Doing business with friends: The $10 bottle of wine scenario
The objection “I don’t do business with friends” is often a deterrent that stops us in our tracks. Let’s look at it from a different point of view.
Many agents and advisors are hesitant approaching friends for business. They rationalize their reluctance as: “They work with someone else already” or “They know what I do. If they were interested, they would ask.” Let’s not forget “I don’t want to risk to the friendship.” That logic is often wrong.
The $10 bottle of wine
Let’s look at the first of two examples. Suppose you are a wine fan. Your friends are too. You discover this great bottle of Cabernet from California. It tasted just like that fifty dollar bottle someone served at dinner. It was delicious! Would you tell your wine-loving friends about it?
The answer is, “Of course I would!” The logic is simple: They would want to know. It would be a benefit to them, and they would enjoy it. I made a good find and I want to share it with people I like.
Professionally speaking, you are that $10 bottle of wine. You are prepared to do a great job for a total stranger and build a long term relationship. However, you aren’t prepared to bring these same skills to your friend’s doorstep, because you assume they won’t be interested.
Shouldn’t they at least have the opportunity to hear you out and decide for themselves?
The world’s smartest investor
This is a story I’ve been telling for a long time. The implied objection “I don’t do business with friends” is often a deterrent that stops us in our tracks. Let’s look at it from a different point of view.
Think hard — in your opinion, who is the smartest investor in the world? Likely it’s a household name with celebrity status. Now, suppose this well-known investor decided he would take on 250 retail accounts. The minimum investment was modest, maybe $ 250,000. One person was hired to find those 250 people. That’s you.
Suppose this development was big news. It was reported on TV and in the newspapers. Now suppose you approached a friend and asked them if they wanted to be one of these 250 people. Do you think they would say: “I’ll admit it’s tempting. That’s the smartest investor in the world. But I think I’ll pass. You are my friend and I don’t do business with friends.”
That’s highly unlikely. They would likely jump at the opportunity. They would also insist you extended the same offer to their family members too. They would remind you of your longstanding friendship. Guilt would play a part, as they would imply you had an obligation to let your friends in first, before opening it up to the general public.
Why might this happen? Because you have something they want. If you look at the providers represented by your firm, especially in the area of investments, you might not see the “smartest investor in the world,” but you will probably see some other pretty smart money managers with name recognition, either under their own name or their firms. This could provide the groundwork for making the same type of approach to your friends, although you must consider suitability.
“I don’t do business with friends” is an excuse that works both ways. That doesn’t need to be the case.
Bryce Sanders is president of Perceptive Business Solutions Inc. He provides HNW client acquisition training for the financial services industry. His book, “Captivating the Wealthy Investor” can be found on Amazon.
READ MORE: