The power of low pressure

THE IMPORTANCE OF PATIENCE

The first conversation was with a highly successful advisor in Montreal who works at a bank-owned firm; let’s call him “Alex.”

In 2004, Alex met with a successful entrepreneur. Although their initial meeting went well, this prospect never responded to followup calls. After a few attempts to reach him, Alex effectively wrote him off.

Recently, Alex was more than a bit surprised to get a call from this entrepreneur, now 66, who is in the process of selling his business for several million dollars. He wanted to meet to discuss how to invest the proceeds and to talk about estate planning issues. It turns out that this prospect had been left on the list for Alex’s monthly market emails by accident. After two meetings, the prospect signed on as a client, with an initial investment of $3 million.

“If we had been still mailing out newsletters,” Alex says, “there’s a pretty good chance that at some point, this guy would have been deleted from the list as a waste of paper and a stamp. The only reason he was still getting our emails is that there’s no cost associated to them.”

There are three important lessons here:

1. People decide to work with you on their schedule, not yours. Even though Alex was ready to work with this entrepreneur eight years ago, the entrepreneur felt the need to do something about that only now.

2. You need a vehicle for staying top-of-mind with potential clients in a way that doesn’t put them under stress or pressure.

3. Sometimes, you have to be very, very patient.

In the 1990s, I had invited legendary Merrill Lynch & Co. Inc. advisor Dick Greene to Toronto to speak at a conference I was hosting. For years, Greene had been the top producer among Merrill’s 15,000 brokers. Greene delivered a great talk, during which he discussed the critical role of patience. Even if someone had accepted invitations to his lunches at the Harvard Club for years and still wasn’t a client, Greene didn’t let that frustrate him. He believes that the more money a prospect has, the more patience is typically required.

During the Q&A period after the presentation, Greene was asked how long he would communicate with a prospect before giving up, to which he responded: “I’m sorry. I don’t know the answer to that question. I’ve only been in the business 35 years, and I’m still following up today with prospects I began talking to 35 years ago.”

Waiting 35 years may be more patient than you want to be, but one of the new realities of client development is the central role of low-key persistence and patience.

THE LAW OF UNINTENDED CONSEQUENCES

My second conversation was with an advisor in Toronto; let’s call her “Mary.”

Mary is a chartered accountant and senior partner with a firm targeting affluent clients. About 10 years ago, she was asked to serve on a committee of her golf club, for which she had served as its treasurer for the previous few years.

Mary has studiously avoided talking business at board meetings. In part, that’s because it’s her style, but also because in past years, a board member with an investment-counselling firm had mailed an invitation to his firm’s events to some of the golf club’s members, many of whom he knew only vaguely. Although this might seem benign, it was frowned upon as being too overt. Ultimately, the club’s general manager sent all members a reminder that addresses and phone numbers in the membership roster were confidential and not to be used in any form of solicitation.

That’s why Mary was careful about selectively inviting four board members she knows well and with whom she had worked closely to a lunch held by her firm. Rather than mailing invitations, she invited her board colleagues personally at the end of conversations with them on other matters relating to the golf club.

Mary got a good response to the invitations: two of the four attended, one of whom became a client. Mary was even more pleasantly surprised to get a subsequent call from one of the invitees who couldn’t make the lunch, asking if she would send him some information on her firm. This call led to a meeting with him and his wife to discuss their financial affairs and, ultimately, to them becoming clients.

“You’ve done a terrific job as treasurer,” Mary’s fellow board member said. “That’s impressed me. Something else that’s impressed me is that you never talk about markets. I run into guys in the business all the time who never shut up about what they do. I’ve found my dealings with you a pleasant contrast.”

The lesson here is a simple one: sometimes, the harder we try to send the right message, the more it works against us. Mary’s patient and low-key approach has set her apart and earned her the right to approach people she works with _ and, ultimately, has given her the opportunity to win a significant new client.

“I didn’t join the club with the view of networking or getting new clients,” Mary says. “Landing a couple of big clients was a happy byproduct of spending time doing something I love and not just being a taker, of being willing to step up and contribute to the smooth operations of my club.”

SENDING SIGNALS TO PEOPLE YOU KNOW

My third conversation emerged from an email sent to me by an advisor in Vancouver whom I have known for many years. He works for an independent investment dealer. Let’s call him “Allan.”

Here’s the email, reproduced with Allan’s permission:

“Last night, my wife and I attended the 50th birthday party of a client who’s become a friend. I ended up talking for a good length of time with an acquaintance I knew vaguely, named Paul. He and his wife are both partners at large law firms, so chances are they would be excellent clients. We had an engaging conversation, but nothing to do with markets or my work. I am thinking of approaching Paul with a gentle email saying I enjoyed our chat, and that I’d love to learn more about how he and his wife are set up with regard to their investments and retirement planning. Do you think an email approach is too ‘chicken’ and that I should just pick up the phone instead? How would you approach it?”

In my followup phone conversation with Allan, I started by agreeing that he deserves credit for thinking to follow up on this conversation. The challenge, though, is how to do that.

The transition from a casual, social conversation to a business-related one is tricky, requiring us to do it in a way that’s not intrusive and doesn’t put the person we’re talking to under the gun. Furthermore, there’s reputational risk to consider _ no one wants to be known as “that guy” who’s constantly hustling for business in every situation.

I told Allan that in my view, the best way to address this is through indirect communication that academics call “signalling.” For example, when there are gas stations at all four corners of an intersection and one raises its price by 2¢, it’s sending an indirect signal to its competitors: “Do you want to raise prices?” If they don’t, they’ve sent a signal back by not raising their prices, and the first gas station takes its prices back down.

You can use the same “signalling” principle in communicating with people you know socially. Here’s an email that’s an example of signalling:

“Paul, I very much enjoyed our conversation last night. It occurred to me that you might be interested in receiving my monthly emails to clients on the outlook for markets; let me know if this is of interest.”

To be even gentler, Allan could add a postscript: “I know that none of us are lacking for emails; if you’re not interested in receiving another email each month, my feelings won’t be hurt in the slightest.”

An example of more aggressive signalling would be for Allan to send an email saying: “Paul, I enjoyed the chance to chat last night. I’d like to know more about the bike trip you took through Croatia, but I know you said you’re going through a busy period right now. At some future point, perhaps we can grab coffee one morning after our workouts.”

After our conversation, Allan sent an email to Paul offering to put him on Allan’s email list, an invitation that was welcomed. Allan plans to follow up with an invitation to meet over coffee in a few months.

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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