a nicety.
• Remember the story about Androcles and the Lion...where Androcles removes the thorn from the Lion's paw? Given their background, the GI Generation are hyper-sensitive to surcharges and late fees...no matter how small they may seem to you. "Niggling" charges are thorns that cause this generation to roar.
• With this generation, it is a reality that you will be interacting with women, more than men. Consequently, they may be less experienced and will need more attention and patience.

How does the GI Generation differ from the Baby-Boom Generation? Significantly...and more on this tomorrow.

Truman Capote: Networking in Holcomb, Kansas

I saw "Capote" last night...for the second time this week. What took me so long? What a bravura performance by Philip Seymour Hoffman! Chris Cooper (as detective Alvin Dewey), Catherine Keener (as Nelle Harper Lee), and Clifton Collins (as Perry Smith) are pretty spectacular too.

"In Cold Blood" is the story of the murder of Herb Clutter and his family, in Holcomb, Kansas in mid-November 1959. They died one after the other in a matter of minutes...father, son, daughter, mother...each from a shot in the head with Richard Hickok's 12-gauge shotgun. The news of this horrific and violent crime spread quickly...stunning the 150 people of Holcomb and their 11,000 Garden City neighbors just seven miles away.

When Truman Capote arrived in town to begin research on the story, he was accompanied by his childhood friend, Nelle Harper Lee. She had recently finished her own blockbuster book, "To Kill a Mockingbird," though it had not yet been published. Harper Lee was there to help Capote with the interviews and the fact-gathering, and as his friend and companion.

Initially, the town was stand-offish from the little writer from New York, who dressed, talked and acted quite differently from everyone else in this remote Kansas town. Clifford Hope was an attorney who was handling the Clutter estate. Capote managed to wrangle a key to the Clutter house from Hope...that allowed Capote to look inside the house whenever he wanted.

This was shortly before Christmas. When Hope learned that Capote and Lee were not planning to return to New York for the holidays, he, and his wife Dolores, invited them over for Christmas dinner. Dolores Hope was a subscriber to the New Yorker. When Capote arrived he saw copies of the magazine and remarked, "Oh, you read the New Yorker, then you know all about my work."

In the days following the dinner, others in the community learned that the Hopes had entertained Capote and Lee, and had enjoyed the experience. Invitations began coming in. One of the first was to a party where the guests included Al Dewey and his wife, Marie. She had grown up in New Orleans, where Capote was born. The two of them hit it off, she invited them to come for dinner for her spicy Louisiana food...and soon Capote was fast friends with the Deweys.

Capote made several friends in Kansas during the years that he worked on "In Cold Blood", some of whom he kept in touch with after the work was done, and his book was published. Nine of them, including the Deweys, attended Capote's famous masked ball on December 5, 1966...an enormous bash at the Plaza Hotel to celebrate the success of the book and the end of Capote's work on it.

The party was the talk of the town in New York. Celebrities abounded...it was quite the event. It was also the talk of the town in Garden City, Kansas...for different reasons. Since Capote had paid for the soiree with profits from his murder story about the Clutters, it was widely criticized in  the Kansas community.

"In Cold Blood" earned Capote an estimated $2 million by the end of the week it was published. He got another $500,000 from Columbia pictures...at the time the highest price ever paid for film rights to a book. The movie deal also gave the author one-third of the movie's profits.

In 2006, Barnes & Noble reports that sales of "In Cold Blood" are up 30% from last year. The film "Capote" is up for five Academy Awards...with Philip Seymour Hoffman in the running for best actor nomination.