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2 harmful referral myths

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It has been said that one of the best ways to build your client base is through referrals. But if you’re like many agents and advisors, you struggle to persuade clients to regularly offer them up. Here are some myths that may be preventing you from acquiring more qualified referrals:

1. Want a referral? Just ask.

Advisors know that asking for referrals is the most direct way of letting clients know that you want them, but many are reluctant to ask. This reluctance makes asking for referrals anything but easy — and for good reason. Asking for referrals may imply that you’re in a negative position and need more business or that you’re trying to grow a large (and less personal) practice. Moreover, when aggressively asking for referrals, it can be all about you, your business and your sales.

In fact, asking for referrals may not be a natural extension of the relationship you’ve developed with your client. That’s why we sometimes “forget” to ask — even when we know asking could help us expand our businesses.

Some of the industry’s top producers receive 100 or more referrals each year without having to directly solicit them. How do they do it? These advisors say it comes down to the relationships they have with their clients. So ask yourself how you would rate your client relationships.

A periodic, proactive call, review meeting or handwritten note can drastically alter the way a client feels about you and your organization. It may sound simple, but consistent, unexpected touches may give clients just what they need to comfortably (and without prompting) tell others about you.

2. My clients don’t know anyone who needs my services.

Have you ever heard a client say “I don’t know anyone” when you asked for a referral? Did you believe them? Chances are they know lots of people but are simply not motivated to give you their names right now.

One of the most successful strategies for giving clients a reason to immediately refer someone is an event called “Don’t Miss the Boat.” It’s similar to a client-appreciation event, but the only people invited are clients who have referred others to your firm. Say to your clients “Mr. Client, don’t miss the boat! We’re doing this big event on October 15th on a dinner boat. It’s going to be a gala event with music and dinner and dancing. But, don’t miss the boat; the only people we’re inviting are those who’ve made a referral by the end of the month.”  This gives clients an immediate reason to think of someone. (Yes, it may be a little gimmicky, but this strategy has a high success rate.)

Busting these referral myths could have a dramatic effect on your referral fortunes. And the best news is you can do it without a huge expenditure on traditional marketing. There’s nothing mythical about that!

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