Making friends within the high-net-worth (HNW) community isn’t as easy as making friends at the school playground. It gets more complex as we get older, but it’s not impossible. You need to learn to play by their rules though.
Before we look at the unwritten rules, be aware that everyone in sales considers everyone with money a potential prospect. Years ago, I mentioned to the director of a cultural institution that many people had an alarmingly direct way of approaching wealthy people for donations. Here is how it goes:
- You have money.
- We need money.
- You should give us some of your money.
Since HNW individuals are constantly asked for money, they become wary. A retired money manager once told me about wealth clients, “If they still have money, it’s because they have been careful about it.” This is why unwritten rules exist when it comes to developing relationships within the HNW community.
Rule 1: It takes time. If you are seeking to first build social relationships that might become business relationships, there is a long cultivation cycle. For this reason, you want to be cultivating many people simultaneously. Remember dating? Desperate people don’t get dates. If someone pushes too hard and too soon, alarm bells sound that there is something wrong. The opposite of desperate is successful. If you don’t push, you come across as successful. Successful people want to do business with other successful people.
Strategy: Have a large prospect universe and take the long view.
Rule 2: You must build trust. This takes time. As a retired advertising executive explained, “Trust is earned very slowly but can be lost very quickly.” Be a person of your word. If you say you are going to do something, exceed expectations. You have heard the expression, “Underpromise and overdeliver.” If you just met your neighbor and they asked to borrow your car, you would say no. If they borrowed tools from time to time and always returned them and gassed up your lawn mower before returning it, you would gradually decide they built up enough trust to let them borrow your car someday.
Strategy: Always follow through, even if you make a casual comment about sending something.
Rule 3: Their timetable, not yours. Some people assume wealthy people are sitting on a pile of cash. This often is not the case. They probably put their money to work. They might have money in motion when a property sells or a Treasury bill matures. You want to be the first name they think of when they need to do something. This is another reason why you want to cultivate a universe of social prospects.
Strategy: Stay on their radar. Be ready when they are ready.
Rule 4: Partially successful. People prefer doing business with people they like. Some of your friends will become clients. Others might string you along but never commit. Others don’t do business with friends. All these people can still be great friends and referral sources because the connection started as a social one. You should gain some new HNW clients, but not everyone will take that step. Partial success is still success.
Strategy: Do not base relationships on the logic, “Is there an order out there or not?” You can have friends too.
Rule 5: Think big. Look for large payoffs. This is what makes the cultivation of multiple people and the long timelines worthwhile. An advisor told the story of a prospect who was being cultivated. The prospect knew the advisor wanted business yet was not in a position to do anything substantial. He decided to “throw the advisor a bone” and hand over $3 million. To the advisor, this was a significant new account relationship. For the new client, it was small change! The large payoffs can also mean access into social circles and referrals.
Strategy: Asking for the order is an art. Look for enough money to show what you can do, but not so much they will need to disrupt other established relationships.
It takes time to cultivate relationships within the HNW community. They want to know you are interested in them as real people, not looking for your next sale.
Bryce Sanders is president of Perceptive Business Solutions Inc. His book “Captivating the Wealthy Investor” is available on Amazon.
For more ideas on working with high-net-worth clients:
- Read “Practical advice for growing your A-list” to find out how MDRT members find wealthy clients.
- Watch “How to address philanthropy with high-net-worth families” to find out how you can create recurring income and stand out from the competition when you address legacy planning. (Court of the Table and Top of the Table member exclusive)
- Read “3 surprising secrets about high-net-worth clients” to discover if you’re making some common but easy-to-fix mistakes in dealing with the high-net-worth.