Financial Advisors Should Foster a Referral Attitude in Everything They Do

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Generating Referrals is a Bright Idea

If you could change your business model so that you were only accepting new clients who were referred to you, would you spend the time and effort implementing the necessary strategies? This post is about what’s involved in turning your practice into a referral only model.

As presented here, these strategies are simplified in the interest of brevity. When working with my clients, I provide guidelines and examples for how to implement each one of these points.

What is the first step to getting referrals?

It is actually earning the right to receive a referral. If you up and start asking your clients “Write down the names of five referrals here on this piece of paper,” do you think that will work? Heck no! Proponents of this method of generating referrals are old school. I’m not sure that method ever worked.

The first step in generating referrals is to send out a survey

Find out how you’re doing in the eyes of your clients. You can also use this opportunity to find out what services your clients would like you to offer, what clubs and organizations they belong to (speaking opportunities), and what frequency of contact they would prefer. I have a survey format that includes everything you would like to learn.

The second step is to implement a Client Service Matrix

Once you know what clients want, get busy and create an excel spreadsheet detailing all the services your clients will receive. Make sure to include Client Appreciation Events. Use this opportunity to plan out your communications strategy. Break your spreadsheet down by A, B, C, or Platinum, Gold, Silver. You can publicize this matrix or you can keep it private. It’s up to you.

The third step is to create a Referral Campaign

Once you have addressed service issues, how often you will communicate with clients, and the services they want, then and only then can you begin your referral campaign. Once you have happy, raving-fan clients, THEN you can ask for referrals and be successful at receiving them.

A referral campaign is simply a series of communications that are focused on generating referrals, generally three touches over 6-12 months.

It can be: A letter, a postcard, and a phone call

Or: A letter, an invitation to a client appreciation event, and a phone call

The fourth step is to foster a referral attitude in everything your firm does

• Conversations with clients: We are a wealth management firm that welcomes new clients through referral only.
• Talk about marketing: We don’t do many marketing events these days as we want to grow through referral only
• Mention referrals: Every communication should mention referrals in a natural, genuine manner. For example, if you send out a midyear update mailer, at the end the article mention that you would be happy to help your clients’ friends and families with issues you have brought up.
• Articles you send: If you send out an article about the coming tax changes, mention at the end of the article that this issue will impact millions of people and that if their friends and family would like to explore how they can update their financial planning to take into account these changes, you would be happy to help.
• Client touches: What types of client touches do you generally receive? How can you naturally incorporate referrals? For service calls say for an update to beneficiaries – an event happened – who did it affect? Is there a way to offer to help that person?
• Get staff buy in – Everyone in your firm should be responsible for growing the firm. It’s not just your job! Have a Referral Brainstorming Meeting and ask your staff for ideas; what are natural ways for them to ask for referrals?
• Referral Bonus Program: Give incentive bonuses to your staff for fostering referrals. Base compensation on how much your staff improves service, improves productivity, and generates referrals.
• Client Review Meetings: Add a line item on your Agenda that will help you remember to ask for referrals. Read How to Have a Referral Conversation – Referral Scripts Galore
• Client Appreciation Events: Suggest that your clients can always bring their friends and family to your events.
• Educate Clients Regarding Referable Situations – How will your clients know when to refer you? Use this handy list that details situations and opportunities for referral.

So as you can see, generating referrals is not as simple as asking for them. You have to deserve them. You have to focus on getting them. You have to actually TAKE ACTION! My clients have had great success at reinventing their practices by focusing on these principles.