3 Secrets to Doing Business With Wealthy Friends

Commentary July 01, 2024 at 10:53 AM
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What You Need To Know

  • Offer low prices or a unique service.
  • Quietly see what specific problems the wealthy friends have.
  • Offer solutions only when you see a real need for what you offer.
A sailboat on a beautiful sea

So far, so good.

You are doing all the right things when it comes to social prospecting. You have joined several community organizations. You met people with the potential to be great clients.

They know what you do. They aren't doing business yet. What are some of the obstacles?

1. Rich people form relationships first.

Wealthy people have plenty of needs. They also have plenty of people calling or approaching to sell them something. If you want to get the wealthy as clients and have immediate results, there is a simple solution: Be cheaper than everyone else. It works for Wal-Mart.

If you want them to pay full price, then you need a different approach.

Strategy: Get close to them. As you get to know them really well, you'll learn their needs. Ideally, the more specific or specialized the need, the better. Approach them for business in the context of that need.

Conversation example: "From our previous conversations, I've realized that there's something bothering you. You have a problem." (Give details.) "I've thought long and hard about this, and I think I may have a solution." Stop talking.

2. Their timetable, not yours.

You want new clients right now, not sometime down the road. You cannot pressure them to conform to your timetable. You might have informal conversations where they ask the right questions, but don't take the next step. You can't say: "Are you going to do business or not?"

Strategy: You need to have many, many prospects. I have heard this described as similar to a griddle cook in a diner. You have lots of orders on the grill at once. Something is always ready to come off. Ideally, you can make it timely.

Conversation example: I know you've been asking about setting up a college savings account for your grandson. You told me the money is sitting in your money fund. Even if the money isn't invested and simply earns interest, that's taxable to you as long as it stays in your name. Once it's in an account for your grandson, it's taxable at their bracket, which is probably zero. This makes the case for acting sooner rather than later.

3. Image in the community.

Word gets around. If you ask everyone you know to become a client, soon people will start to avoid you.

We knew a property developer who was world-class at asking friends to donate to charity. It was understood "If he asks you out to lunch, it's going to cost you money." People start to avoid you.

Strategy: Most people don't want to get together for coffee and "talk business" unless it's their business, the one where they get paid.

Have you ever been asked for a meeting and then realized they were asking you for your business? I have. To have a valid reason to offer a solution, you need to have identified a need, also called a "pain point."

Conversation example: Thanks for joining me for coffee. We've been friends for a long time. For the next five minutes, I'm going to take off my friend hat and put on my business hat. Why? Because I think I have found a way that I may be able to help you.

Your new connections are friends because they like you. They often want to do business, but it needs to be on their terms.

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