7 Simple Steps to Rev Up Referrals

Posted By on Apr 12, 2013|0 comments

If you’ve been following my entries, you can see that I am a huge advocate of having a process. Having a process creates efficiency, predictability and accuracy.

However, you can imagine my astonishment after speaking with 721 advisors in 2012 when more than  90% of those advisors did not have a plan or a process (read more about my experience in A METHOD, OR RATHER PROCESS, TO THE MADNESS: WHAT FINANCIAL ADVISORS CAN LEARN FROM A FURNITURE GURU).

Most of these advisors indicated that they rely on referrals for sales.  FANTASTIC! Naturally, several questions followed:  When do you ask for the referral? What do you ask your client? Does the client know who you are looking for in an ideal client? How does the client make the referral? What do you do follow up with the prospect?

When I asked these questions, I typically got an awkward silence. The next time you ask a question, start counting how long it takes the person to answer. I bet you get a response by the time you say four one thousand. Such was not the case during my 721 conversations.

The objective of this entry is to provide you with a defined process for capturing referrals. The ideas are from Townsend Wardlaw  http://townsendwardlaw.com, who is a sales architect and member of the Dunn Warren Investment Advisors board.

Reality Check

The reality is that people make referrals to look good.  Your clients want to look good in front of their friends. Clients want to be helpful and provide value to their contacts. Your job is to make it as easy as possible for your clients to look good. Clients need to believe that you provide value, you have a specific process and you will work professionally with their friends and contacts. You can capitalize on referrals by following our process outlined below:

1.     When to Ask for the Referral

Sit down and create a list of all clients that have used a service or a product that you provide. I find that creating a spreadsheet where you can also put when you contact the clients, notes and names given is helpful. After you have the list, call you client and ASK for the referral.

2.     What to Ask the Client

What questions to ask to get the referral. If you have been using the questions we recommended in WHY EVERY FINANCIAL ADVISOR NEEDS A NORM PETERSON, you probably already know what to say.  When you call and ask for the referral it is also a great time to understand what the client appreciates most about working with you. Begin the conversation by stating exactly what you want to accomplish: “I wanted to understand what you appreciate most about our relationship.  May I ask you a couple of questions?”

  • What is working well in our relationship?
  • What makes it work well?
  • What caused you to choose my firm in the first place?
  • What do I do that no other financial advisor does?

3.     How to Describe Your Ideal Client

This is the time to pivot the conversation.  Begin by reiterating what you heard the client say from the questions above. Then, in plain language, provide a framing statement and describe your ideal client. The framing statement describes what you do in one simple sentence.  A framing statement might look something like this: “AUM in a Box empowers advisors to grow their sales and increase their back-office efficiency.”

Your ideal client should be described in demographic and psycho-graphic terms.  Demographic terms might include age and marital status. Psycho-graphic terms refer to the individual’s behavior.  The last point should indicate the prospect’s objectives, for example, “I want an advisor that will communicate with me and be proactive in providing me with advice.” A description of an ideal client for AUM in a Box might look something like this, ” Our idea client is someone who would like to create a sales plan and wants direction and accountability to achieve that plan.”

4.     When to Talk about Challenges

Next, you will want to provide your client with challenges that you/your firm addresses that individuals face when it comes to financial planning. Do not list the services you provide, but rather state challenges you solve, like:

  • Lack of communication from my advisor.
  • When the market declined, we did not know what to do.
  • When we were preparing to send our kids to college, we did not know what to invest in.

You should have this written down and documented.  After the conversation with your client, you can email these points to them.  Provide the framing statement (what YOU do), your ideal client, and the challenges individuals are facing. This is a good follow up and you can thank your client for providing you with referrals.

5.     How to Help Your Client Make the Referral  

Before you end the conversation with your client, tell him that you will send him an email recapping your conversation as well as information to help make the referral as seamless as possible. When you ask your client for referrals, you should provide him with an introductory email and or a script. He doesn’t need to use it, but you want to make it as easy a possible for your client to communicate. Here’s an example:

[Prospect name],

I wanted to introduce you to [Your Name] from [Your Company].  [Your Name] helps individuals [Framing statement]. He works with clients to [Challenge#1], [Challenge#2], [Challenge#3] (re-frame the challenges as positive action your firm takes).

I have copied [Your Name] on this email. I hope the two of you can use this email as an introduction and find time to meet.

Best Regards,

6.     When to Follow Up with Prospect

Once your client sends the introductory email, contact the prospect. In the email, provide three suggested times you can speak with him/her. Be sure to ask your client (the one making the referral) if he would like to have a conversation with you after you and his contact connect.

7.     Why to Send a Thank You NoteSend thank you notes to clients who give you referrals.

Once you have met with the individual and connected with the prospect, send a note to your original client.  I find that a handwritten note works best.  This enables you to communicate with your client. It also gives your client the confidence to continue referring you to his contacts.

In Summary

Asking for referrals is a process.  Having a plan enables the best chances for success.  Be very specific in what you are looking for in an ideal client. Share your “ideal client” description with your client making the referral and follow it up in written form via email. Also, be sure to send a thank you note to your client making the referrals.

Repeat the referral process outlined above every three months. It should be part of your ongoing sales campaigns. Good luck!


Put the above process into place and boost your referrals.

photo credit: Stuck in Customs via photopin cc

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