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Take your referral process to a new level of professionalism

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When it comes to referrals, the days of begging for names or arm-twisting are OVER! The old techniques we teach in this industry are so damaging that they make everyone cringe. Instead, there are about a dozen modern strategies for maximizing referrals and they all are based on a deeper understanding of client psychology. Here are a few highlights.

Step 1 is to always remember that referrals are one of the most dangerous and fearful moments for your client. In their mind, if you screw up, they might lose a close friend or a colleague. That risk is just too great and so you must make this fear go away before you can expect any significant referrals from your top people and especially from an accountant or attorney.  

One way to professionalize your entire referral process is to create a referral guide. This can be a one-pager or a pocket folder that explains in detail how you work with a referral including your discovery and planning process. When a client can see that you’re serious and thoughtful about referrals they feel much more protected from harm and are more likely to open up. This guide is simple but it will radically differentiate you from any other advisor. 

Step 2 is to know exactly who you want referrals from and specifically who in that client’s world they can refer you to. Most advisors do zero research. They ask childish and absurd questions like, “Who else do you know that might be interested in my services?” Those questions set up the inevitable ”Ahh…nobody!”    

You want to uncover exactly who is in your client’s personal and professional world and you want to find out as much as you can about those key relationships. Then target your referral requests to those specific people. Never ask a client to do your homework for you.  

Step 3 is to stop asking for referrals from weakness and switch to strength. Ancient phrases like, “I need your help to grow my business,” or “I get paid two ways” are the kiss of referral death! They send a message of desperation and need that destroys your credibility in the mind of the client.

Instead, use the “Lifeguard Referral.” It goes something like this:

Part 1

“Bob (the client), these are confusing times in the world of money and investing. Because of that I have decided to open up my practice (the lifeboat) to a limited number of friends and colleagues of my favorite clients. And I wanted to extend that privilege to you. As you know, I’m pretty busy and I only have a few seats left in the lifeboat. But if you have anyone in your world that you care deeply about, they can access my services now. And here’s my referral guide that will explain how that all works.” 

Part 2:

“Interestingly, there’s someone that I’ve been meaning to reach out to and it turns out that you know her pretty well. I know you’re a member of the Symphony Orchestra Board (or some other group that you’ve researched) with Susan Smith. I’d love for the three of us to have lunch or dinner together. Maybe after your meeting next Tuesday. Would that work?”

Obviously there’s a ton of advanced psychology in those two paragraphs, but it’s all designed to take your referral process to a new level of professionalism and success.

Whatever you do, remember that the modern referral experience is based on your extraordinary ability and desire to truly help people. Not simply as a salesperson looking to make more money. It’s a new world out here and your referral process must mature to reflect these massive changes. 

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