How to reach the affluent; a marketing expert shares his networking approaches for building an impressive client base - Tutorial

Home Office Computing, Nov, 1993 by Thomas J. Stanley

A MARKETING EXPERT SHARES HIS NETWORKING APPROACHES FOR BUILDING AN IMPRESSIVE CLIENT BASE

Nelson Paramus was a struggling investment consultant for years before striking it big. His marketing methods were, well, primitive. Anyone who was breathing was a prospect. Moreover, of Paramus's clients, who came from a hodge-podge of occupations and industries, only a handful invested more than a few thousand dollars. So he decided to focus his efforts on clients with higher disposable incomes.

Among the hundreds of well-to-do respondents whom I've interviewed at my organization, the Affluent Marketing Institute, word-of-mouth endorsements were most influential in their decisions to patronize businesses (see this month's Sales & Marketing column, "Make Word-of-Mouth Work"). In fact, high-quality products or services--while important--have little to do with the buying habits of the affluent. I suggested to Paramus that he concentrate on the food distribution--service trade, because few investors targeted the affluent in this industry. Then I asked him whether any of his clients were in the food business, and he said he'd had only one. Today, he has many more. After winning the respect of a multimillionaire--and gatekeeper who helped him penetrate this market niche--Paramus does not mamage investments anymore. Instead, he's built an impressive client base, whose business he refers to other money managers.

Before you develop a marketing strategy, address this question: What types of industries within your trade contain the highest concentrations of affluent individuals? One way to find such a group is to contact your local chamber of commerce or state trade bureau. They can tell you your area's top industries according to sales revenue. Many of the suppliers to these industries are also affluent.

Enterpeneurs like Paramus who've succeeded by influencing the influential already know the secret: Enhance the concerns of others before seeking business for yourself. For instance, the most important thing you say to convert a prospect into a devoted client is, "Given me a stack of your business cards. I have many clients who are likely to buy from you." You'll see from the case studies here that a client will go far out of his way to endorse you if you do something extraordinary. So to begin building your customer base, think about what you can offer. Then use one or all seven of the following networking approaches.

1 THE TALENT SCOUT

Armed with the names of wealthy opinion leaders in the food distribution-service industry, Paramus took the talent scout approach. First after learning that most of his potential clients read Food Distribution magazine, he called the editor and said, "I hve some financial articles to contribute. Would you accept them?" The first was published two months later. This enhanced his credibility.

Next, Paramus sent a letter to the heads of 25 food trade associations announcing the formation of his Food Industry Advisory Council, offering the investment advice and speaking skills of investors he knew. Within a week, Mary, head of one of the most influential groups, contacted Paramus asking if he knew of someone who could speak at a local trade show about the financial market's impact on the food industry. So--acting as talent scout--Paramus provided the services of a top food industry analyst as the featured speaker. How was Paramus rewarded? Mary endorsed him. At his first association meeting, Paramus left with 320 business cards from affluent attendees. Better yet, after Mary opened an account with him, 10 more accounts were started from the attendee list. Why did Marv the millionaire respond positively? Because Paramus addressed Mary's needs before mentioning his own.

Now Paramus asks his clients to acknowledge their best suppliers. He, in turn, asks these suppliers for their suppliers. Because most feel that by ignoring Paramus they'll tarnish the relationship with their clients, names are offered. Targeting suppliers of suppliers is a productive way to obtain prospects and build a network.

2 THE REVENUE ENHANCER

Fred Peterbaum, an independent businessman who owned an equipment distributorship, was a conduit of critical information about the construction business in his area. He was among the first to know when a major construction job was about to start. He visited sites every workday. And building contractors who anticipated successful bids would place orders with Peterbaum--but not only for equipment. You see, they viewed him as a for-free headhunter, a person who'd provide them with the names of talented craftspeople. In essence, Peterbaum acted as a revenue enhancer, an informal development agent for his own customers. His referral system, based on his genuine desire to help clients, was simple: You can't tell equipment to a customer who has no customers. In return, Fred Peterbaum's customers, who paid on time, made endorsements on his behalf.

3 THE ADVOCATE

J. Conrad Peterbaum, Fred's son, is successful for similar reasons. Not only is he a talented dentist, but he's also an advocate for his patients. He goes beyond fillings ane extractions. He establishes rapport.