Few things are more frustrating than investing the time to network with prospective clients without any results to show for your efforts. Over the years, I have heard many financial advisors complain about the lack of results from networking. But there is good news: a few simple steps to rethink your expectations and change your approach can dramatically improve the outcome from your networking activity.
Four conversations I’ve had in the past month have brought these complaints into sharp focus:
1. A financial advisor joined the chamber of commerce in his community a year ago and has attended three meetings since. Despite striking up conversations with other members, he has struggled to convert this effort into a discussion of his work as a financial advisor. “The people I run into,” this advisor says, “are much more interested in talking about what they do and pitching their business than asking what I do.”
2. A successful producer in the life insurance industry was asked by a client to buy a ticket for a fundraising reception for a high-profile politician. The result: “The cost of the event was more than I would normally spend, but I agreed because I thought that it would be a chance to connect with the serious money in my community. This was a big disappointment. I tried to engage with the people there, but most of the guests seemed to know each other and spent the two hours of the reception chatting with people they already knew. And when I tried to join in these conversations, it was quite uncomfortable – I very much felt like a fifth wheel.”
3. A chartered financial analyst and MBA student at the University of Toronto, where I have been teaching for many years, recently attended a lunch put on by the local chapter of the CFA Society in the hopes of meeting prospective employers. His comment: “Rather than meeting people who could potentially offer me a job, most of the attendees I spoke to are analysts at investment firms trying to connect with employers themselves.”
4. A student with a background in human resources (HR) who attended a meeting of the local association for HR professionals made a similar comment: a disproportionate number of the attendees were job hunters rather than those in a position to provide leads on getting jobs.
There are three major reasons why these networking efforts failed:
First, in all but one instance, they were one-time efforts. Even the advisor who attended three chamber of commerce meetings did so over a 12-month period.
Second, within the networking events that were selected, there was limited opportunity to engage in a longer and more in-depth conversation that would create the opportunity to get to know another attendee better – and to allow them to get to know you better in return.
Third, in all four cases, the participants clearly were motivated by short-term self-interest. It wasn’t the topic of the meeting or the cause that attracted them; it was the opportunity to get leads for new clients or for jobs.
Fortunately, there are cases of successful networking that we can learn from. When advisors have been successful in attracting prospects through networking activity, there are five common themes:
– Theme 1: start with the right mindset
The first thing that you need to understand if you aspire to attract clients via networking activity is that you need to be in it for the long term, suppressing your instincts to try to get short-term business.
In a video I made recently for www.investmentexecutive.com, a former president of a local Rotary International chapter told me that new members have to prove themselves before existing members will be inclined to do business with them.
Many of us have had the experience of seeing someone at a meeting whose goal seemed to be to hand out and collect as many business cards as possible. Not only does that smack of desperation, but nothing will turn other people off faster.
– Theme 2: pick the right cause
Given that you have to work at your networking efforts for at least the medium term to get results, choose a cause that you’re passionate about. Unless the cause is one for which you can summon up enthusiasm, you won’t be able to sustain continued commitment. And that enthusiasm has to pertain not just to the cause itself but also to the other people who are involved. You won’t see returns in the form of new business unless you like spending time with the group’s other members.
Establishing a common bond with other members of your group is highlighted in an article in the New York Times by Laura Holson entitled “How to find a job with meditation and mindfulness.” The article describes how having a common interest in meditation led to successful networking among high-tech entrepreneurs in Silicon Valley and a disparate group of young professionals in Manhattan.
Along similar lines, New York-based Merrill Lynch & Co. Inc. encourages advisors to pursue “passion prospecting,” in which they seek out groups that share their passions.
– Theme 3: take a leadership role
In talking to advisors who have turned networking activity into clients, perhaps the most common theme is that those advisors took leadership roles in the organization they had selected. Few organizations will turn down an offer to volunteer on the fundraising or membership committee and, in the process, you’ll establish your credibility and build deeper bonds with the other members of that committee.
An advisor who worked with two auto dealers offered to be on a committee that organized the annual auto dealership golf fundraiser in his community. As a result, he got to know other dealers on personal terms, something that over the course of several years (remember, this takes time), led to auto dealers being a core niche in this advisor’s practice.
Another student of mine who holds a chartered financial analyst designation has used a similar strategy. Rather than simply attending meetings, he offered to serve on the committee for young members. This student ended up getting invited to interview with a firm at which another member of the committee worked, and was offered a job as a result.
– Theme 4: focus on quality over quantity
Rather than belonging to three or four organizations and attending meetings sporadically, you’re better off to pick one organization and really get involved.
When you go to an event, rather than try to talk to as many people as possible, your goal should be to have in-depth conversations with two or three of the right people.
It’s those continuing conversations that build trust and rapport. One advisor described to me how, years ago, he and his wife had sprung for a one-week cooking class in Italy organized by a boutique travel agency. Even though there were only 12 participants, several became clients as a result of building bonds over that week.
As another example, last spring, an advisor I know who is an avid cyclist joined a high-end cycling club. As a result of this advisor chatting with other cyclists on their weekly rides, a couple of those members have begun talking to the advisor about moving their accounts over to him.
– Theme 5: convert contacts into leads
Networking can only create a predisposition to do business with you. In most instances, you still need to find a way to invite prospects to make the final step.
The good news is that once you’ve built a foundation of trust, rapport, credibility and likability, that final step can be surprisingly easy. The key is to have a low-pressure method to send a signal to people you’ve come to know regarding your interest in doing business. For example, offer to add your prospects to your invitation list for client events or for your regular newsletter.
Of course, not everyone will say yes – this is, after all, still a numbers game – but by building the foundation through the right kind of patient activity in the right organizations, you can, over time, attract new clients to your business.
Dan Richards is CEO of Clientinsights (www. clientinsights.ca) in Toronto. For more of Dan’s columns and informative videos, visit www.investmentexecutive.com.
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