by: Matt Oechsli
If you’re serious about targeting today’s affluent investor, it’s time to get social. We’ve become addicted to our digital toys (iPads, BlackBerrys, etc.), and social media is elbowing onto center stage. Our research tells us today’s affluent want to know their advisor on a social level in addition to their professional role.
Because the human species is such a social animal, you wouldn’t think this would be an issue for advisors. Yet many advisors are behind the curve when it comes to socializing with affluent clients, referral alliance partners, and prospects. Our research shows that investors clearly are more likely to introduce someone they know to their advisor if the investors have both a business and personal relationship with the advisor, as opposed to a relationship that was exclusively business.
Our research also shows that elite advisors intuitively recognize the importance of social media technology, and they’re early adopters. It’s the essence of both relationship management and relationship marketing. Today’s reality is that advisors who have both a business and a personal relationship with their affluent clients have more centers-of-influence penetration.
This data reinforces what we’ve learned from our rainmaker research—social prospecting in affluent circles today is what cold calling was some 25 years ago; it’s what public seminars were about some 15 years ago. And yet, at a recent workshop we sponsored on best practices of elite advisors, it was obvious that socializing in affluent circles made some advisors uncomfortable. Among the questions: “When do you talk about business? What social activities should you engage in?Do you mean that we’re supposed to mix business with pleasure?”
Socializing is directly linked to word-of-mouth-influence (WOMI), and advisors need to understand the importance of WOMI in affluent decision-making. It’s the high-octane fuel that activates the process; relationship management (affluent clients) and relationship marketing (penetrating affluent COIs) are inextricably linked in stimulating positive WOMI. This is a gift. Why? Because advisors can now schmooze with their top clients, meet their friends in a non-threatening environment, develop rapport, build personal relationships, and transition their clients’ friends into new clients. Knowing “who knows whom” is what mapping your affluent client’s social networks is all about.
Social network analysis
A quick glimpse into the budding field of social network analysis highlights the innate power of WOMI. Social network analysis, the study of social relationships between individuals and groups, goes back to the ancient Greeks. Modern theories arrived in the early 1900s, and today scientists study its implications in everything from relationships within high schools to the spread of disease.
We find this fascinating. Think about your web of contacts for a moment and ask yourself four questions:
1) If you were to chart your relationships with your top 25 clients, how many have both a business and personal relationship?
2) If you were to chart your social contacts, how many total connections could you list? How many have the means to conduct business with you?
3) If you were to chart your referral alliance partner relationships, how many connections could you list?
4) What type of branding is being broadcast through your social network?
Connected, a book by Drs. Nicholas Christakis and James Fowler, shares an example of how social networks play a role in marketing. They tell a story of two piano teachers in Arizona who grew their respective business only through WOMI; they never advertised or promoted their services. At the end of the year, they analyzed their clientele and discovered that 38 percent of their new business came by WOMI from people that hadn’t personally used their services. Their reputation was communicated through friends of friends of their clients—three degrees of separation.
Whether you have 25 or 125 affluent clients, imagine the power of WOMI within your business. Essentially, social prospecting is simply socializing with your affluent clients and prospects in venues that you enjoy, but with strategic intent. The idea is not to discuss business. However, whenever a business conversation surfaces, the social prospecting drill is as follows: listen; if asked, answer questions briefly; gently table that topic for another time; exchange cell phone numbers; set a time and place to discuss business; and continue socializing.
Elite advisors have turned mapping their affluent clients’ social network into an art form. If you allow yourself to get social, you can, too.