Part 2 - The 3 Most Common Mistakes Everyone Makes When Prospecting The Ultra Affluent: Being Reactive and Ad Hoc Vs. Proactive and Systematic

Overview & Background

Over the past decade of working with the top organizations across luxury, financial services, non-profit and higher education, we have observed 3 common mistakes that everyone seems to make when trying to engage the ultra-affluent market. In this WealthQuotient blog we will be addressing best practices and providing insights for effectively engaging this challenging and coveted market. Our focus over the next three months will be assessing the 3 most common mistakes organizations make and why these mistakes are the root cause of tremendous inefficiency. To review again, the three mistakes are: 1) Outward In vs. Inward Out (which was our first blog), 2) Being Reactive and Ad Hoc vs. Proactive and Systematic and 3) “Hope Marketing vs. Bespoke Marketing” In this series, we will diagnose both the problem behind each one of these mistakes as well as illuminate the corresponding antidote. Each topic will be coupled with video interviews from experts discussing their diverse perspectives, experiences and case studies from engaging the ultra affluent across luxury, financial services, non-profit and higher education.

Being Reactive and Ad Hoc Vs. Proactive and Systematic

Over the past decade of working with the top luxury brands, private wealth advisors and non-profits/academic institutions, we were able to have copious conversations where everyone acknowledged central role that referrals made in acquiring a new ultra high net worth (UHNW) or high net worth (HNW) prospect.

Organizations Fail to Implement a Process around Referrals

However, across these hundreds of conversations confirming the significance of referrals, we observed an interesting fact: very few organizations and enterprises took the next logical step to build an operating model and metrics that supported a proactive and systematic approach to harvesting referrals among an enterprises’ key relationships and top ambassadors. The question was Why? If referrals were so critical and everyone acknowledged as such, then why did a majority of organizations not then build a roadmap and process for harvesting referrals more proactively. In many of the organizations that we interviewed, there were numerous claims to be proactive. For them, proactive meant asking for referrals but unfortunately they were done in a generic and open ended way. So, yes, they were being proactive in asking for referrals, but unfortunately asking in this generic way is not the best practice. For example, a financial advisor or life insurance agent might when asking for a referral say, “Do you know anyone that…..” and you can fill in the blank here. The typical response to this type of referral request by a busy person is, “Let me think about it and get back to you.” The challenge with this approach is that it forces your existing client or donor to do the work for you. In addition, most often they are busy people and will not have their network at the top of their head. We have clients who have remarked in our training, that they did not need to be specific in their referrals because their key relationships willingly opened their rolodex and would host events at their house. The challenge with that approach is that you are still being reactive to your relationship and you are not sure who they are inviting and whether they are the right prospects. Furthermore, you are not in the driver seat helping to steer this process. We are not saying don’t take advantage of these type opportunities but we would suggest a both/and approach if your key relationships are this willing.

The Anecdote to Being Reactive is Proactively Mapping the Social Graph of Your HUBs

There is a very large assumption lurking in the back of this analysis: being proactive requires that you not simply present generic and general referral requests to your key relationships. But, to avoid that mistake and employ the best practice of asking for specific referrals which will exponentially increase the response rate, requires that you preemptively research your HUB’s social graph. As Step 2 in the WealthQuotient methodology this is area that requires the most time and effort and is clearly the most labor intensive part of the process. However, as one of our clients put it, “it can also be the most rewarding part as well.” In certain cases when the wealth screen surfaces an individual with greater capacity than previously realized and with whom they also already have an existing relationship, this can be powerful. However, when a screening identifies additional capacity in an individual where a relationship is non-existent (other than a minmal donation), the fundraiser finds themselves “stuck” with no execution strategy and again asking, “How do I get in front of the prospect?” But in order to optimize your conversation with your HUB, you need to know which prospects you would like for them to help you engage. Furthermore, you not only need to know all their social, professional and philanthropic relational networks, you need to qualify them financially as well. Understanding who they are connected to without the benefit of financial qualification can create further inefficiencies. Financial qualification helps you to further narrow the scope of the potential prospects that you want to engage through their introduction. So, now you have a lens through which to ask the question if you are truly being proactive about your referrals and also a glimpse into what it looks like to be more proactive and systematic in your referral requests. At WealthQuotient, we train our clients on how to “Map the Social Graph” as part of our Methodology training including all the publicly available sources to help you complete this step. However, many of our clients recognize that since this is the most labor intensive part of applying the WQ Methodology, they requested the ability to outsource mapping, financially qualifying and ranking the strength of their HUBs relationships to us. This is a service that WealthQuotient now offers. Contact us if you are interested in a pilot wealth map.