7 Client Referral Ideas to Help You Get More Referrals
NOTE: If you’re a new financial advisor, make sure you check out Your First Year As A Financial Advisor, where I reveal several things every new financial advisor ought to know.
Referrals are a great way for financial advisors to get more clients, but consistently generating referrals can be tough.
With referrals, it’s easier to set appointments and have productive discussions because a higher level of trust and credibility is already established.
Here are some stats on referrals:
Most professionals know that referrals are powerful, but they still struggle with tapping into their networks to generate referrals. Maybe they’re uncomfortable asking and don’t want to appear “sales-y”. Maybe they’re unsure if they’re actually delivering value and benefit to their clients.
Whatever it is, most financial professionals could be doing better when it comes to getting referrals. Too many financial advisors rely on “accidental referrals” – this is not a good way to build a business.
“Accidental referrals” are ones that are just naturally given to you. While they’re nice to have (and treated like gold by most of the industry), they are not yours by design. You did not choose to work with the people given to you.
If you have a police officer client, he might give you a referral to a surgeon and a plumber. While he may think he’s doing you a big favor (and he might be, in the short-term), he’s actually doing you more harm than good in the long-term by scattering your focus across multiple types of people. If you try to please everybody, you end up pleasing nobody.
It’s important to get clear on who you want to attract as clients and how your network can get you referrals to the people you truly want. When you choose a niche you will start to generate more targeted referrals, which helps you build your business by design.
I’ve put together this list of client referrals ideas to help you get more referrals.
1. Start With Your Top Clients.
It’s best to ask for referrals from your best clients. They are the ones who closely approximate your ideal client and are most likely to lead you to the type of prospect you want. That’s what I mean when I say building your business “by design”.
If you have clients who aren’t representative of your ideal client (and who doesn’t?) then still ask for referrals, but it might make more sense to refer them to another advisor that’s more suitable. In the long-run, that’s better than keeping someone who you don’t really want to work with and taking your focus off of your ideal clients. All that matters is that people are talking about you with their friends and family.
Also, focus on the people who are most likely to give you the referrals you want. These are usually the clients that obviously love you and the ones that have already given referrals in the past.
ALSO READ: 9 Elevator Speech Tips for Financial Advisors
2. Stop Being Vague.
The biggest issue I see among financial advisors getting referrals is that they don’t ask. The next biggest issue I see is that when they do ask, they’re too vague.
Even when a client is truly responsive to a referral request, he/she may still draw a blank. That’s frustrating, but it’s the financial advisor’s fault.
“Who do you know who could use my services?” is one of the worst offenders. It offers no insight into the type of person you want. Besides, your client probably doesn’t have an intimate view of his/her colleague’s finances.
Don’t ever make your clients do the qualifying for you. That’s your job. All the client needs to do is have a clear picture of who you want as a referral, and it’s your job to help them get that clear picture. A lot of advisors think that if they get too specific with their request they’ll block off whatever referrals they would’ve gotten. This just isn’t true. More often than not, financial advisors don’t get referrals because they aren’t specific enough.
If you don’t believe me, just try it. Pick anything – recently engaged, about to retire, a particular occupation, divorced, widowed, whatever. By putting your ideal client in focus, the client (who, remember, has the best of intentions) will be able to honestly tell you if he/she knows anyone. When you are clear and confident about your request, the better your client will receive the request.
3. Think About The Referrals You've Given.
Think about the last time you’ve given a referral. Really think about it. Why did you give it? Did you give it with any hesitation? What caused you to have so much trust that you willingly gave a referral? How did the person ask for it, if at all?
When you can drill deep on your own thoughts and behavior, you get closer to understanding other people. I’ve heard all types of crazy referral strategies from financial advisors. Here are a few:
Ask yourself: have any of these happened to you? How did you respond? If they’ve never happened to you, how would you respond if they did? You’d probably respond in a negative manner. Why would you think your clients would feel differently? This isn’t rocket science. The big problem is that some clients just want to be nice or are pressured easily and give in to these tactics.
This gives financial advisors the illusion that the referral strategies work. Wrong! The minute that the client leaves, he/she will call or text the referrals, saying “I’m sorry but I gave your name to this advisor, so just ignore him/her.”
Financial advisors will stomp their feet and yell at me because I don’t like these slimy strategies. Do they work? Sure, but I could also mow my lawn with scissors. That “works” too.
ALSO READ: A Day In The Life of a Financial Advisor
4. Remove the Risk.
One reason why people are hesitant to provide referrals is because they’re afraid of looking bad. Who can blame them? They’re putting their reputation on the line and if you do a bad job, they look bad for recommending you.
Do the best you can with every client that comes across your table. Like most things in life that require hard work and patience, this pays big dividends. By handling your clients well and letting them know how you handle referrals, you remove a lot of the risk.
Let them know that referred leads get VIP service from you and that you’re not going to hound them with phone calls or send them countless email blasts. Clients know that you want referrals – they’re not naïve – but they associate some level of risk with giving them to you. If you can remove the risk, you’ll be one step closer to bringing in new business.
5. Plant The Seed.
Another important part of prospecting for referrals is simply to plant the seed. It plants the idea of giving you referrals into your client’s mind. When you do this, your future requests will be softer because it is expected. It will also elicit referrals from those who are ready and willing to giving referrals on the spot. You can plant referral seeds by:
6. Shift Your Referral Mindset.
Most financial advisors and insurance agents have a producer mindset. While there’s nothing inherently wrong with this approach, there are more effective ways to get referrals. I personally suggest a client-centered approach. Understand that referrals are ways for your clients to help their friends rather than a way to help you.
You should also embrace referrals as a way to build your business. Stop thinking of them as something nice that happens every now and then and start thinking of them as part of your overall marketing plan.
Plus, you might be working with some deeply rooted assumptions about referrals that just aren’t true. Some of the common assumptions are:
7. Give Them Permission To Say "No".
You should always strive to go the extra mile and provide value for your clients. They aren’t stupid. They know you want referrals and they know that word-of-mouth is a powerful marketing tool for financial services professionals. The better your service, the easier it will be to get referrals because they will truly want to help their friends and family.
With that being said, you’re living in dreamland if you think every client will want to give referrals. Even if you’re the best financial advisor on the planet, some people just don’t want to do it. No big deal!
If someone tells you that they don’t give referrals, it’s usually because of one (or both) of these two reasons:
If you want to explore their resistance, do so gently. I personally recommend that you respect their position and live to fight another day. If you plow ahead and try to get referrals from people who don’t feel comfortable giving them (for whatever reason, it’s none of your business), you run the risk of aggravating them. You don’t want to kill your client relationship for the chance of a referral.
BONUS: 5 Reasons Why You're Not Getting Referrals...
Are you getting enough qualified referrals from people within your network? Or are you relationship rich but referral poor?
In my experience working with those in the financial services industry, I’ve seen those who stay in touch with clients, go to networking events, and even ask for referrals, but never get much to show for it.
Here are a few of the reasons why you don’t get more referrals.
1. You Don't Take The First Step.
Before you ask for a referral, you must make sure that your client is happy with your services. If you ask too soon, you either won’t get referrals at all or the referrals will be poor quality.
Take a minute to talk to your client and ask, “How are we doing?” That little question works wonders. If you get a positive answer, you can move ahead and ask for referrals. If you get a not-so-good answer, you now have the opportunity to make it better and you’ll live to fight another day.
2. They Don't Care Enough... Yet.
This goes hand-in-hand with #1. A lot of professionals will attempt to ask for a referral when the relationship is too new. There is a time and a place for everything, but if you’re attempting to build a long-term relationship with a client, it’s okay to take it slow.
Think about that time you found yourself in a networking situation and somebody you just met wanted to ram a business card in your hand. When they talk, it’s “me, me, me” and what you can do for them. That’s how you come across when you ask for a referral too early in the game.
When someone gives you a referral, they are putting their reputation on the line. You want to be sure that your relationship with the person is developed enough to minimize the perceived risk they take on when referring you.
Another reason they don’t care enough is that prospects and clients are busy. I publish a lot of material on dealing with rejection because a lot of people get hurt when the first try doesn’t go well and they shut down.
Don’t do this – your clients are probably too wrapped up in their own world. They’re not even thinking about you or what you can do for other people they know. Take it slow, consistently express your gratitude, and remind them of how you could help other people they know. Don’t get discouraged if they don’t hop up and give you twenty names the first time.
3. You're Asking The Wrong Way.
When most people ask for a referral they do it like this: “Who do you who needs XYZ?” Every time I hear someone saying that, I get one step closer to going crazy. Or how about “Do you know anybody who could benefit from my services?” That’s the absolute worst.
In 57 Marketing Tips for Financial Advisors, I explain that you should never force people to do your qualifying for you. The old “Do you know anyone who could benefit from my services?” forces your clients to make a judgment in an area they may or may not feel comfortable with.
All you’re doing is making your client mentally organize EVERYBODY he/she knows, which is too overwhelming. Even if the client is deep in thought and genuinely wants to help you, all he or she will be able to muster is a timid, “I can’t think of anybody.” You want to know why? It’s because you weren’t specific enough.
Clients aren’t giving you referrals because they genuinely don’t know what you’re looking for. Do some filtering when you ask for a referral. If you specialize in working with physicians, ask: “Who is your physician?” and take it from there. If you’re selling life insurance, go ahead and ask, “Do you know anyone who has recently had a child or might be starting a family soon?” By asking more specific questions, you’ve whittled down the five-hundred people that your client knows all the way down to three or four.
4. You Aren't Giving Referrals.
One of the best ways to get referrals from other people is to give them first. When you give a referral, you demonstrate your utmost trust and confidence in the person. You also show your willingness to assist or help your client resolve a problem he/she has – the mark of a true professional.
It’s likely that at least some of your clients are lawyers, doctors, business owners, managers, or some other type of professional. You are the person who interacts with all of these people. If you know someone who needs a particular service, make a referral!
Call your client and check up on them. If they have a problem that can be solved by someone in your network, let them know. Not only will you have stayed in front of your client, but you will kick in a primal urge to reciprocate on the part of the professional. Nearly all service professionals get part of their business from referrals, so send a few their way.
5. You Didn't Ask.
Unfortunately, this is the most common and most easily overlooked reason referrals aren’t coming your way. If you don’t ask, you don’t receive. “Oh, I didn’t know you needed more business!” will be heard so much you’ll think it’s your new ringtone.
Russ Alan Prince’s book, Cultivating The Middle-Class Millionaire tells us that 70% of loyal millionaires were likely to refer people to their primary advisor, yet only 10.7% of advisors actually asked clients for referrals. Dan Allison, the founder and president of Feedback Marketing Group, says that when most advisors lay out their method of asking for referrals, they’re not really asking anything. Sometimes clients don’t even know they’re being asked, or they don’t know that you’re taking on new clients. Be clear and direct.
P.S. If you're a financial advisor who wants to get more clients from LinkedIn, make sure you check out How to Get Clients With LinkedIn: How Financial Advisors Can Set Appointments and Convert Prospects With LinkedIn