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January 22, 2010 |
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Increasing Referrals By Making Referrals |
(Dow Jones) Steve Saenz, founder of Advisor Solutions Network, an Atlanta-based
consortium of practice-management consultants to financial advisors,
says advisors who want to increase referrals by making clients their
advocates in the marketplace should build teams of experts that can
meet every client need. Here are excerpts from a discussion with Saenz
on this topic.
Q: Everyone knows that client referrals are vital generators
of new business, yet many advisers have trouble getting them. What are
they doing wrong?
A: They're using failed approaches such as timing
strategies. "Ask clients for names right when they become clients
because that's when they're happiest," is the conventional wisdom. But
clients and advisors find this approach really awkward. The successful
route is for advisors to build genuine loyalty among their clients by
deepening their relationships with them, and by creating an experience
that is so exceptional that clients become true advocates who want to
refer people.
Q: How do advisors create such relationships?
A: The endgame is to create a network of top professionals
that advisors can refer clients to. Advisors should start with their
top 25 clients by net worth, and single out the ones they like and know
best. Talk with them about non-financial concerns and issues coming
down the road, the problems and challenges they face that go beyond
their portfolios. Advisors should say that they want to be better
advocates for clients in the coming year and help them solve more of
their problems and concerns, and that they'll do this by creating a
network of top industry professionals.
From there, they should ask their best clients to share with
them the exceptional people they know in various industries. Give them
a list of maybe 20 different professions and ask them for the names of
anyone who they think is truly exceptional at what they do. This
usually results in three to five names from a client. Get the names and
ask the client for an introduction.
Q: What type of professionals are you trying to find and work with?
A: The obvious ones are accountants, various types of
attorneys and real estate professionals. But advisors' networks should
also consist of the full range of people clients need to tap. It could
be architects, personal trainers and so on. Advisors need to tailor the
list around the needs of their specific client base. If they live in
Newport Beach, having a yacht broker makes sense. In Florida, having a
golf pro makes more sense than if they work in Minneapolis.
Q: And then the advisor should meet with these professionals and ask them to become part of their network?
A: Yes. Build a network of professionals so that if and when
another client mentions a specific need, they can give them two or
three names—people who they know and who give them confidence that the
client will be taken care of. When advisers help people plan their
futures, they add value, but being in a position to solve specific
problems as they arise. They need to identify the transitional
challenges and opportunities that clients could face. They build a
deeper connection when they talk to clients about their lives and their
non-investment issues, and that in turn leads to loyalty. And loyal
clients become true advocates, one who will tell friends about the
adviser without the adviser ever having to ask for a referral.
Copyright (c) 2010, Dow Jones. For more information about Dow Jones' services for advisors, please click here.
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Discussion
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CONFERENCES
Dorothy 
