Friends can make great clients, but it can be awkward to bring up business and ask them to take that step. Plenty of emotions get in the way. The advisor worries the friend will take offense and a crack will develop in the relationship. The friend might assume they are going to be asked someday and are dreading the moment because they don’t know what to expect. Here are three ways you can take the drama out of the situation.
Strategy #1: Increase Their Awareness
A New York advisor made a great observation: “Friends may have wanted to do business with you for a long time. The thing they haven’t figured out is why they need you.” The first step to getting them onboard might be to let them know what you do.
There are many ways to do this, but a simple strategy is to find a moment when both of you can spend a few minutes together without any time pressures or interruptions. These come up all the time.
Take an interest in their career. “Bryce, we have known each other five years. I know you work at (firm). It has something to do with (field). Something I’ve always wondered is “What do you do?” Stop talking. People like talking about themselves. They take center stage. It puts them in a good mood. They often tell an upbeat story.
When they are done, move to the next stage. They might make this easy, asking you to tell your story. They might be uneasy because they are expecting a sales pitch. Try a different approach. (This isn’t mine, but I like it a lot.) “We have known each other five years. You know I work at (firm). When you tell others about me, what do you say that I do?” Stop talking.
This creates an interesting situation. It’s highly likely they have never told anyone about you in a professional context. They cannot say that. It’s too rude! They will likely say: “You are an insurance agent” or “You sell investments.” It’s the first thing that comes to their mind.
This is your opportunity! Say something like: “That’s part of what I do. I do other things too” or “That’s what I used to do before I joined (firm). Now I do…” You tell your story briefly in the context of how you might help them.
Now they are waiting for the close. Actually, they are dreading the close. Let them off the hook. “Now that you know what I do, if you know anyone you think I might be able to help, please let me know.” By moving the conversation into the “third party stage” the tension has been removed, despite the fact you positioned how you can help them.
Strategy #2: Winning Them Over
Drip marketing has been around for years. There are plenty of ways to do it, but here is a simple one you can use with friends. When they ask: “How’s business?” in social situations, hear their question as “How have you helped someone today?” Share a brief, anonymous story. The shorter the better. Gradually, they learn about the range of your services. They might think: “Can you do that for me? Maybe I should ask.”
There’s a potential problem: Maybe you haven’t solved someone’s problem recently. Hear the question as: “How did you help a person avoid making a mistake?” They might have wanted to pull money out of a retirement account before age 59½, incurring penalties. You showed them it was a bad idea and gave them an alternative solution. The friend might think: “I know someone about to make the same mistake: I will be doing them a favor if I connect the two of you.”
Strategy #3: Asking For Business
This strategy is for the client currently working with a competitor. The strategy is to forget the friendship element entirely. Approach them as you would an institutional investor with a pension fund or foundation. Be serious.
1. Acknowledge the ongoing relationship. You mentioned you work with (firm). You use their professional money management service. We offer those too. We are competitively priced. We have good performance figures.
2. Ask to be entered into consideration. When do you review the performance of those managers at (firm)? I’m interested in winning some of your business. Are you open to presentations about outside managers at that time? (Translation: Can I see you a day or two beforehand?)
3. Deliver your professional presentation. Sales is an art. You need to ask for enough to show what you can do, but not so much that it disrupts the current relationship.
4. Wait and see. You are fresh in their mind. Their current advisor reviews performance. They will want to rebalance. Money is in motion. It is easy for them to take the sell recommendations, but not the buy recommendations. They have freed up cash.
5. Do a good job. Now you have established a foothold. There is an initial relationship. Do an excellent job and provide great service.
Approaching friends for business does not need to be awkward.
Bryce Sanders is president of Perceptive Business Solutions Inc. He provides HNW client acquisition training for the financial services industry. His book Captivating the Wealthy Investor is available on Amazon.