by Bryce Sanders
Many people are in the business of selling a product or service to individuals. Real estate, insurance and investments are obvious examples.
Once you tell people what you do for a living, they often say: “I don’t do business with friends.” They also say, “I already have a realtor/agent/adviser”, but that’s another story. What’s the big deal? What holds friends back from doing business with someone they know and trust?
I conducted plenty of interviews when writing my book Captivating the Wealthy Investor. This provided lots of answers to this question.
1. Confidentiality — Can you keep their secrets? They assume you talk about your clients. It’s like celebrity endorsements in reverse.
Solution: We know a lot of the same people. Some may be clients. You’ve never heard me talk about client identities before. I’m not going to start now.
2. Do they know what you do? — We pigeonhole people. All lawyers are either Perry Mason or ambulance chasers. They’ve likely done the same with you.
Solution: Do they know the full range of your services besides the obvious? Have that conversation by expressing a desire to learn more about what they do.
3. Risk to friendship —“If something blows up, I’ve not only lost money, but I’ve lost a friend.” Congratulations. They put a high value on your friendship. However, they need a way to unwind the business relationship while preserving the friendship.
Solution:“If you invest with me, you should get a report card. If I’m doing a lousy job, you should be able to fire me.” Clients love accountability.
4. Have they been asked? — Your aunt never approached you about business, so you assume she isn’t interested. She might like the idea of doing business with a family member, but since you never asked, she assumes you aren’t interested.
Solution: Everyone should have the opportunity to say no. Approach them politely.
5. Do they know you are adding clients? — If you tell everyone how little free time you have, they may assume you have all the clients you can handle. They know they need your help, but they think approaching such a busy person is an imposition. They don’t want to do that.
Solution: When they ask “How’s business?” share anonymous anecdotes about how you have helped new people who just became clients.
6. What size accounts do you handle? — No one wants to be told “You are too small.” Ever notice how “high net worth” sounds like “More money than you’ve got?
Solution: If you describe your clientele as a range from high to low, you have created an inclusive environment. People can see where they would fit within the spectrum.
7. Is this the right time? — The main reason you need lots of prospects (pipeline) is because people often don’t need what you are selling at this time. You need to conform to their timetable.
Solution: Realtors and others in sales need to know many, many people. They need to stay on everyone’s radar. When the friend needs to take action, they will want to move quickly. You want to be top of mind.
8. Experience — It’s a problem for second (and third) career people. Friends knew you as a great engineer. What do you know about loan origination?
Solution: Sell the firm. You aren’t a sole proprietor selling a service. You have an organization and team behind you.
9. Outside relationship — Everyone you want as a client works with someone else already. They may be happy. It might be complicated because they work with their brother-in-law. They either don’t have a compelling reason to move or they don’t want to rock the boat.
Solution: Many people think they only need one practitioner in every profession. They have one mechanic, one barber and one accountant. One spouse, too. In other fields, diversification means working with more than one provider. It’s prudent.
10. They don’t like you — That’s the reason they don’t work with you. You are related through marriage. The in-laws came as a package deal. You sense their frostiness when you enter the room.
Solution: Don’t look for one. This isn’t going to end well, especially when money is involved. Write these folks off, unless they have a change of heart and approach you. In that case, stick to plain vanilla products with few moving parts that will perform as expected.
Friends have lots of reasons they don’t do business with people they know. Most can be worked through as you find a solution together. But not all.