Organizations: The right places to meet the right prospects

Are you a top-down or a bottom-up kind of person? When handed a profile sheet about a luxury car or newly released California wine, some people start at the top, learning what makes the product unique. Others start at the bottom because they want to see the price before they decide if they will read any further. The same logic can apply to prospecting.

The bottom-up strategy has been popular for decades. Financial professionals find people who will listen to their story. Once engaged, professionals then determine if the person has the asset level required to be considered an ideal prospect. The top-down strategy assumes the financial professional builds a list based on research that includes most local people in the top 3% to 5% of the population measured by wealth. They work to get close to these people. They know if they connect with someone, they are already prequalified as an ideal client based on wealth.

Let us assume you think the top-down concept is great, but where are you going to find these wealthy people? Are they concentrated somewhere? Don’t birds of a feather flock together? You are right.

Plenty of wealth in the community sits in the hands of established business owners. The manufacturing and service industries come to mind. You need to add professionals to the mix.  You know doctors, lawyers and accountants can do well for themselves. Often, they own their own firms.

Generally speaking, when people reach a certain age, success and wealth, they give back to the community.  The nonprofit sector is expert at inviting these people to sit on boards and become major donors. You might get mail from charities far and wide asking you to send money.  Perhaps you write a check and send it off. These wealthier people fit into a different category:  They succeeded in business because they watched the bottom line. They stay involved at the nonprofit because they want to know how their money is being spent.

How do you choose the ideal organization when there are so many organizations to join? When considering your ideal prospect, you apply several criteria. The principles are the same. The ideal organization has four characteristics:

1. Attracts high net worth individuals. This is glaringly obvious. If you want to meet wealthy people there, then you need wealthy people to meet.

 

How: Most nonprofits publish annual reports. These can usually be accessed on their websites. They should list donors by name, organized by giving category. You want to consider charities with plenty of people at the annual giving level of $1,000 or higher.

2. Opportunities to meet them. The ideal organization brings together 200 people once a month to a meeting or event. An organization that meets only once a year or does everything virtually doesn’t provide this level of access.

How: Study the organization’s website. Do they have membership meetings? Museums have exhibit openings. The symphony has concerts with intermissions.

3. High visibility. You want instant name recognition. When you mention the name of the local college, animal shelter or hospital, people know exactly what you are talking about. You don’t want to have to educate them on the group’s history and mission.

How: Build a list of the cultural organizations, nonprofits and charities you can think of, off the top of your head. These are the ones with name recognition.

4. Positive impression. You want your organization to generate an immediate good feeling in anyone who hears its name. In my opinion, this takes political organizations and controversial groups off the list. If your community is evenly divided politically, if you have a high profile in one organization, a large segment of the population will tell everyone they would never do business with you.

How: This is easy. What organizations do you feel strongly about and know others who feel the opposite way? These stay off the list.

That last point might bother you. Why can’t I support a cause I believe in strongly? Of course you can! But when talking about networking with HNW individuals, we are talking about groups where you would have a very high profile. That’s different.

What about passion? Do I need to be an art expert to join the art museum? Of course not! If that were a criterion, they would only have art historians as members and few of them would have serious money. Wealthy business owners in your community are involved because they know the principles of running a for profit business also apply to the nonprofit world. Their friends are involved. They might like art, but they aren’t experts in it.

Isn’t this expensive? All these wealthy people are involved! I am not rich! The financial barriers to enter are surprisingly low. In a future article we will look at the pros and cons of different types of organizations. We will look at the high-profile, obvious ones and the under-the-radar groups other financial professionals might have overlooked. We will look at examples of what your annual costs might be if you become involved.

 

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