How to Sit at the Head of the Affluent Table

Marketing legend Dan Kennedy is the keynote speaker during Day 3 of the Advisor Super Conference in Dallas. This interview with Publisher Paul Feldman appeared in the June edition of InsuranceNewsNet Magazine.

Marketing to the affluent is not so much about understanding the rich as it is about understanding yourself.If you are bringing your most polished, practiced game to the upper reaches of net worth, you might be surprised to find that you’re doing it wrong.

That’s Dan Kennedy’s point about reaching the ultra-wealthy. Off-the-rack solutions are off the table.

This is where custom tailoring lives. This is where special is expected. What works for the mass affluent doesn’t work here.

But you might be thinking this air is too rarefied for you. You might think the ultra-wealthy will see right through you.

Dan has been a copywriting legend for decades, and he will tell you that it’s not a pristine surface that sells. It’s the human touch that says, “I made this for you.” Instead of a clean, spare headline and a paragraph of gloss, Dan writes a sales letter several pages long. And it works. Why?

Because Dan’s presence is unmistakable in the material. He is speaking to you, one on one. Or, it looks that way.

Dan has led countless mastermind groups, seminars, books and consultations to help clients explore the ways of the wealthy, but he is sharing some of his secrets in this interview with Publisher Paul Feldman.

Marketing to the affluent is one of the themes Dan and Paul will showcase at the 2017 Advisor Super Conference.

One of Dan’s key secrets is that the wealthy are interested in connecting with you — but they want to connect with the authentic, focused and maybe even larger-than-life you. Paul and Dan talk about what that means.

FELDMAN: Who are the affluent and what are some of the best ways for advisors to connect with them?

KENNEDY: We know who they are statistically and we know who they are demographically. What’s always most important to learn about is who they are psychographically and behaviorally, and that’s a science and an art.Statistically, they are the top 5 percent of the population, and it almost doesn’t matter whether you define this segment by household income or by net worth. And no surprise the majority of them tend to be age 50 and up. Below that, you often have a lot of high income but under-invested people. It takes time to accumulate money, largely thanks to our tax system.

The affluent tend to be more long-married than not — for the obvious reason that one or more divorces tends to divide the affluent to the point that it’s not affluence anymore. They tend to be sort of stable people.

The old Thomas J. Stanley “Millionaire Next Door” kind of profile applies to more of them who are in business than not. There’s a reason that Tesla can sell only 50,000 luxury cars — because it’s a fairly exotic automobile that the guy who has built up a chain of seven dry cleaners in Kansas City is simply not likely to want. The geography of the affluent is readily obtainable.

In every state, they tend to cluster by ZIP code, so these people are readily findable. Then the key to attracting them and to creating trust with them is all about understanding them intellectually, emotionally and experientially. If you are not one of them, then that is a process of education and observation.

FELDMAN: How do they make decisions differently than the average Joe?

KENNEDY: For starters, they have far more choices. The affluent are less geographically bound. So, if you fly commercial and if you open the airline magazine in the pocket — if you’re not being dragged down the aisle and beaten up at the moment — you’re going to find a full-page ad for a cosmetic dentist in a city, a full-page ad for a hormone treatment clinic, a full-page ad for an anti-aging doctor.

Those ads are there because 20, 30, 40 percent of their patients are coming from all over the country instead of from within their local area.

Second, the higher you go up the affluence ladder, the less likely people are to respond to their need by buying the product or service that meets the need. Instead, they are prone to look for the best provider. In colloquial parlance, poor people buy products and rich people want to find the go-to guy. I’m no different.

I recently had a little situation in my home with some kind of critter getting in and getting trapped inside a wall. A really poor person would address that by smashing a hole in the wall and trying to kill it. A middle-income person would pick a local vendor by Google search probably and they might well take whoever answered the phone as they would call three or four of them.

Now, a really affluent person now wants to know: Who’s the best guy, the smartest guy? Half of the time, they are going to go to their Rolodex, which makes referrals and networks very important.

In my case, I happen to know one of the No. 1 animal remediation guys in the country and I don’t care if I have to fly him in. The cost is not an interest to me. Having the problem solved as efficiently and successfully and permanently as possible, and being able to delegate it and forget it, are what’s important to me.

So the marketing of what you do, the pie charts of financial services, the argument for or against annuities — the more affluent the client, the less important all of this is. That is because the client is increasingly making decisions about the person rather than the specifics of what the person does or how the person does it.In some ways, this can lead affluent clients astray and make them vulnerable.

Bernie Madoff is a prime example of how this works. It leaves them vulnerable because they are often dependent on that Rolodex and dependent on referrals.

So as soon as you penetrated the fortress wall of one, you are inside the fortresses of many, which can get affluent consumers in trouble.I asked my friend, Joan Rivers — now the late Joan Rivers — if she had lost any money to Madoff and she said, “No, I’m probably the only rich New York Jew who didn’t.” She said it was because she had a rule: if she didn’t understand in five minutes or less how the money’s being made, she didn’t want any part of it. But most people do not have that rule and they think, “If so-and-so is respected and trusted and used by Charlie, then he’s good enough for me, too.”

I have a private client whose wealth management firm requires its clients to have a minimum of $20 million, and he has clients for whom he’s handling up to $150 million. What the clients all have in common is having sold a company fairly recently, so the prospect target range is pretty narrow.

The sales cycle to get one of these clients is considerably longer than that of the rank-and-file financial advisor who does a workshop for old people in his hometown, waves a steak at the door, does a great show, books meetings and meets with everybody the next week.

The cost of getting the affluent client is very different, and to most financial professionals, it would all be characterized as much more agonizing. But when you know that one of those clients is going to clone himself and provide three or four or five of himself over a 24-to-36-month period, then the return on investment is really quite extraordinary.

FELDMAN: What are some strategies for getting the affluent to clone themselves with referrals? That’s probably one of the biggest ways to multiply the value of one of your clients.

KENNEDY: Surprisingly, it takes less effort to do this than it does to get average clients to clone themselves, because the affluent are more engaged in relevant conversation with their peer group.

There’s a certain amount of automatic, organic activity that is going to occur if you do a really great job and provide some information devices that lend themselves to passing along.

Continuous presence, feeding them, cocktail party and golf game conversation, discussion points via newsletter, white papers, conference calls — this approach works very well.The higher an individual’s net worth, typically the more competitive they are within their peer groups. So, one of the things they want to do is look smarter and be smarter than everybody else.

And if you provide the means of being that, you will get referenced and mentioned. If you drop down to the guy who’s retired from General Electric after 40 years and you as the financial advisor are now moving his 401(k) money, he’s really not running in circles where those same kind of competitive cocktail party conversations occur.

So you actually have to provide that client with more tools and you will have to do more work to get him to refer. Then on the back side, the client he’s referring to you is most likely comparable to him, so you’re doing more work to get a referral of lesser value than if you were working with a high-net-worth individual to start with.The third thing that works is events — but very different kinds of events.

There’s a matrix of 21 different things that I talk about to people in your industry and to other professionals who deal with high-net-worth consumers. The higher the affluence of the clientele, the better these things work.

FELDMAN: Do the affluent speak a different language than everyone else?

KENNEDY: Of course, all tribes do. There is no tribe without a tribal language, and then you have sub-tribes within the tribes. So if we’re talking about high-net-worth dentists, they have a tribal language that is different from average-income dentists. High-net-worth lawyers have a different tribal language than do rank-and-file general practice attorneys, and on and on and on.Here are things to know about tribal language. One is that tribal language is the representation of how this person thinks and feels about himself, his money, his family, his business, his life and his world view. Second, when you can speak it in an authentic, empathetic, non-pandering way, you get points. It’s a way of accelerating trust.The third thing is it’s a silent alarm. People who don’t know the tribal language are viewed with great skepticism because what it tells the high-net-worth individual at bare minimum is this person hasn’t taken the time and trouble to know and understand us.

FELDMAN: What are some ways of getting trust?

KENNEDY: Trust is built on more things that you shouldn’t control, instead of on things you should. Trust is when more than 90 percent of the people who go into a hospital and let somebody cut them open do so without ever doing any research about the success rate of those procedures by doctor or by hospital. And clearly that should be the opposite.

Like with Madoff and finance.Trust is very much driven by personal affinity. So, to be simplistic, if the financial advisor whose offices are in Boston goes to a meeting with a high-net-worth individual in Oklahoma City and dresses up like a cowboy, he’s got problems because he destroys his believability. However, if he shows up looking like a Boston dandy, he’s got other problems.

If there is no point of affinity at all, he’s probably not going to do well with that client no matter how logical the match is between the two or how beneficial he could be. Points of affinity are important to figure out, to leverage and to build into your marketing.Sometimes people don’t like hearing those things so I’ll give you two examples — one that’s easy and one that the client didn’t like but works.

The easy thing I’ve taught a lot of rank-and-file financial advisors whose clients are middle-net-worth is to go buy an interesting classic car. I happen to own five and so the effectiveness is well-known to me. Yesterday, I had a guy chase me in a parking lot to show me pictures of his classic car that is of the same breed and vintage as mine.

If you don’t drive it much but you at least park it at the office, you immediately bring an affinity point with almost every client coming in that office, because everybody has a “car of my youth” story. That sounds silly but things like that put a thumb on the scale.The other example is a client I had for four years.

It’s a woman-owned firm and it sells and delivers fairly sophisticated financial management services to hospitals. It sells in the C-suite, so it is selling to the CEO and the CFO.The sales process almost always culminates with the CEO of this company — who is a woman — meeting with the hospital CEO, CFO and their team. Unfortunately, almost all hospital CEOs and CFOs are 55-to-65-year-old white men and they have certain biases that, despite political correctness, have not gone away.

And so against other consultancies, her firm has a disadvantage and it’s her. My answer was to hire what we privately call a show pony, a retired hospital CEO from a name hospital who gets paid because he looks right and he’s right out of central casting. If you were going to put him in a TV show as the CEO of a hospital, he’s the guy. He goes along to the meetings and has a fancy title and his job is to nod and help minimize her biological “problem,” and it has an effect.

FELDMAN: Do you have an example of a financial advisor who was able to develop part of their story or persona to connect with wealthy clients?

KENNEDY: An example of that is the client I spoke about earlier — the wealth advisor who deals with people who have built up and now sold companies. Before I got a hold of him, he talked very little about his experience of youth: being raised by relatively poor grandparents, using an outhouse, starting out selling things door-to-door to pay for his own clothes and his own schooling, and being the first person in the family to go to college. He started a business with $500 and built it up.He talked very little about this but you know this is the affinity story of 75 percent of his clients. So I immediately want him to talk a lot more about it with his clients instead of talking about what he actually does with their money when he gets it. A lot of people have this ammunition to work with and they discount it. They haven’t really thought through how, where and when to talk about it. Some may be embarrassed by it and yet therein lie these connection points that really matter.

FELDMAN: What are some of the differences that you see between the successful advisor and the rank-and-file advisor?

KENNEDY: So many differences are generic, meaning that you certainly would find the same differences in all other face-to-face, trust-based professions.

There are a bunch of generic things that determine why somebody is a 1 percent, 5 percent, 15 percent or on down to the bottom 40 percent: How people manage and organize their time; how much of their time is devoted to their highest and best capabilities versus things that should have been delegated; their ability to communicate; a certain level of persistence.

There’s a big difference between an advisor who is barely eking out a living and an advisor who actually has become a high-net-worth individual. That difference has more to do with who that advisor decides to target and craft themselves for. A lot of that falls into the category of what I call place strategy, meaning not necessarily physical location but where you plant your flag to organize clients and activity and centers of influence around you. Second would be process strategy.

So it’s how effective you are at systemizing lead generation, marketing, trust-building, and follow-up versus how much needlessly repetitive, time-consuming manual labor you are doing to get to the same place.Third is what I would call personality strategy, which encompasses authority, credibility, believability, celebrity and affinity. The top earners have integrated those things and are masters of conveying them to their target audience.

The greatest weakness in moderate-income to low-income advisors is their inability to customize anything they’re doing because they’re not dealing with high-net-worth individuals where they can justify and afford it. So they’re always presenting standardized, off-the-shelf presentations, products, solutions and pitches and they sound like they are presenting off-the-shelf solutions.

There’s a big difference between showing you a PowerPoint presentation that you know is the same damn PowerPoint presentation I show pretty much to everybody else with a wallet and a pulse and a 401(k), and me being able to take out a legal pad and three different color markers and take you through what appears at least to be a very customized and a very personalized solution.

The truth is I might draw much of the same illustrations for 50 other people but it doesn’t feel like it. How these successful advisors craft their personality matters a lot, and those are really the big differences.

FELDMAN: What are some strategies for crafting your personality and creating that celebrity

KENNEDY: First of all, you really do not want to try to be something that is not identical to what you are. It’s very hard to sustain that. But you want to embellish and exaggerate parts of you. Personally, I chose some 35 years ago what I call the stern but loving parent persona. And by the way, there are about a dozen choices, in much the same way that any mystery novelist will tell you there are only about a dozen plots.

Ultimately, you are going to pick a persona that best fits yourself and your target audience and that you can make reasonably authentic. So, for someone in my type of consulting practice, the very emotive hug, cheery rainbows and unicorns encouraging persona might fit them best. But it’s not going to work best for me and there’s no point in my attempting it.

The most important thing to know is that the highest earners in every field are very definitive, distinctive and consistent about the persona and the positioning they choose.

The voice in which they choose to speak is so definitive that it repels as many or more than it attracts. You have to be willing for that to happen because you are very clearly going to be inappropriate for and unappealing to one segment of a target market. The closer you try getting to the middle, the less effective you are with anybody.

FELDMAN: You mentioned customizing presentations. How important is it to the affluent that you have fancy flowcharts, pie charts and whatnot?

KENNEDY: Less than most people think and, if overdone, they raise skepticism and distrust. The higher up the affluence ladder you go, the more damaging it is to be perceived as just another salesman.It’s pretty easy for us to identify salespeople.

Salespeople have brochures that are always very professionally done, pretty, classy, glossy and corporate-looking. Sales professionals all have PowerPoint presentations. Financial sales professionals all have pie charts and bar graphs.

You won’t catch a salesperson without them.Some of it is necessary for credibility, and no one dealing with high-net-worth individuals can risk the idea that they are — as Chris Farley used to say on “Saturday Night Live” — living in a van down by the river.We need some representation of professionalism and a support system behind us.

But to rely on it is a big mistake. It’s a big step down in status. There’s a version of this business that mimics Frank Sinatra’s great quote, which was, “Anybody who needs anything more than a spotlight and a microphone is a putz” — and I happen to agree with him.

You need to be where you are able to deliver it with conversational authenticity and appear to be thoughtful about it.Here’s what a salesman does. A client gets halfway through a question or an objection and it’s like pushing the third button to the left on the salesman’s forehead. He doesn’t even wait for the client to finish the question. He’s heard enough to trigger his canned response to it. That approach is deadly with high-net-worth individuals.