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April 30, 2016 at 03:10 AM
Referrals are still one of the most effective ways of acquiring new clients. Since referral acquisition is an art form, we should study the nuances carefully to have a consistent flow of referrals.
I recently met Dan Allison, who speaks at industry conferences frequently on the subject of referrals. I was very impressed with his presentation and decided to ask for some of his thoughts for this month’s column. He mentioned five primary questions that should be answered in order to have an effective referral process. I’ve summarized them for you here, and provided his contact information to read the full explanation for each question.
Many advisors wrongly assume their clients already know how to refer. Obviously, there’s something missing. Referring is an act of faith based on knowledge and trust. By increasing your client’s knowledge about your practice and competence, you will increase their confidence in referring. Also, many advisors have a practice that does so many things that the clients may be confused and only know the specifics about what you did for them.
Question No. 1:
Does this client or colleague value your products and services enough that they would recommend you to someone who is important in their life?
It’s important to get the answer to this question before asking for referrals. However, even though you should ask, there is a right and wrong way to go about it. You certainly don’t want to waste time and embarrass your client. If he or she does not answer this question positively, you have several choices:
- You can find out why and work on correcting the perceived lack of value.
- You can modify your practice to improve customer service.
- You can increase their knowledge about your practice.
- You can skip asking this client for referrals.
Question No. 2:
Does this person fully understand everything you do, or do they stereotype you based on limited services?
Communication about everything you do will create better and more frequent referrals. Are you communicating with your clients regularly? A website may not be enough, or it may be boring. Regular forms of communication by snail mail may be very effective.
Question No. 3:
Does this person know that your firm wants to bring on new, quality customers, and do they understand what an ideal referral would look like?
