Most financial services professionals I know are seeking a “silver bullet” for gaining a steady stream of client referrals.
Dan Allison, who keynoted at the Colorado FPA Symposium last week, interviewed thousands of the top clients of scores of financial advisors to see if he could discover that silver bullet. He categorized current clients, naming some, “landmines” and others, “gold mines.”
No matter what you do, 20% of your clientele
will never refer you.
These “landmines” will never yield a referral. You want to avoid the R-word like the plague with them! However, the other 80% are potential gold mines; they would love to refer you—if you help them to do so.
From these thousands of client interviews over the years, Allison culled seven standard responses. The good news is that you can control several of these responses. I’d like to focus on the #1 reason why your clients don’t refer you.
Drumroll, please!
Why don’t they refer you? When asked, 60% of current clients say their advisors simply don’t ask for referrals. Incredible, right? Maybe we have not because we ask not. (See the teaching of the wise rabbi in Matthew 7:7-8 and his brother in James 4:2b). Yet, when the advisors of those clients were polled, they protested that they had indeed asked clients for a referral.
When those advisors asked for a referral, they typically said something like this: “If you think of someone else who might benefit from what I do for you, please pass my name along to them.”
Notice that advisors are typically making a statement, not a request. They have let their clients off the hook. Their clients can agree without having to take any action, without actually doing anything to open the door for a follow-up request!
Here is a better way you can approach requests for referrals at your next client appointments, even with long-term clients. You can say something like this:
“I have really appreciated working with you all these years. I hope you’ve had a positive experience with me and I want to be sure we always have an open relationship. There’s something that I’ve been meaning to bring up but haven’t been comfortable doing so. May I have permission to ask you something? ….
“Thanks for giving me permission. I know there’s a word that can make both of us feel uncomfortable—the word ‘referral.’ My best clients come from introductions from my current clients. But I haven’t asked you before because I do not want to come across as a sleazy salesperson or offend you in any way.
“How might I approach you about referrals –if at all!—so that I don’t cross a line, don’t make either of us uncomfortable?”
Simply knowing that you should be asking more is NOT enough! The road to hell is paved with good intentions. Decide today what you want to do—if anything at all!
Toolkit:
Do you want this silver bullet to work for you? Here’s what you can do to take action:
- Refine the above script to make it your own. Rehearse it until it’s second nature.
- Identify which clients you want to have this conversation with and include this interchange in your upcoming scheduled appointments.
- Track your results and have clear follow-up steps to help your best clients help you.
Share with us in the comments: what do you think are the other top three reasons clients refer you to others? Stay tuned for future blog posts to learn what those reasons are as well as what you can do to increase those client referrals.
