Networking with the Affluent and their Advisors

Thomas J. Stanley

• Publisher: RosettaBooks
• Year: 2012
• ISBN:
  9780795325960
• Topic: Business
• Subtopic: Business Skills
• Index: Business

The New York Times bestselling author of The Millionaire Next Door reveals the secrets and strategies for building a network of wealthy clients. In Networking with the Affluent, business theorist Thomas J. Stanley shares effective tactics for developing relationships with wealthy individuals—as well as their advisors—and generating new business among this highly exclusive target market. Dr. Stanley provides a proven road map for building trust, securing interest, and forging profitable relationships with wealthy audiences—including tactics for boosting your credibility and assuring continued loyalty among wealthy customers. Networking with the Affluent covers:

• Cracking affluent groups
• Influencing opinion leaders of the affluent
• Gaining high-caliber endorsements
• Leveraging your contacts

"No one better illuminates the who, where, and how of the affluent market than Tom Stanley."—J. Arthur Urciuoli, Director of Marketing, Merrill Lynch

CHAPTER 1

INTRODUCTION

“You must give before you receive.”

WHAT IS NETWORKING?

Networking is the essence of high-performance marketing. It is the highest form of professional selling. Networking is influencing the people who influence the patronage behavior of dozens, hundreds, even thousands of affluent prospects.

Ordinary sales professionals target ordinary prospects. In sharp contrast, extraordinary networkers target prospects who are opinion leaders of affluent affinity groups. Imagine the impact on the revenue of an ordinary sales professional if he is endorsed by the president of a trade association whose members include hundreds of millionaires. In fact, such an endorsement was recently given at a trade conference.

How does an endorsement of this kind come about? The transformation of an ordinary sales professional into an extraordinary networker begins with targeting. The very best networkers identify and then prospect the advisors and role models of the affluent.

Numerous surveys of the affluent reveal a strong positive relationship between the level of an affluent person’s wealth and that person’s use of opinion leaders in selecting financial consultants, financial planners, bankers, insurance providers, attorneys, accountants, health care professionals, architects, home builders, artisans, and automobile dealers. In addition, opinion leaders have a significant influence on the choice of suppliers by affluent business owners and self-employed professionals. Supplier selection is typically associated with moderate to high risk. Hence, many members of the affluent population attempt to reduce the risk of hiring an incompetent supplier by choosing suppliers that opinion leaders endorse.

Eight years ago, frustrated by his low productivity, a young life insurance agent considered changing his occupation. But, luckily for his company, he never stopped making sales calls. And today he is at the very top of the productivity scale. How did he achieve this radical changeover? He will tell you that the most important call he ever made was to the president of a trade association with several thousand wealthy members. The agent gained the president’s endorsement, and today his clients include more than 150 members of the trade association. How did he gain the president’s endorsement? Not by immediately attempting to sell the president life insurance. The agent’s initial proposal was to help the president meet his obligations to the membership of the trade association.

There are many ways to influence the opinion leaders of the affluent. This book discusses eight roles that networkers can play in influencing the influential. During their entire careers, most networkers play only one or two of these roles. However, a truly gifted networker described in this book plays all eight roles.

Some Basic Premises

Several basic premises should be comprehended before one attempts to network with the affluent:

1. Most affluent people are members of one or more affinity groups. These groups include trade associations, professional societies, retiree/senior citizen/mature citizen organizations, ecologically defined associations, political groups, and alumni associations.

2. Information about the quality and integrity of suppliers, including referrals and endorsements, diffuses much more rapidly within a group than between groups. In other words, the speed of intragroup word-of-mouth recommendations is many times faster than the speed of intergroup communication. The best networkers cultivate intragroup referrals and endorsements. Consider how long it would take the average sales professional to meet with 300 affluent prospects. The most optimistic observers would say months; others would say a year or more. But a sales professional was recently introduced to 320 affluent business owners in 2½ days. The president of a trade association made these introductions.

3. The affluent market segment is growing seven times as fast as the household population in this country. Dollar for dollar, the most productive way to penetrate the affluent market is to network with its members, their advisors, and key members of their important affinity groups. In spite of these facts, more than 90 percent of the sales and marketing professionals who target the affluent do not network. Why? Most of these people do not know how to network. Others are too impatient to network.

4. High-performance networkers gain endorsements for reasons that go beyond the basic product or service they offer. They do extraordinary things. For example, many enhance the revenues of prospects. In other words, they sell the prospects’ products. They give this help before asking prospects to become clients. The affluent will go out of their way to endorse you if you do extraordinary things for them. Eight categories of these extraordinary things are described in this book.

5. High-caliber networkers focus their efforts. They first target those who will give the greatest return. Directly analogous to this networking approach is a military example. Sergeant Carlos Hathcock (USMC) was our nation’s top marksman in Vietnam. Early one morning on patrol, he discovered 150 NVAs marching in an open valley. Who was the target of his first shot? The leader of the group. His elimination had an immediate and profound psychological effect on the other NVAs. During the three-day battle, Sergeant Hathcock and his companion, Corporal John Burke, were then able to eliminate most of the members of this affinity group. (See Charles Henderson, Marine Sniper [New York: Berkley Books, 1988].)

THE EIGHT FACES OF NETWORKING

Networkers can influence the influential in eight ways. This book discusses these eight faces or dimensions underlying influence networks. The following chapters contain case studies of some of America’s top-rated networkers. Most of these networkers employ more than one of the eight dimensions. However, each is classified according to the major dimension of influence that he or she utilizes. The extraordinary networker described in Chapter 8 actually employs all eight dimensions. However, his major dimension of influence is that of someone who saves considerable money for clients and prospective clients. He does so by negotiating the purchase of expensive automobiles and homes for them.

Face One: The Talent Scout

Most affluent individuals are either successful self-employed business owners or self-employed professionals. They are in constant search of quality suppliers. Now consider for a moment the number of quality suppliers that sales and marketing professionals prospect. Productive networkers come into contact with hundreds, even thousands, of suppliers each year.

Why not act as a Talent Scout for clients and prospects? They will appreciate the efforts of networkers who play this role. However, truly enlightened networkers focus their energies when playing this role. They provide Talent Scout services to people who influence large numbers of affluent prospects. By targeting in this way, a young sales professional recently gained the endorsement of a millionaire who headed an important trade association.

This sales professional, a financial consultant, successfully targeted important opinion leaders who represented the most affluent industries within his trade area. How was this accomplished? He established an “Industry Advisory Council” that provided top-notch speakers to these affluent affinity groups free of charge. The “Council” also made available the names of top-ranked suppliers/industry experts to members of the trade association. The experts he provided included leaders in such fields as advertising, estate planning, commercial real estate, marketing, public relations, production management, and materials procurement.

How was this sales professional rewarded for referring these top suppliers to industry leaders and other prospects and clients? His revenue was enhanced, the main topic of Chapter 3. The suppliers felt indebted to him, and many of them became his clients. Within 14 months, he was no longer a six-hour-per-day, cold-calling, low-level producer. He is now viewed as a Talent Scout and investment expert by members of one of the most affluent affinity groups in America. Most recently, he was asked to manage the investments of a trade association that represents thousands of affluent members.

Chapter 2 contains several important concepts regarding the way in which a high-grade networker generated significant sales volume via the Talent Scout strategy. In addition, a portion of Chapter 8 details the Talent Scout activities of the Ace of Aces of Networking. His list of talent suppliers has 80 categories!

Face Two: The Revenue Enhancer

What is the most powerful method of influencing those who influence many other affluent prospects? As a general rule, it is the dimension of networking called “revenue enhancement.” Ask most successful business owners, professionals, and other self-employed prospects this simple question: “What is your number one need?” Most will answer, “Revenue enhancement.” Given a choice, would these prospects prefer to patronize a supplier who provides only a core product or service—that is, the basic or conventional offering—or one who provides more than the core?

Dull, normal truck dealers offer only trucks; unenlightened accountants offer only accounting services; run-of-the-mill attorneys offer only legal advice; and so on. Truly gifted suppliers, however, offer more than the core. For instance, consider the truck dealer who goes out of his way to find business and customers for his clients. Also note the business generated by Father Fred, a construction equipment dealer who lives by the networker’s creed: “You can’t sell construction equipment to contractors who have no contracts.”

Father Fred is a master of networking via the revenue enhancement mode. This strategy accounts for a major portion of his own revenue. Prospects have sought him out. Influential clients have gone out of their way to refer business to him. Why? Because he enhanced their revenue. He is in constant contact with major contractors who employ his customers. Most of Father Fred’s customers are subcontractors. On their behalf, he debriefs contractors about their needs for subcontractors. Thus, Father Fred creates his own demand. He enhances the demand for his clients’ offerings. In turn, the enhanced demand for those offerings enhances the demand for Father Fred’s construction equipment.

There are thousands of equipment dealers in America. But there are only a few Father Freds. If you needed equipment, what type of dealer would you seek?

Revenue enhancement is not limited to the construction industry. Look at the case of a truly enlightened auto dealer in Texas. To target top sales professionals from the investment industry, he networked with a regional sales manager from a brokerage firm. The sales manager referred his top producers to the auto dealer. Why? Because the auto dealer enhanced the sales manager’s revenue.

The auto dealer not only referred his top suppliers to the sales manager. He also sent the sales manager the names of people who had recently been awarded major construction contracts in Texas. Almost all of these winners had bids in the over $1 million category.

How did the auto dealer obtain this information? He once asked a euphoric customer why the customer had purchased a top-of-the-line model. The answer was quite simple: “I just won a major construction contract!” He then asked the customer another question.

AUTO DEALER:

Sir, is there any publication that lists all of the people in your business who won construction contracts?

CUSTOMER:

Why, yes. Read “The Big One” section in the weekly publication called the Texas Contractor. It lists a dozen or more big winners each week!

Not far from the city where this took place, another revenue-enhancing networker, a young financial consultant, recently landed a $15 million account. His client was the owner of a successful welding company. When this financial consultant first visited the owner, what did he say?

Two of my most important clients own hundreds of oil-drilling platforms. They are looking for a welding company to service their platforms. I would like to put you in touch with them.

Both owners of oil-drilling platforms did, in fact, hire the welding company. And in turn, via the revenue enhancement strategy, the owner of the welding company opened a major account with the financial consultant.

In another case of revenue enhancement, a young sales professional enhanced the business of major suppliers to the food industry. These suppliers included leading industry experts on such matters as advertising, public relations, marketing, business valuation, estate planning, production planning, and commercial real estate.

How did the sales professional identify these experts? They all published articles in the top food industry trade journals.

When the sales professional in this case first prospected owners of food companies, they often said, “At the moment I don’t need what you’re selling.” His response was quite simple: “What are your most pressing needs?” If the prospect stated that he needed an advertising agent, the sales professional made a referral to the advertising agent who was published in the trade journal. The advertising agent reciprocated by opening an investment account with the sales professional and by referring his food industry clients to the sales professional.

The top networker who employs revenue-enhancing strategies once stated:

The most important thing you can do to convert a prospect into a client is to say: “Give me a stack of your business cards. I have many clients who are likely to buy from you.”

Revenue-enhancing methods are simple, logical, and highly productive. Why, then do sales professionals use them so infrequently? Because these professionals lack empathy for the real needs of prospects. Fortunately, that empathy can be acquired. Revenue enhancement is the central topic of Chapter 3.

Face Three: The Advocate

The affluent in America typically agree with the following statement: “Although thousands of well-qualified accountants, attorneys, architects, financial consultants, bankers, and other types of professionals can provide basic services, few of those professionals have demonstrated any interest in supporting the causes that are really important to me.”

The two service professionals described in this section are skilled in their respective disciplines. However, their success in generating endorsements from key patronage opinion leaders is explained not only by their core skills but also by their advocacy of the needs and rights of their targeted audiences.

Mr. Alan is a successful financial consultant. He helps clients and prospective clients by providing them with quality financial advice and investment management services. But he also plays the role of Advocate. Take a recent situation as an example.

One of Mr. Alan’s best clients is a timber grower. This client owns thousands of acres of high-grade forest and periodically harvests timber from various tracts. But the client’s livelihood is being threatened. Mr. Alan discovered this because he is a strategic reader of the editorial sections of both local and national newspapers.

Recently, he read a letter to the editor of his metropolitan newspaper that proposed banning the harvesting of timber in the state. This completely one-sided letter was written by an advocate of woodpeckers’ rights. The letter stated that keeping woodpeckers ...