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Practice Management > Building Your Business

How to Follow Up on a Referral

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How many training sessions have told you to ask for referrals? So what do you do when you actually get one?

The Scenario

As the advisor, you’ve done everything right. You described a scenario where you might be able to help a person with a problem. Your client calls back a few days later. They come up with a name. Sometimes it’s “I’ve told her to call you.” Ideally, it’s a situation where you can make the initial contact.

In a perfect world, your client brings the referral into your office with the introduction: “This is the incredible advisor I was telling you about!” More likely, they provide a name, a cellphone number and an email address. They provide some bare-bones background.

10 Tips for Following Up on Referrals

Let’s start by being efficient.

1. Act immediately upon the referral. Thank your client. Take action. Let them know you made the effort.

Why: If you prompted them to refer someone, they may have expended social capital. “You should really talk to my advisor.” If you don’t follow up promptly, the friend may say: “Your guy never called.” Your client is less enthusiastic about providing more referrals.

2. Understand and follow the rules. The Do Not Call list is a potential obstacle. Business-to-business calling is excepted. Do you have the referral’s work number? If you are calling at home, the rules require them to have given written permission, like an email. This means getting in touch by email has its advantages.

Why: Your firm has rules. You need to color within the lines.

3. Will your client introduce you personally? A conference call is unwieldy, but getting together for coffee is not. They can make the connection, then take their coffee and walk away, allowing you to talk privately,

Why: With your client present, it’s a spoken (or unspoken) endorsement.

4. Can you use your client’s name? Meeting is a no go. Your client doesn’t want to get that involved. If you are calling the referral at work or sending an email, can you use your friend’s (or client’s) name? You aren’t violating confidentiality and discussing a client, you are saying “John Smith suggested I call.” Make sure your firm is OK with this first.

Why: People are curious. Gossip might be too strong a word, but if the email subject line read: “About John Smith” that might get it opened and read.

5. Try to meet in person. You do your best work face to face. Ask “Do you know where our building is located?” This adds to credibility. It’s a real firm. They may be more open to meeting in person than you might imagine. They want to confirm you really work there.

Why: Meetings are more personal face to face. You size each other up.

6. Thank your client. Let them know you have acted on their suggestion. They might offer unsolicited help in the background asking: “What did you think?” or “Have you met with her yet?”

Why: Simple. You are rewarding good behavior with thanks and praise.

7. Helping, not selling. They may have a stereotype of financial advisors as being pushy. Pushy equals desperate. You want to help. You aren’t pushy. If you are confident, it implies you are successful.

Why: Successful people want to do business with other successful people.

8. Learn about their situation. Ask about their issue. This is an opportunity to learn about previous advisor relationships.

Why: If things didn’t work out, you know what to avoid.

9. Next steps. It would be a disaster for your friend if you met the referral, learned about them, decided there wasn’t business and let the ball drop. Agree on what happens next.

Why: You want to be able to follow up afterward.

10. Stop talking. You might let your client know you met with their referral. Thank them again. Now the information you learned is privileged. The client can call the referral and vice versa, but your lips are sealed.

Why: Everyone should admire your respect for confidentiality.

Your objective is to encourage your client’s behavior. If they referred someone and it was a good experience all around, they are likely to do it again. This referral might not be your biggest. The next one might be.

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