Good Referrals = Great Business

Finding new clients is a difficult challenge for independent Financial Advisers today, without the large client bases of direct writers or indeed the rich information available to the bancassurers. Many advisers are using new methods through digital marketing channels to meet new clients, however many are also successfully using traditional client acquisition methods such as seeking referrals from existing contacts.

I’m often asked for tips on how to increase the number of referrals so here are a few thoughts that might help you.

Referrals are not just part of the Sales Cycle

When asked, a number of advisers have told me that they only seek referrals after a product sale! Why is this? Yes, this is a real milestone in the relationship with a client, however it may not be the time that the client appreciates what you do the most! This may be after the financial planning phase of your relationship or indeed after easing their mind with a mid-year review, hastened by another fall in the markets. This is the time to ask for referrals, when the value of what you do is most obvious to your client.

Know your Clients who refer

We all know the value of focusing on your target market. The same applies to seeking referrals. Keep good records of which of your clients have provided you with good referrals in the past. Maybe there are more people that they can refer to you? Or maybe you can spot a common characteristic that is shared among clients who refer. Do you have other such clients that you should be seeking referrals from?

Develop some Case Studies

Case studies of innovative solutions that you’ve developed for clients can fulfil a number of purposes. One of these is helping you get referrals. Make your clients aware of these case studies as they may just trigger a thought of a contact of theirs who could benefit from your expertise.

Be very Specific

The approach of saying to a client, “Do you know anyone who would benefit from our unique and wonderful approach” just won’t wash in my view! This puts the ball squarely in your client’s court and leaves all the work up to them. Inevitably they’re likely to mumble some positive response and promptly forget about it!

Instead, carry out some research before seeking the referral and know who your target referral is from your client; either an individual or a company and ask for an introduction to them. This is possible (see also the section below about LinkedIn)! You might suggest a cup of coffee with the three of you or at least an email of introduction from your client to the referral. Then it is clear to your client exactly what you want from them….

Use LinkedIn……properly!

LinkedIn is a very rich source for referrals but must be treated with respect. It offers super networking opportunities and indeed can be a great source for referrals. Examine the connections of your LinkedIn contacts to see who you might like to be introduced to. If you spot a “target”, now is the time to take care!

There is a best practice protocol with LinkedIn in relation to seeking introductions. The key to it is to go through your connection in common, seeking an introduction. There’s a process built into LinkedIn to facilitate this. Do not blindly reach out directly to your target. First of all, you are reducing your chances of success, as well as being potentially treated as spam by LinkedIn. This is a very damaging place to end up in as it will make it far more difficult for you to connect with anyone into the future.

Thank your clients who refer

This is a bugbear of mine from one particular bitter experience (not I hasten to add in relation to any financial adviser)! I think it is so important to acknowledge the referral, irrespective of whether it is successful or not.

Referring someone is an action that takes a level of personal risk as there is always a level of hesitancy that the person being referred may not appreciate it! There’s sometimes also a (hopefully small) amount of doubt that your own service may not actually meet the expectations of the referral. So acknowledge this perfectly justifiable uncertainly of the person giving you the referral with thanks for that personal commitment to you.

These are a few thoughts that I hope will help you approach the seeking of referrals in a more structured and ultimately more successful way. Best of luck with them!

I welcome any comments that you’d like to leave in the comments section below.