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My most gratifying experience is seeing how my research helps with those who learn it. Yet, my daily experience reinforces the view that we have a long way to go to achieve meaningful relationships.
My clients are understandably focused on using my research to increase their AUM. I recently learned of a Chinese concept called “guanxi” that explains exactly why some advisors are more successful at building their client base and AUM.
Tone-deaf salespeople
Advisory firms have diverse needs. When we don’t have the necessary experience in house, we reach out to vendors and explore strategic relationships. It has the potential to be a win/win for vendors. They get a steady stream of business. Our advisory firm clients benefit from using a fully vetted professional at a discount over the price they would have negotiated directly.
I’m struck by how many of my initial contacts with vendors go off the rails. They dominate the conversation with long, rambling answers, often dealing with irrelevant issues. Their focus is explaining the benefits of dealing with them.
Rarely do they show any interest (much less curiosity) about me, our company, who we serve, what we’re looking for or why a relationship with them might benefit us (as opposed to them).
In most cases, what should have been an easy “sale” turns into a lost opportunity.
When I don’t pursue the relationship, they do a follow-up, filled with clichés about being willing to answer any questions.
I suspect they felt the initial call went well and they are genuinely confused about their inability to close the sale.
The power of guanxi
At the other end of the interpersonal spectrum is the Chinese concept called “guanxi.”
As described in this article in Forbes, guanxi refers to personal relationships. “Good guanxi” is based on mutual trust on different levels (personal and business). The better the guanxi, the more likely a relationship is to be successful.
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Achieving a high level of guanxi isn’t easy (or fast). We tend to do business with people we like. We like people who share our values and show a genuine interest in us.
It’s difficult to establish good guanxi when a relationship is strictly transactional. It involves getting to know the other person on a deeper level. Who are they? How did they get to where they are? What are their hobbies? What are their needs and how can I best serve them?
Some advisors are so focused on closing they make no effort to establish a personal connection, much less achieve good guanxi. As one consultant explained: “Forget the deal for a while. Open up personally. Make a friend. A real one.”
When I teach The Solin Process℠, the pushback I often hear is, “When do I get to make my pitch?”
Here’s my answer: “Not until you have established good guanxi. Once you have done that, no “pitch” will be required.”
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