When Reaching Out To Digital Entrepreneurs, Use Power Of Networking - Study

Tom Burroughes

4 March 2013

Networking events are particularly effective ways for wealth managers to tap the newly-created riches of digital entrepreneurs, shown to be one of the most promising avenues for fresh assets, according to a report by Ledbury Research.

The “Tribe” report finds that on the sales and marketing side, “correctly-positioned events” are an opportunity for wealth managers to tap into this sector.

The report adds to evidence gathered by another research firm, WealthInsight, which in a study called The Internet Sector: 2012 In Review, noted that internet millionaires pocketed a total of £16.7 billion in 2012 and the potential sum could be even higher, at more than £24.8 billion ($38.5 billion).

But the practical routes of turning this data into client-acquiring meetings are crucial.

Ledbury's report, which drew on interviews rather than quantitative research, said that while events are important as client-acquiring and introduction pathways, an even bigger opportunity for acquiring clients in this area is through word of mouth and client referrals. “When acquired as clients, digital entrepreneurs who are serviced appropriately will themselves become introducers to friends or peers as new clients,” says Valentina Lorenzon, Ledbury Research analyst.

The report found that digital entrepreneurs, while successful financially, are driven less by money than other entrepreneurial groups, and much more by a desire to solve problems to make the world better.

This greater social consciousness extends to other areas of their behaviour in the business world. Digital entrepreneurs value the concept of mentorship and knowledge sharing; they themselves have received or are still receiving advice from someone more experienced in the industry so when they have the opportunity they want to give back and mentor smaller businesses or start-ups.

They also have a very responsible attitude towards tax paying. As the founder of a cloud-based software company says: “We pay all our taxes and we don’t avoid taxes of any sort, we just get on with it and pay them.”

“Digital entrepreneurs are an increasingly important part of the business and wealth landscape in the UK, and the recession has prompted many individuals to set up businesses in this area,” says Lorenzon. “From a wealth management perspective, these digital entrepreneurs are a very exciting next generation segment, with a number of features that set them apart from other entrepreneurial segments.”

Networking experience

"Because of their involvement in their own business, our interviewees often do not have enough time to attend seminars or conferences they are invited to," Ledbury told this publication. "They make time to go to an event only when they perceive it as relevant and value-adding to their business or to their personal finances. In particular, they would find it very useful to take part in networking events that put them in contact with other entrepreneurs to share knowledge and experiences. These events could also become a good opportunity to introduce entrepreneurial businesses to potential investors, something that is very much in demand by up and coming entrepreneurs and those who have realised wealth and are looking to reinvest," Ledbury said.

"They would also value informative events specific to the wealth management industry, providing an objective introduction to offerings and benefits to their businesses or personal finances. Being presented with solutions for the future and some advice on relevant or innovative investment strategies would also be highly valuable," it said.