Better Business: Holiday networking

Bryce Sanders, president of Perceptive Business Solutions, reveals how advisers can attract clients over the festive period.

“Dear Father Christmas,” your letter begins, “Christmas morning I would like to find my stocking stuffed with new accounts from wealthy, pleasant individuals.”

It is not that easy, but the holiday season can be an ideal time to meet people who could be ideal clients. Assume your country club has a party, the town symphony does a holiday concert, the tree is lit in the common and most community groups have some sort of celebration. The entire month of December could be a continuous networking event.

Why make the effort? You have worked all year. Should the holidays be a time to relax with family and relatives or hang out in the pub? No. You have an ideal type of client in mind. They are probably successful business owners or professionals. Maybe they are wealthy landowners. Eleven months of the year they are cocooned inside their own social circles and private clubs. In December they are part of the general community at church or religious events, New Year parties and community fundraisers.

1.  Who are these people and where can you meet them? You probably know the 200 or 300 people in your area that could be ideal clients. Some are friends or acquaintances. Others you have never met. Look over the list of community events taking place in December. Review the invitations you get in the mail. Where are you likely to meet these people? Some events are free. Others will cost money.

2.  Do some research. You have a pretty good idea who you want to meet before you attend an event. Study up on them. If they are a managing director at a publicly traded company, read the press releases on their website. Look at recent earnings statements. What are their other community activities? What have those organisations accomplished? Have they made major publicly recognised donations? Assume you hope to meet five people at an event. Know three or four impressive facts about each.

3.  Dress well. I recall a quote from GQ magazine years ago: “It’s a lot easier to get to where you want to be if you dress like you are already there.” Look confident and prosperous. A New Jersey financial adviser explained: “People make initial judgments based on the top foot and bottom foot of a person’s appearance. Combed hair. Polished shoes. Successful people want to do business with other successful people.”

4.  Arrive and observe. When you arrive, assume you are there for the duration. This is a relaxed social event, not a mob hit. Plan to “work” while having fun. Do not walk up to your target immediately. Observe and learn how people have conversations. Are they “in the mood” or just “in the room”, meaning they had to attend and cannot wait to leave. If a group of people has members joining and leaving constantly the conversation is probably light. If three people are talking in hushed voices for 15 minutes, it is probably business. They do not want to be interrupted.

5.  Make your move. Put on your engaging smile, walk up to the person you want to meet and introduce yourself. When approaching strangers a compliment can be an effective icebreaker. ‘Lord Smith, you don’t know me. My name is ____. I just wanted to say that’s a wonderful tree you donated for the village common tree lighting ceremony. Has your family always donated a tree?” Stop talking. The object is to get them talking. Silence is awkward. We are tempted to fill the void. Let them ask questions.

6.  What do you do? You have introduced yourself, complimented the person, made small talk and shut up. What usually happens next? Often they ask: “What do you do?” We have all heard replying “I’m a financial adviser”:

• Makes the person feel awkward
• Causes a silence to fall on the group
• Clears the room

Vary the approach. First, some background for the current environment. After more than two years of a difficult market everyone who works with an adviser knows if they are any good or not. Use this to your advantage. When asked “What do you do?” You might respond: “I’m a financial adviser at (firm). You probably work with a financial adviser already.” Stop talking. It is likely they will reply “yes”. England is not America where people volunteer details – “yes” may be all you get. You might reply: “It’s been a difficult two years in the market. People are relying on their advisers for advice. If your adviser is there when you need them, answers questions and returns calls quickly, these days, that’s about as good as it gets.” Stop talking. If they say “yes” and tell an anecdotal success story, congratulate them on having a good adviser. Change the subject. In my opinion their adviser has earned that client. If they say: “No, not even close” and say unflattering things about their advisory relationship, there may be opportunity there. Do not be pushy. A tactful response might be: “In that case there may be room for improvement. This is not the time or the place to talk now. If you let me have one of your cards I can give you a call at your office tomorrow.” If they are not interested this gives them an “out” by discovering they have no cards. Afterwards you offer one in return.

7.  Returning from the world of fantasy. It is unlikely step six happens that easily. In the real world you talk about other stuff. As in dating, the object is to find common interests, establish your value and build on those interests as a reason to see them again. Passions and hobbies consume a person. They cross class structures. Wine appreciation and gardening are good examples. An adviser from Northern California explained it is easier to get information if you volunteer some first. “I’m a wine fan. What do you do for fun?” Find their passion and get them talking.

8.  Talking about the season. It is the holidays. That is often the direction the conversation takes. Assuming they know you are a financial adviser I think the theme for 2009 is being grateful. Using US market numbers back on 9 March, 2009 the Dow Jones Industrial Average (DJIA) stood at 6,547. The news media explained all the gains back to 1997 had been erased. As of 19 November the DJIA closed at 10,332. We are up almost 58% in eight months.

Many equity investors have opened their statements for seven months (until September) and seen increasing values. We have a lot to be grateful for this season. You might mention what things were like last year.

The DJIA closed out 2008 at 8,776. We were seeing days with 600 point moves in the market. What a difference a year makes. Think about other reasons to be thankful in the community or your own life.

9.  Addressing awkward questions. You finish making your case in step eight and someone says. “Well, I missed the move in the market. It’s too late now.” You might mention if the DJIA topped out at 14,164 and it is about 10,332 now we still have 3,832 points to go before we reach the previous high. That is about 37% away from where we are now.

“So where do you think the market is going?” There are a lot more risks than rewards in answering this question. Consider a simple answer: “Many people believe over time the economy will grow, banks will lend and consumers will spend. Assuming you consider the stock market a predictor of future earnings it tends to rise in that scenario. Do you believe in one, three or five years from now the economy will be doing better than it is now?”

10.  Getting the conversation back on track. If they are getting all this advice for free, why will they become your client? Make a tactful suggestion. “The New Year is a time of reflection. We make resolutions, examine what we did last year and what we might do differently this year. Many people review their portfolio and consider the relationship they have with their financial adviser. Were they there when you needed them the most? You are probably very happy with your adviser. Here is my card. If anything changes, let me know.”

11.  Wrapping up the conversation – establishing interests in common. You might say “You Americans! I would never be as forward as step ten!” Fine. Build a relationship by getting to know this person socially. At the end of the evening say: “I really enjoyed meeting you. We share a lot of interests in common. I would like to keep in touch. How do I do that?” Stop talking. It is likely they will offer a business card or write an e-mail address on a napkin. My favourite response is to take a business card, write “Bryce and Jane” along with our home phone number and present the card handwritten side forward.

12.  Seeing them again. Like dating, you need to make the first move. If you share an interest like wine or tennis, call with a specific invitation. If they belong to the same organisation call before the next event and suggest meeting there and going out afterwards. Develop a social relationship and let them get comfortable with you. You can transition the relationship from social to business down the road.

Bryce Sanders is president of Perceptive Business Solutions and provides HNW client acquisition training for the financial services community.