Think of social prospecting like fly fishing. You cast out. If you get a bite, that’s great! If not, repeat the process. Suppose you’re at a party. Everyone is talking about everything and anything. How do you slip in business without seeming like the stereotypical salesperson portrayed on TV?
The First Conversation Starter — Answering “How’s Business?”
Let’s look at three easy-to-use approaches. None of these are original. They’ve been around for years. You meet a lot of advisors in my line of work. They share ideas.
In the first scenario you are an advisor who works for a bank or whose firm is owned by a bank. The bank does lending and encourages cross-selling. You are chatting with another guest. You’ve been through where you live and what you do. They ask: “How’s business?”
You respond: “With all the talk about the Fed raising interest rates, I can’t believe we are still lending money at (X)%.” You quote the rate the firm offers on long-term fixed mortgages to people with sterling credit. You stop talking.
They might respond in one of two ways. The first is ignoring your answer or saying “That’s nice” and changing the subject. The second is a sign you’ve gotten them interested: “Is that rate on credit cards? Home mortgages? Borrowing against stock?” You pause for a moment and say: “I think I may be able to save you money. This isn’t the time or place to talk right now. We’re at a party. Let’s talk on Monday morning …”
Rationale: The attractive rate got them interested. You gave yourself a couple of days to brush up on mortgages, credit cards and asset-based lending. You’ll be prepared on Monday.
The Second Conversation Starter — Responding to “I Already Have an Advisor”
The second approach addresses the standard “I already have an advisor” roadblock. You are at another party. After leading with “Where do you live?” you’ve moved onto “What do you do?” Seconds after the words financial advisor leave your lips they’ve countered, I already have one.
I learned this approach from a restaurant owner with a relative who was a supplier in the food services business. Here’s the financial services industry version of his approach, once the other person has established they have an advisor: “I’m sure you are very happy with your current advisor. Here’s my card. If anything ever changes, please give me a call.” Move onto the next subject immediately. You aren’t asking for contact information of expecting their card in return.
Rationale: You’ve respected the existing relationship while positioning yourself as the alternative. You’ve changed the subject, so they don’t feel trapped.
The Third Conversation Starter — Make an Assumption and Go for It
The third scenario breaks one of the rules of selling, never assume a need. Here’s the scenario. You are at a family party. Uncle Henry turned up. He’s about 63, been with that big drug company since graduating college. He’s a scientist or in middle management somewhere. The assumption you are making is people working for decades at a publicly traded company probably get some of their bonus in company stock or options, the golden handcuffs. Gradually, the stock vests. It might never leave the firm’s records, so the risk of a concentrated position might be like the iceberg below the surface.
You approach Uncle Henry privately. You acknowledge he’s been with that big pharmaceutical company his entire working life. You know he believes in the company, because he’s always talking about the latest drug they brought out. Since he believes in the company and has been there for decades, he probably has a ton of his company’s stock in his 401(k) and company stock purchase plan.
Now for the $64,000 question. “Here’s something I’ve wondered: How do you protect yourself when you have so much tied up in one stock?” You stop talking.
He might have a couple of responses. The first might be; “Thanks for asking. Fortunately I have a concentrated stock position program at (firm).” They mention a prestigious private bank. The second answer has more potential: “You know, you’re right! I was just looking over my last quarterly statement. It’s grown quite a bit. I’m going to be retiring in the next two years. You know how to help someone in this situation?”
Rationale: By making a simple assumption their shareholding in the company stock has grown, you may have uncovered a concentrated stock position opportunity. There’s the issue of restricted stock to consider, but maybe Uncle Henry isn’t that high up. Better check.
Each of these scenarios addresses a social situation that occurs from time to time. In each case, you are offering to help. If they aren’t interested, it’s easy to take the conversation in another direction.
— Related on ThinkAdvisor:
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- When Clients Push Back on Pricing: 5 Strategies for Advisors
- Using Wine to Get Your Point Across to Wealthy Prospects
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,” can be found on Amazon.