Advisor Perspectives welcomes guest contributions. The views presented here do not necessarily represent those of Advisor Perspectives.
Referrals are and always will be a hot topic for financial advisors. I enjoy helping advisors improve their referral efforts because it enables them to form closer relationships with the people in their lives who are most important. A relationship-based business thrives on one’s ability to nurture, support, leverage and maintain the connections to the business and the people associated with it. Referrals require trust from all parties.
I impact that culture by increasing the trust between people.
You’ve likely seen many ideas, strategies, techniques, tips and more on referrals throughout your career. Perhaps these ideas might cause you to think a bit differently, implement something for the first time, or enhance the trust you have with someone close to you. Let’s dive in.
Stop asking and start teaching
You might be thinking this is a play on words, but not really. Asking for referrals makes a lot of people very uncomfortable. And for others it’s a breeze. When I talk to people about what’s in their head when they think about asking for referrals, I often hear things like, “I don’t want people to think I’m desperate,” or, “I don’t like making people feel uncomfortable.” When you create mountains like this in your mind that you have to overcome, it will always feel difficult. Instead of asking, teach people how to refer you effectively. Focus on becoming the best referral educator you could possibly be for your business. Teach people what they need to know so they can refer you to the right people and in a way that makes it easy and comfortable for everyone. When people feel good about referring you, they are likely to do it again.
Find creative centers of influence
Every advisor needs a CPA, estate attorney, banker and insurance agent. Those professionals already have one or more financial advisors that they refer to consistently. It makes it harder (but not impossible) for you to stand out and get to the “preferred” status for referrals. So, find other professionals that your colleagues happen to be ignoring. This gets easier when you have a specific niche, but it’s still possible to make an impact in your referrals. Ask yourself, what other professionals are serving the needs of the people I want to serve? Ask your clients who they turn to when they need XYZ. For example, you might find a creative center of influence who is a landscape designer, wine-cellar architect, executive coach, or owner of a pet spa. You get the idea. Think creatively. Develop the relationship. Refer your clients to them and teach them how to refer you. And in the meantime, avoid your competition.
Dedicate more time to referrals
Talking to clients about referrals at the end of a review meeting amounts to a two-minute request at best. You’re missing significant opportunities if that’s your primary way of bringing up referrals to your clients. If referrals are so important to you, dedicate much more time, energy and revenue towards creating a process that works. As I mentioned above, clients need to be taught how to refer you. And it’s your responsibility to teach them. Imagine taking your favorite clients out to lunch while engaging in a 45-minute referral conversation with them that they are anxious to have with you. Just because you haven’t done this before doesn’t mean it won’t work. It works beautifully when you choose the right people, prepare them for the conversation and facilitate the conversation in a comfortable manner. One client reported to me that his client thought of seven people to introduce to him and called four while they were having lunch to make the introduction. The right clients are eager to help their friends by connecting them to you. To increase your referrals from clients, invest more time into your process.
Create a referral team
Referral networking groups work because of four foundational elements: trust in each other, staying top of mind, commitment to the process, and ongoing education. There’s no reason why this concept can’t work for you on a smaller scale. Gather four professionals you trust who spend time with the people you prefer as clients. Plan to meet as a small group (preferably in person) at least once a month, although twice a month is better. This time spent together is critical for the success of the group. It makes it easy for you to stay top of mind with each other and gives you more opportunities to teach each other how to refer effectively. Each time you get together, compare your calendars, talk about where you’ll be and who you’ll be around in the coming weeks. Look for opportunities to refer each other. Teach each other how to bring you up in a conversation. Strategize how to make the introductions. The referral potential for this team will be endless when you build it with the four foundational elements front and center.
If you’re not happy with the referrals you receive, do something different. You can’t keep doing the same things and expecting different results. Implement something here that could transform your referral efforts and deliver the results you’ve been wanting. If you don’t know where to start or feel uncomfortable with referrals, reach out for a conversation.
Michelle R. Donovan is a referral/business coach and partner of Productivity Uncorked LLC. She helps financial advisors fix their referral issues and build a robust business through coaching and consulting. Michelle’s books have become Wall Street Journal best-sellers, Amazon best-sellers and published in seven languages. Email Michelle at [email protected] to start a conversation or connect with her on LinkedIn.
Read more articles by Michelle Donovan