If you ask most agents and advisors, they will say that one of their practice goals is to get more referrals. After all, when you get a referral, it’s much easier to set appointments. Even better, those appointments tend to be more productive since the prospect arrives with a higher level of trust and a certain belief in your expertise. Wealthy investors say 58% of them found their current advisor through a referral. Testimonials can really help also.
With so many advisors looking for desirable clients, the client finds their advisor via a referral less than 11% of the time. Surprisingly, less than 20% of financial advisors ask for referrals consistently. Advisors and agents realize the power of referrals, but they still struggle with how to tap into their database without coming off as “sales-y” or desperate.
(Related: 8 Knockout Approaches to Virtual Networking)
There is an inherent discomfort in asking your best clients to put their reputations on the line and recommend you to other people in their lives. This discomfort means many agents and advisors sit around waiting for referrals to fall from the sky as if by magic.
What can you, as a trusted financial advisor who performs an incredible, life-changing service for your clients, do to ensure that they won’t be shy about recommending you to others? I have found a few best practice referral techniques that you can use to help generate more referrals from your warm market and improve your bottom line dramatically.
1. Change the way you think about referrals.
Many books and articles are written about developing a “referral mindset.” Creating a referral mindset means that you must make the shift from being commission and sales-focused to becoming more of a long-term thinker. When you begin to imagine a referral-based business’s power to free you from the expense and grind of constant prospecting, you will find yourself doing more of the things that make getting referrals possible. You should always expect referrals; adopting this mindset will create the setting for referral harvesting.
2. Know your ideal client.
Too many advisors spread themselves thin over a wide range of clients in different phases of their financial lives. Before you implement a referral program, you need to know what kind of clients you want to add to your database. Once you discover this, it will be easier to find those “birds of a feather” who can introduce you to more people just like themselves.
3. Make a list of your best clients.
Once you know what kind of referrals you want, make a list of your top 10 to 15 clients. These are the people who are most likely to associate with your ideal demographic. Ask yourself, “Who do these people know that I would like to know?” A favored referral is generally an easier prospect with whom to work.