3 Ways Advisors Can Get
More High Quality Referrals
The easiest and most effective way to generate a steady stream of new business is by getting referrals. While you can certainly generate new clients from cold calling, it just isn’t a reliable or sustainable way to get really high quality clients.
But… most advisors I've work with have no idea how to intentionally generate more referrals. In fact, most of the referrals they do get happen by accident. (Note: Asking "who else do you know that has lots of money and would like my service" doesn't count as getting a referral)
Referrals are by far the best quality prospects you will ever get. It’s not enough to just hope people tell their friends about you and something comes of it. You need to install systems and process that engineer and orchestrate referrals on a consistent and predictable basis.
The "Attracting Affluent Clients On Autopilot" System
Step 1) Identify — Uncover your most profitable opportunities
Step 2) Position — Establish authority in the niche market
Step 3) Attract — Get qualified prospects to come to you
Step 4) Engage — Educate and motivate prospects to take action
Step 5) Enroll — Selling conversations that convert prospects into customers
Step 6) Deliver — Designing and delivering an ideal customer experience
Step 7) Retain — Creating long term clients out of first time customers
Step 8) Refer — Getting high quality referrals to high value prospects
In this article, I am going to reveal some of my favorite strategies for creating high quality referrals that don’t require any awkward “who do you know” conversations or outbound sales activity.
Mastering the referral process is critical to building a thriving practice with wealthy clients. It is the only way to gain access the upper echelon prospects. Having solid endorsements and testimonials is the “street cred” you need to run with the big dogs.
If you don’t master the referral process, you’re going to have and extremely difficult time attracting affluent clients. Without references and endorsements, it will be difficult to gain the trust of wealthy prospects.
11 Reasons Why Referrals Rock
I’m sure you don’t need a ton of convincing that referrals are awesome… but just in case you do, here are 11 reasons:
- 65% of a company’s new business is from referrals – New York Times
- 84% of global consumers believe recommendations from friends and family are the most trustworthy sources of information about products, up from 78% in 2007 — Nielsen
- Customers trust recommendations from friends and family more than any other form of advertising – Neilsen
- 83% of consumers are comfortable making a referral after a positive experience- Texas Tech University
- 85% of a business’ Facebook fans are likely to recommend the business –Syncapse
- Offering a reward increases the likelihood of referral, but the reward size may not matter – American Marketing Association
- Customers are 4x more likely to buy when referred by a friend – Neilsen
- A referred customer is 18% more loyal than a customer acquired through a different method – Journal of Marketing
- The lifetime value of a referred customer is 16% higher than a non-referred customer – Journal of Marketing
- A referred customer spends 13.2% more than a non-referred customer – Journal of Marketing
- Customers referred by other customers have a 37% higher retention rate — Deloitte
Long story short, it pays big money to get more referrals. So what’s the secret to getting a steady stream of referrals? Become more referrable!
The REAL Reason Why People Give Referrals
Have you ever thought about why people actually give referrals? The answer might surprise you.
The real reason why people give referrals is to improve their social standing among friends.
Yup. We give people referrals so we can look cool.
Think about it. How much satisfaction do you get when you tell your friends about something cool they didn’t know about? Especially when they love it and now have to forever credit you with introducing you to that thing?
If you’re like me, you like it a lot.
But… it really sucks when I tell a friend to go try out a new restaurant I like and they had a bad experience. Now I’m the guy who gave them a bad recommendation.
And no one wants to be that guy.
When you think about it, giving a referral is a pretty risky thing. Especially for someone who is wealthy. Whenever someone makes a referral or a recommendation, they are putting their name on the line. Even more importantly, they are putting their cool card on the line.
3 Ways to Engineer Referrals
When we talk about referrals, what we are really talking about is getting introduced. At all times, we want our prospects to come to us... not spend our time chasing prospects.
Keep in mind that your clients aren't professional sales people and have no idea how to tell their friends what you really do... or for that matter what kinds of people you want to meet.
This is why having a clearly defined niche is really important. The more clarity you have around what kinds of problems you solve and what kinds of clients you are looking for, the easier it is to find them.
Assuming you have a clearly defined target market... the secret to engineering referrals is to create low-pressure, low-risk ways for people to introduce you to their friends.
Here are three easy to implement ideas:
1) Deliver a Killer Service With a Clear Value Proposition
This might seem like a "no duh" kind of thing to list... but apparently its not very obvious because most customer service just sucks.
One of the easiest ways to get clients to refer business to you is to actually deliver a great customer experience. But... if they don't actually know what it is you do for them, they are going to have a difficult time telling their friends why they should work with you.
Whenever it is appropriate (which is always), ask your client what it is they think they do for you. If what they think you do for them isn't aligned with your value proposition... you know where your problem is.
Your value proposition has two components:
- The Technical Aspect: This is actually doing a good job at the thing you're supposed to be doing.
- The Emotional Aspect: How your clients feel about doing business with you.
It’s not enough to just do a good job from a technical perspective… you need to help your clients feel good when they do business with you. The more your client feels like they are being taken care of and they have a (relatively) friction free experience... they are always going to leave your office with positive emotions.
When you are crafting your value proposition, it's very important that you use the words that your clients use and NOT the words you would use.
Clients say things like "I love working with you because I never have to worry [emotional] about dealing with all the complicated tax issues my business creates [technical]" or "I really like having an expert I can turn to when I have questions [emotional] about investing and saving for my retirement [technical]".
Experts and corporations say stuff like: "Delivering value, excellence, and quality since 1992" or "Unparalleled excellence in financial preparedness" or some other non-sense that no human would ever say.
Make sure that you and your client are on the same page about the problems you are solving for them! If you can't explain it in one sentence what you do for your client, there is no way your client will be able to explain it to their friends.
2) Content Marketing
While we absolutely want our clients to tell their friends about what you do... sometimes they can do more harm than good.
The best thing you can do is create some kind of content your clients can send to their friend that helps educate them about what you do. It could be a book you wrote, a video you created, or a blog post on your website.
Both the referrer and referral really like this because it sets up a no-pressure, no-risk introduction. No one has to put themselves in an awkward situation where someone feels like they are going to get sold something.
3) Live Events
There is no better way to help your clients look cool than by hosting events that they can invite their friends to.
If you aren’t running a monthly live event, you should seriously consider it. It could be a client appreciation dinner, an executive roundtable, some kind of workshop, or just a simple networking event where you introduce people you know.
One of the biggest benefits of a live event is the element of social proof. When a potential prospect is in a room full of other people you work with... it makes it so much easier to say yes to working with you. You also get the added bonus of being positioned as an authority when you are the host.
Additionally, you have the chance to create a ton of value for the people you know by introducing them to other potential clients and referral sources.
The One Thing You Must ALWAYS Do To Get More Referrals...
Relationships are extremely important when it comes to generating referrals. People want to work with people they know, like, and trust. If you aren’t doing things on a regular basis to build and maintain those relationships… they aren’t going to have much of a reason to send business to you.
It amazes me how many advisors completely drop the ball on this one.
One of the easiest things you can do is to show your gratitude and appreciation whenever you get a referral. Not some canned “thank you” email you send a month later. Pick up the phone and call them. Send them a gift in the mail with a hand written card.
If you implemented only one idea from this article, make it this one. The more you can help people feel good about sending business to you, the more they will want to do it.
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