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Financial Planning > UHNW Client Services > Family Office News

The science of referral laddering

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How do you meet successful people in large numbers? You must start at the top of the socioeconomic chain and work through their referrals until you reach an unacceptable level.

What do I mean by that? People will refer other people who look up to them for advice. Client A is very successful. Client A will refer other people who he has some influence over. His referral, Client B, refers the same way. Client C does the same, and so forth. Eventually, you will have a drop in prospect value. The only way to keep the referral network of high quality is to keep starting as high as possible.

There will be a point when the quality of referrals will continue to reduce to an impractical level. When that happens, you would be better off not asking that nominator for referrals. He would be put off if you did not follow up. The chain of referrals must be consistently upgraded. Finding ways to connect with a few higher-quality clients will keep quality referrals flowing as long as you are giving quality service. Practice performance must be kept at high levels and follow-through service must be maintained at the high quality level as well.

The discovery process

The discovery of this process took place for me more than 30 years ago. I was talking to a church friend named Jimmy Tharin. He mentioned that he went to high school with an incredibly successful businessman. He was majority owner of an oil refinery and reportedly was earning more than $1 million per day in worldwide distribution. The chances of me getting an appointment with him were not just slim but close to zero. I had no idea how I could do business with him, but I wanted to begin a relationship to discover opportunity. I also wanted to get referrals from him. Jimmy made the call and actually gained access to a secretary. On the strength of Jimmy’s relationship, I gained an appointment.

The fellow’s office covered the entire top floor of a very nice building. To say I was intimidated would be a gross understatement. He was very gracious. His desk was cleared and he listened intently to my words and considered how my opportunities could be of some benefit. Unfortunately, he was just too successful for anything I could offer. He was way beyond reach, then. Today, we could work on some things together, but he’s gone. Don’t be afraid to reach over your head. It could work and the referrals would be amazing.

Giving quality service when it’s unexpected is very powerful. Offering unexpected service to clients continues to build goodwill. Providing extra service that is not actually necessary shows them that you care and are paying careful attention to their needs. I recently went through a training program on cybersecurity. It helped me learn how to secure my accounts. More importantly, my clients now appreciate the help in securing their accounts. I emphasize the vulnerability of their email, bank accounts, and yes, even their brokerage accounts. I follow up to be sure they follow through. It also gives me a chance to get introductions to others who also may need that kind of help. One of my clients held a coffee at her house and invited three friends to learn how to secure their accounts and credit. Of course, I was able to throw in a commercial that was very effective. Extra service led me to opportunity. Now it is duplicable. Other advisors don’t do these things, so they struggle and don’t know why.

The benefit of staying in touch

Is your drive time or other open spaces in time productive? Why not get on the phone and call clients to see how things are going? Many will tell you about changes in their lives since your last discussion. They may have moved or their family dynamics may have changed. Their kids may have gotten married or they may have new grandchildren. Change forms may be needed that would create appointments and opportunities. There may be divorces or deaths of family members. They may have changed jobs, gotten a promotion or traveled overseas. Their spouse may have retired early. Again, all opportunities, but if you don’t stay in touch you won’t know.

Quality prospects will be referred more consistently if we pay attention to the concept of top down referral laddering.


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