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(Related: What Makes a Hero?)

Here’s a story about a financial services professional who might be a little like you…

The appointment took about an hour and a half. John used the quoting software he got from his IMO and presented the illustration exactly how it had been shown to him on the training.

John felt good about this appointment. He earned the lead with production, although he felt most of the leads sucked. As he completed the application process, he thought about the recent training seminar he attended that talked about referrals. John hadn’t really been successful getting referrals. He always felt frustrated, and sometimes dejected, when he didn’t get a referral.

During the IMO training, John was given a script that seemed simple and seemed like it made sense. He felt comfortable using it.

His clients appeared to trust him. After all, they were making a big commitment, weren’t they?

So here it goes, he thought.

“Betty, Frank, thank you for allowing me to earn your business. Most of my business comes from referrals. Who do you know that I could help with a problem similar to the problem I was able to help you with?”

Feeling confident that he had used the referral script exactly as he had learned it, John prepared himself to get at least one referral, if not more.

John maintained eye contact when Betty and Frank looked at each other, then back at him. They were shaking their heads.

“We don’t really know anyone, John,” Frank told him.

So, what happened to John?

And why have you heard that same answer when you’ve asked for referrals?

We’ve all heard that same answer. To some extent, the insurance industry has done salespeople a disservice with the training on how producers can get referrals.

Think back before you got into the insurance or financial service business, before you knew anything about insurance or related products. How many of your family, friends or relatives came to you and said, “Hey, who do you know I can buy life insurance from?”

I’m betting most of you answered, “No one,” right?

Therein lies the problem with the training we receive, with, these canned scripts everyone else uses to get referrals.

The problem is that the industry trains salespeople to ask a question that is specifically designed for the client to respond with the answer, “No one.”

“I Don’t Know Anyone!”

Your clients say they don’t know anyone who needs a life insurance agent because their friends and relatives don’t typically ask about this. Yours didn’t, did they, before you got into the business?

And, if your friends and relatives did ask for the name of an agent, they likely didn’t ask for the name of an agent right around the time you had an appointment with an agent.

So, if asking for referrals doesn’t work, how do we get referrals?

We must understand what a referral is.

Then we must learn to ask questions that our prospects and clients can relate to, and that can lead our prospects and clients to respond with a positive response.

And a question that aligns us with them.

What Is a Referral?

A referral is obtaining a name from someone you hardly know to someone you don’t know.

Many see that as your best source for solid leads.

There are advantages to using referrals.

Referral prospecting is the most efficient and therefore the least frustrating of all methods to get leads. Asking for a referral is also a closing activity. Performing that activity efficiently requires a practiced, rehearsed approach.

Becoming good at getting referrals helps you spend more time selling than prospecting. And selling is where you make money, right? You don’t get paid to prospect, do you?

How to Gather Referral Tips

First, ask for “names,” not “leads.”

Second, remember that timing is important. Asking for referrals at the correct psychological moment, when the clients are most enthusiastic about what you have done for them, will increase the number of referrals you get.

What is that right psychological time?

  • After the application has been signed (at the point of sale).
  • At the point of product delivery.
  • On a service call.

These are the times when you have the best opportunity to gain names of influence.

Asking for the Referral

Don’t “ask for referrals.” Your clients don’t “know anyone,” remember?

Do ask for names.

Do try to attach a behavior to your request.

When you attach a behavior to a request, you often get names.

Behavior requests can be centered on information that you gain during the meet-and-greet and “selling off the walls.” During this time, prospects are sharing information about their families, business concerns, hobbies and other interests. They may share stories of vacations, trophies, and other cues that you find in their homes or businesses.

By commenting on these environmental cues, you lay the foundation to ask behavioral questions after you earn the business.

Attaching a question to a behavior causes the prospect or client to associate people they know with the activities and behaviors that they’re familiar with.

Here are some questions to ask to get names:

Who do you know who has just:

  • moved here from out of town?
  • bought a new home?
  • started a new job?
  • gone into business for himself?
  • married or become engaged?
  • had a new baby?
  • started a youngster in school?
  • said that they may be retiring?
  • started on Medicare?

Get Out of Your Own Way

When clients or prospects start giving you names, don’t interrupt them by asking for the spellings or other specifics.

Let them give you all the names they can, then go back and clean up the referrals with the correct spellings, ZIP codes, area codes, etc.

Convert these names to leads by having an exchange along the lines of the following:

Bob, this is one of the most important questions I’m going to ask you. In your opinion, do you feel you have benefited by our working together today?

You mentioned earlier that your friend Jim owns an auto repair business [or just got married, just had a baby, bowls with you, or whatever it is that Bob told you that he and Jim have in common].

If Jim (referred name) were to walk through the door right now, would you introduce me to him?

Would you feel comfortable telling him you feel that I did a good job for you today? Is there any reason why I couldn’t tell Jim that you feel this way?

Great, what’s his phone number? [or "Great, let’s’ get him on the phone so you can introduce us."]

After you get all this information, you then front load them for your planned contact with the names you received.

Bob, I’ll contact [name you got] this week, would you be kind enough to let them know I’ll reach out, and that you feel comfortable with me?

I’ll also do you the courtesy of letting you know I met with them. Does that seem fair?

Contacting the Referral

When you call the referral, say something like this:

Jim, I have no way of knowing if I can be of benefit to you, but Bob Jones feels I was helpful to him. I would like to get together and show you the type of work I did for Bob and see how I can help you. How about…?

Referral Keys

  • Give feedback to the referrer. People want to know what happened.
  • Let your referrer know in advance that obtaining referrals is part of how you get paid.
  • Never throw away a referral. The timing may be off, and the people you contact may be in the market at some future date.
  • Research shows that the more you call a given list of prospects, the better your results become.

Getting Referral Reminders

Remember: Ask for names, not referrals.

Here are some other important things to keep in mind:

  • Make asking for a name a habit.
  • A lead is just a contact.
  • A referral is just part of an activity.
  • The person named will be a person for you to use your professional skills with.
  • The referral is a step to the next step.
  • A referral will be part of your inventory.
  • A referral is exactly what you make it — nothing more and nothing less.

Now, let’s put some numbers together and see how getting referrals can increase the speed of your success.

Say that you have 15 appointments a week. Even if you only made eight full presentations and you got five referrals from each one, you would end the week with 40 referrals.

With 4.3 weeks in a month, you would end up with 172 referrals.

Divide those 172 referrals into 15 appointments a week, and you could do 11 weeks of appointments with the 172 referrals.

Now divide your closing rate into these numbers and see how many more sales you could be making.

Another way to look at this is to calculate how much money you are leaving on the table.

Is that what you wanted to happen? If not go back to the beginning. Re-read these tips, and remember that perfect practice makes perfect presentations — and long lists of referrals.

— Read Retirement Planning Made Simpleon ThinkAdvisor.


Lloyd Lofton (Photo: Lofton)

Lloyd Lofton started with John Hancock in 1977. He is the author of “The Sidewalk Executive” and “Leads to Results,” the founder of Power Behind the Sales, and managing partner of 7 Figure Sales Tools, a sales and leadership coaching and training company.