The Problem with Getting Clients Through Social Relationships

ari galperAdvisor Perspectives welcomes guest contributions. The views presented here do not necessarily represent those of Advisor Perspectives.

Advisors have been taught by peers and mentors that to effectively acquire new clients, they need to tap into their social networks – the “low-hanging fruit.” They find themselves approaching friends and relatives, attending social events at the local chambers of commerce, country clubs, and golf courses, and engaging in conversations over coffee or a meal, patiently waiting for an “in” to start talking about what they can do for them as an advisor.

It’s awkward to insert yourself into the conversation with something to the effect of: “I could take a look at your finances if you’d like”. That’s the moment the person you’re socializing with senses your real agenda, triggering in the back of their mind: “Is he just being friendly with me to try and get my business?”. At that moment, what seems like low-hanging fruit becomes the most difficult, hard-to-reach fruit at the top of the tree.

Coming across as having an ulterior motive, using the social relationship as a lead-generation strategy, can break trust faster than it took to create the relationship in the first place. Crossing social norms into business norms is fraught with pot holes, yet relationship-based selling can be fruitful if you’re perfectly happy with an extended and very long sales cycle that is often unpredictable. The theory goes, the more relationships you create within your network, the higher likelihood of landing a new client – which is fine, if playing the “numbers game” is your thing – when ultimately, you’d be happy with just one or two new clients per month.

The key to unlocking this predicament is not to confuse social contexts with business contexts.