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5 questions that will improve your referral process

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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?

Dan offers a question that the advisors can ask clients to help them make it easier to refer. When their friends and acquaintances have a problem to solve, you need to be the referral with the answer. Too many clients are only familiar with what you did for them, and you may not have executed a full array of services for that client. In fact, we rarely do, so if you haven’t expanded their knowledge, you won’t come to mind for a solution source.

Question No. 4:

Does this person know how to make introductions to people who need your help?

It can be quite difficult for people to refer just because they simply don’t know how. They don’t know the words, and they don’t want to present wrong information to their friends by being inaccurate about what you do.

Question No. 5:

Do you know how to approach this client or colleague about referrals in a way that is comfortable for everyone involved?

The approach is important. Dan says, “One size does not fit all. Every client has a different comfort level when it comes to making referrals.”

No matter how much you would like things to be different, there will only be a small percentage of your clients who will consistently refer friends. Determining who they are and helping them to become more effective is a worthy goal.

Dan’s points are very important and effective. Of course, he expanded and clarified the answers to these questions. Here’s a referral for you: I would follow up. Referrals are not easy to acquire, but are extremely valuable. Dan can be found at 

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