From the September 2013 issue of Research Magazine • Subscribe!

August 26, 2013

10 Ways to Boost Your Referrals

One of the first places advisors should look for referrals is their existing client base

Over 160 of our target clients have engaged us in the last two years! Whoo-hoo!

Proud as I am of this number, I am more proud of our referral percentages. Between 40% and 50% of our new business in our Rhode Island office is coming from referrals. Better than that, since May 100% of new business in our Minnesota office has come from clients who love us and trust us enough to refer us to their colleagues and friends.

I get calls every week from advisors who want to increase their client base. One of the first places they should look is their existing client base for referrals. Our system of getting referrals from our existing clients is counterintuitive. We don’t ask for referrals at all. We just provide awesome service—it has worked great for us.

Considering why our referability quotient is so high, we divide these factors into two categories: things that we do that are obvious to the client and things that are not so obvious, because they are taking place behind the scenes. If you address each and every one of these, your referability quotient will go up, too.

Obvious Things

Let’s start with a list of five visible things we do to increase our referability quotient, before moving on to ones that are not so obvious to the client.

1. Make things easy. We make things very easy for our clients. We do everything we can to save them time and effort.

Take this case: We just picked up a lovely professional couple, who were concerned about working with me because her father is a long-time advisor with another firm. Granted he doesn’t specialize in our market, but he is family.

I didn’t denigrate his investment recommendations; in fact, I suggested they leave the old ones with dad and we just work with new money going forward. It turns out dad had made one recommendation that was similar to ours: take your old 403(b) money and roll it over into an IRA.

Here is where you could see the difference between our two firms. Dad tells son-in-law what to do. Son is busy, overwhelmed and confused. He never makes the transfer.

Our approach: We set up a time to do a conference call with the old firm, get that help desk on the line, then do a three-way call with our client, who gives the old firm permission to talk to us and leaves the call. We finish up the call and make sure the funds are transferred over. Net time for our client: about two minutes.

By the way, this worked so well, I think he is going to transfer all his assets to us.

2. Go above and beyond. We develop a deep relationship with our clients. Take these experiences I had over a recent weekend: Two clients sent me email photos of their newborn babies, and one client, who is interviewing for a new job, wanted wardrobe advice! Yes, this does go above and beyond financial advice, but I am more than happy to help. If she gets this new job, her income will go up about $100,000 per year and her chances for a successful retirement will be increased. Plus, I get the satisfaction of knowing I have helped change her life.

We have another client who has trouble finding a babysitter. For the first year I only met in their home at 8 p.m., after the children went to bed. Boy was I tired—but another happy client. Today they come to my office, with the kids in tow. I pull out snacks for the kids and let them play with the markers on my white board.

They referred me to one of their best friends, who also became a favorite client.

3. Be selective. Our clients like that we work with others similar to them. They like that we are very selective about our client base.

When we started in Rhode Island, we only worked with professors at Brown University. I didn’t realize how important it was to have your clients all working out of the same building until later in the year. One of our favorite clients was approached by a neighbor, who wanted a recommendation for a financial planner. Our client told him how pleased he was with us, but refused to give him our name. His comment: “She won’t work with people like you!” I laughed over this story, but I realized our clients liked being part of an elite group. Our beloved client since referred me to many of his partners—because they are part of the “elite” group.

4. Be one of them. My background fits my clients’ background. One of the reasons our clients enjoy working with us is that they know I am “one of them.” With a few exceptions, our clients don’t come from a wealthy background. They made their money just the way I made mine: I got a great education, including a doctorate degree, and then worked really hard to get where I am. Since all of our clients have doctorate degrees, too, this really resonates with them. They appreciate my education, the books I have written and the honors I have received. It means something to them.

5. Over-prepare for meetings. I have a great team who make sure I have every possible document I might need when I am traveling away from our home office. If a client asks about our investment philosophy, I have a presentation pre-prepared along with the paperwork pre-filled if they want to move ahead and transfer their assets.

If clients have an interest in tax-free distribution strategies, I will have a sample illustration from a life insurance contract that shows how it might work for them, along with an application to our top company. Once again, this saves me and the client time. I don’t have to schedule another meeting to go over the paperwork—we have it all right at our fingertips.

The Not So Obvious

Now let’s look at five covert activities, meaning things we do for clients that are not obvious to them but crucial to providing a great experience.

1. Focus on details. Most people today are used to substandard service. We make sure the smallest detail is perfect every time. In the last two years over 160 of our target clients have engaged us. I can think of only three times where someone on our team misspelled the client’s name on a document, plan or application. In each case, I point it out to the client, and then make a big deal of getting the document back to them with the correct spelling.

I know this is a small thing, but in the client’s mind it can be huge. What they are likely thinking is if they can’t spell my name correctly, how can they manage my money? Our message is we can take care of the big things, like your portfolio, with as much attention to detail as we do the small things.

2. Have a standardized process. I think of what we doing as similar to manufacturing, with a focus on high-touch so each and every client gets a great, predictable experience.

We always do the same thing in our first meeting, our second and our third and fourth. This makes it much easier for our team to support the advisor. They know which documents, reports, applications and illustrations I need for each meeting. We never “wing” it, like so many advisors do.

Our process is so systematized, that if I get a bad case of food poisoning, someone on my team should be able to step in and fill in as an understudy at each step of the process.

This allows me to be calm, relaxed and professional in every meeting. It also means I put my full attention on the client—I don’t have to scurry around to prep for the meeting.

3. Enjoy helping clients. We love our clients and they love us. We really care about them and their future.

A key part of creating a great experience for our clients is our team and their attitude. We are very careful about the people we hire to serve our clients. One of the major issues we look for in new hires is do they get the buzz from helping our clients?

I love what we do. Every day we are changing lives. We are making our clients’ lives less stressful and their future brighter. We are helping clients get out of debt and put their kids through college. This isn’t work for me. This is having fun every day.

That attitude is subtle, but I can tell the difference with members of our team. If they do love to help change our clients’ lives, they will be willing to put in the extra time to make sure each client gets a great experience.

4. Focus on ethics. We focus on always doing the right thing for our clients. This is a big deal to me, since I think I was the first person in the industry to talk about the importance of ethics.

First we train this mindset into our team members and then we make sure the client knows we will only make recommendations in their best interests.

We frequently find clients who already have solid, cost effective insurance plans in place. We review them for the client, so they can have confidence in what they already have. Then we tell the client: you need to hang on to this; we can’t do any better for you. I think our clients appreciate our candor.

5. Vet investments thoroughly. We have a due diligence process for every investment or insurance recommendation. We think our independence is crucial for providing independent advice to our clients that is in their best interests. Our due diligence process is never ending.

Take indexed universal life insurance. There are 60 companies out there who offer this product. Every year or so, we go through the same process to make sure we are offering the best possible solutions to our clients.

We immediately eliminate 50 of the companies—they are not cost effective or financially sound or are just not a good choice for our clients. With the top 10, we slice and dice them in every way possible. We look at dollars in to dollars out, expenses, charges, surrender fees, historical returns and numerous other factors. In the end, we usually get it down to two to four different options. Each of these would be a great choice for the right client. We also document this research.

Even though we go through this exercise for investments, term insurance, disability insurance, I didn’t bother to explain it to clients when we first opened our practice. At the beginning, I just mentioned that we were independent and look for the best solutions.

I found out over time that I needed to put more context into the conversation so the client would really appreciate not only the work we had done, but why our recommendation is a good choice for them. Once I explained our due diligence process, I found clients were feeling more comfortable and much more likely to move ahead. They asked fewer questions and the whole process was a little faster. It was apparent we were solving a deep inner need in our clients so they felt comfortable moving ahead.

To provide this level of service provides an entire team—I am blessed to have a great team to help support wonderful clients. You can see why I will never retire. This is way too much fun.

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