Bryce Sanders is president of Perceptive Business Solutions Inc and provides HNW client acquisition training for the financial services industry. In this article for WP, he provides tips on how you should answer that classic cocktail party question: how’s business? What are the landmines advisors should avoid and what answers can help your practice. Sanders' book, “Captivating the Wealthy Investor” can be found on Amazon.
So many questions. Why are the simplest questions often the hardest to answer? Why do we consider some questions “throw aways,” not putting thought into our response? Why when we agonize about how to bring up business with friends do we duck the question when they actually bring it up? So many questions.
Cocktail Party Questions
Certain questions are standard icebreakers anytime strangers are thrust together. “Where do you live?” and “What do you do?” are examples. You have answers. When people who are acquainted (and already used these questions) get together, they often ask: “How’s business?”
Such a simple question! So many land mines! Answer “I’ve having by best year ever” and clients think: “He’s having his best year ever. Am I having my best year ever? Why not?” Try a witty comeback like: “I’m so busy I don’t even have time to cash my paychecks” and they start to think you make money at the expense of your clients. Say “Business is slow” and they think you are unsuccessful. Bottom line: Bragging gets you into trouble. Complaining gets you into trouble.
Five Answers to ‘How’s Business?’
So, what answer might show you in a favourable light? Get them asking more questions.
The qualified answer: As of 10/22/19 the S&P 500 was up 8.25% YTD. Not bad. The index is made of 11 sectors. Some do better than others. Based on recommendations you made to clients you might answer: “Extremely good for people who got into the Real Estate sector of the market. It’s up over 25%. Some of them are thinking of taking profits now.”
Why: People often look for free advice. They used to say: “What’s your best idea?” They often have the problem of being told when to get in, but not when to get out. You’ve indicated you gave clients good advice, they outperformed and you and they are thinking about taking money off the table.”
The reflective answer: You give a short, honest answer. You seek to draw them out. “With the S&P 500 up over 8%, it’s been a good year for my clients. It’s been a good year for me too. Enough about me. It’s your business I find fascinating. How is your maritime salvage business going? Any sunken treasure?”
Why: People love talking about themselves. You learn new information.
How have you helped someone: In your head, change the “How’s business?” question to this one instead. Share a short anonymous story. Someone had a problem. You helped solve it. The problem is behind them.
Why: It communicates “It’s about the client.” You are communicating “you help people.” They learn more about the range of your services.
How you helped someone avoid a mistake: Not all your advice to clients rings the cash register. Sometimes you stop them from doing something stupid. Maybe they were thinking of withdrawing money from a retirement account prematurely. You showed them the potential taxes they would be facing. You helped consider other solutions.
Why: Again, it shows you help people. They may know someone headed down that exact same path. Now they think of connecting you with them is a favour to that friend.
I can’t believe ... not all business involves insurance or investments. Sometimes it’s lending, especially if your firm is owned by a bank. Over the past couple of years interest rates have shown signs of rising, but they are still pretty low. You know what rate your firm lends on five-year mortgages if the borrower has perfect credit. (if not, check.) Your answer to “How’s business?” is “With all the talk about rising rates, I can’t believe we are still lending money around 3.25%.” Stop talking.
Why: You didn’t specify the type of loan, although you researched mortgages to document your numbers. They might say: “Is that on credit cards? Refinancing your home? Borrowing against stock?” You’ve got their attention. You might follow with: “Why don’t we talk on Monday? I think I might be able to save you money.” No commitments were made, you got their interest. You will research rates on the products they mentioned and be prepared for Monday’s meeting.
You want a good, honest and truthful answer. You want to get their interest. You don’t want to deflect the question. Answering simple questions can require serious thought.