The case for doing business with friends
Don't assume friends do or do not want to work with you: Everyone should have the opportunity to say no.
Many people separate business from pleasure. It’s sound advice for avoiding workplace romances, yet not a good reason for eliminating friends as potential clients.
3 reasons for doing business with friends
Some people draw a line between their work and personal lives. Not necessarily a good idea.
1. Growth. It’s difficult to grow your practice if you focus on who you won’t accept as a client. Imagine if someone said: “I’m not doing business with women.” According to the US Census, they represent 50.6% of the US population, so your prospect pool would be halved. Suppose you won’t do business with left-handed people? They represent about 10% of the population. The average American is said to know about 600 people. Why take people who already know and like you off the table?
2. They will buy anyway. Imagine you sold copper cookware. You didn’t approach friends about buying cookware. Fine, they wouldn’t starve. But investments are different. Your friends have retirement assets. They need to plan for retirement. If you don’t approach them, it’s not as if they won’t invest at all. Off course they will invest!
3. The train wreck. Point two leads into this one. Suppose they get bad advice. They lose half their money! What will they do? They will come to you, of course! You are their friend. They trust you. You work in the industry. They will say: “Take over the account.” They will say “Can you make me whole again?” A 50% loss means you need 100% appreciation to get back to their starting point. The moral of the story is simple: If you are going to be called in when things have gone bad, why not get in on the front end and try to keep things from going bad in the first place?
6 reasons friends want to do business with you
We often focus on why friends don’t do business with agents they know. There’s another side to that story: They often want to do business with you.
1. Trust. You’ve earned it. That takes a long time.
2. Understanding. Financial planning questionnaires ask lots of questions. Only close friends know if they are proud or disappointed with their children. Friends know about the strength of their marriage. A person I interviewed said: “You understand the tapestry of their lives.”
3. Personal attention. They won’t be your biggest client, but they think they will get that level of service. Why? Because you are friends. You will end up giving it to them too.
4. Known quantity. Ever hear WYSIWYG? What You See Is What You Get. They know you and are comfortable with you. It’s not like a prospect meeting an agent for the first time.
5. Objective advice. Friends tell friends what they need to hear. You’ve had friends who are making poor relationship choices. They tell you. You share your advice. You don’t pull punches. “What were you thinking!” Friends know other friends will give it to them straight.
6. They like you. People do business with people they like. Simple as that.
There’s a compelling case for doing business with friends. You will be tactful, but don’t take them out of consideration. Everyone should have the opportunity to say no.
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