Imagine if you knew about a time-tested technique that would bring you into contact with prospects, but seldom used it.
That is precisely what many financial advisors do every day, missing untold opportunities in the process. They readily acknowledge referrals are important for generating business, but in the next breath they admit they don't often ask for them or don't ask at all.
Advisors dislike referrals generation. They fear rejection. They think it's unprofessional. They worry that it will make their clients uncomfortable. The greatest stumbling block is that advisors don't know how to seek referrals effectively.
There are several ways to go after referrals: Use interviews to learn who clients associate with. During a meeting, a client may say that he enjoys golf. Ask who he plays with.
This will help you learn about his circle of friends and business associates. Later, you could invite the client to a round of golf and suggest that he or she bring some of those people. Each of those friends is a potential client.
Listen for change. When meeting with a client, listen for hints of change affecting people they know. Change is a great opportunity to introduce solutions to their problems.
Most clients will unconsciously offer you insights into the relationships in their lives, and you need to be aware of these signals and recognize them as gateways to referrals.
You need to find a way to meet these people. When you do actually meet them, chat with them about their lives and interests and don't push your business. At the same time, look for problems you can solve.
Offer the same quality service to a client's friend. Say your client is pleased with the retirement planning you've provided and tells you. Ask him if he has any friends who'd also like to know when they can expect to retire.
Instead of asking for new business, you're offering to make the client's friend happy. When seeking referrals, be sure clients understand that there is a benefit for them as well.
The benefit to the clients is twofold: 1. you have more time to work for them, because you spend less time marketing and making cold calls, and 2. the clients have an opportunity to be a hero by helping someone else.
Use rewards. Psychology 101 says the way to get a person to exhibit a desired behavior is through positive rewards. Do you currently reward all the people who give you referrals?
Is it done consistently? The dollar amount of the reward is not as important as providing rewards consistently.
Build trust with your clients. Build trust by listening to their needs, and delivering what you have promised them.
If your clients trust you, they will give you referrals.
Follow up. When you are given a referral, a person trusted you enough to share your name with a friend or associate. It is vital that you follow up with both of them. The prospect may never pan out as a client, but you need to at least contact them. You also need to thank the referror.
Use other cost-effective referral techniques. Here's an easy one - all you need is a piece of string and a $100 bill. Clip the $100 to the string and hang it from the ceiling in your office. Every client who comes into your office will ask why you have money hanging from the ceiling? You explain that you will give them the $100 if you forget to ask them for a referral.
And now that they've brought it up, you might as well ask!
Here's another: Ask clients to name the four people they would want to spend their retirement with. Their answer will give you the names of four prospects.
There are many techniques and strategies to gain referrals from your clients. The key is to find one or two you are comfortable with and use them.
Martin R. Baird, author of "The 7 Deadly Sins of Advisor Marketing" is president of AdvisorMarketing.com , the premier Internet-based source for free marketing advice, tools, and information for self-driven, success oriented, financial advisors who demand information to help them market their practice. Reach him at 480-991-6421
Generating Referrals From Clients - To learn more about this author, visit Donald F. Pooley's Website.
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