By Steve Kerby | November 23,
2020 at 01:14 AM
The best way to
find prospects is to have happy clients send you the prospects.
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.
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.
4. Give people two business cards, not one.
While this may seem too simplistic, it works. It works because
it sets the stage for the client to realize you need and want referrals. This
one is simple: when you hand out your cards, give everyone two instead of one.
Use this language; it has worked for me. “Here is my business card
for your friend who drives the most expensive car and has the most speeding
tickets.” Why that language? Because it is completely different, and they will
remember what you said.
5. Send thank you cards.
I always send thank you cards. In the card, I include my
business card with a note on the back of it saying, “If you know anyone who
might benefit from my information, please pass this along.”
Always send a thank you card to anyone who does send you a
referral. I usually include a $10 Starbucks gift card with a note saying, “Your
next latte is on me!”
6. Remove referral risk.
Asking for a referral is a little like asking someone to become
a matchmaker for you. One reason why people are hesitant to make introductions
is that they are afraid of being embarrassed. Your clients are putting their
reputations on the line for you. If you make a mistake that costs their friend,
family member, or colleague money, it might harm the relationship.
To remove some of this referral risk, you have to conduct your
practice in the most client-centric way possible. Let your referral source know
that you have a “white glove” procedure for handling each person they send your
way. Assure them that every referral you get is handled responsibly and
ethically.
It is possible to build a practice that is based entirely or
mostly on referrals. Many advisors have created referral-based businesses by
using specific protocols developed through understanding their ideal client
make up. Such protocols ensure a consistent approach based on bringing value
and exceptional service to every referral.
How you present yourself, the confidence you exude in the
information you provide clients, and the completeness of your fact finder given
back to them (typed) at the beginning of the second meeting will seal the deal.
The referrals become a natural part of your sales cycle.
Steve Kerby is a financial professional with Retire Village. He has
been selling life insurance and annuities for 51 years.
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