The first step in creating your referral marketing plan is to identify who you want to attract-your ideal client, or target market. As you write your initial list of adjectives and labels, search for words those clients would use to describe themselves. I am not wild about age ranges, but that could be part of it. Investable assets, as we discussed, offer you no value. People just don't walk around thinking to themselves, "I am a person with half a million in the bank." You will almost certainly write a number of things down that are too general to be useful on their own, but note them anyway. It's a place where we can start. "Pre-retiree" and "professional" come to mind. When words like that appear on your list, consider how you could narrow them down. "Pre-retirees with school-age children" and "self-employed professionals" are heading in the right direction.

Once you have some initial thoughts about who you believe is your ideal client and what is unique about you, bring it to your client advisory board. When I help an advisor organize a new advisory board, our first agenda almost always includes what I call the come, stay, leave questions. Why did you decide to start working with this advisor in the first place? What is it about what she does that keeps you with her? What is it she might inadvertently do that would make you leave?

Starting out with a discussion of what people find most valuable gives us the opportunity to progress to the question of what other people like them would also find valuable. We can start building a profile of the ideal client as a collection of needs and wants rather than the superficial labels people are likely to think of first. We may still end up with a description that includes career, age range, or life stage, but we start from a more productive place, so we don't necessarily get bogged down in the obvious categories.

Your advisory board is an important partner in this process. Most advisors believe they know enough about what their clients want to be able to make a list of the most valuable things their clients get from them. But limiting the conversation to the echo chamber of your own head has some serious limitations. I can't remember an advisory board meeting I've been part of where we were not surprised at least once. It might be tempting to skip over this step to save some money and to be able to progress a lot more quickly, but don't.

Once you have a description of your ideal client, do a little research into what else they may need. If you have had difficulty determining how to differentiate yourself from other advisors, you probably offer all the same things that many other advisors do. Part of what will make you referable is what you can offer your target client that they cannot find as easily from other advisors. Conduct research into your target market. You may find ideas in our trade journals. Depending on the definition of your target market, you may have a population that has its own trade journals or magazines that cater to a common interest. There may be books or research papers focused on a group whose members are similar to your ideal client.

I must emphasize the importance of looking at topics outside of the traditional financial planning space. If you address the same issues and offer the same services as other advisors, it will be very difficult to tell you apart from them. It can be profitable to discover other issues to discuss with clients because it adds value to the relationship.

At this point, you can begin to envision the future of your practice. Once you have a detailed description of your ideal clients and have done some due diligence on the issues most important to them, you can begin to define the ideal advisor for that client. What would the practice of a virtuoso advisor to your target clients look like? What kinds of services would it offer? What particular skill set would that advisor have? In many cases, I find that an advisor can give a significant boost to their value to clients by adding capabilities. For example, I worked with an advisor who came to define his ideal client as a vice president or higher level of employee of a public company. When we examined that population, we found that there were a number of issues peculiar to that group, including the need to deal with employer stock options and concentrated positions in employer stock. While he had some familiarity with those issues, we realized that a real expertise would clearly differentiate him from other advisors. Once you have identified additional skills that would be valuable to your ideal client, create a learning plan to develop those higher-level capabilities.

If you are already successful, you may be resistant to making any significant changes. That's perfectly reasonable. The fact is that what you have been doing so far has brought you the success you have realized. On the other hand, if you are not getting the referrals you want, something needs to change. As Rita Mae Brown paraphrased, simply continuing to do the same things and hoping for a different result is one way to define insanity. Contrary to what you have heard in most referral articles and seminars, simply asking for referrals more often or asking in a better way is not what will get people suddenly remembering to mention you. It's not about what you ask for, it is about who you are and what you do. If you want more referrals, you have to figure out how you are going to change to be more referable.

At this point, we can begin thinking about how you will define your differentiator. Once we have a good, clear vision of what the ideal practice for your target market delivers, how will we describe what makes that practice different from those of other advisors? What solution or experience does that practice deliver that makes it ideal for those particular clients?

But don't change anything yet! So far we have an idea of what your practice can represent, a draft. Before you take any action on it, we need to test it. It's time to go back to the client advisory board.

Explain to your advisory board what you are proposing to change and how you plan to describe it. Make sure it connects with them. See how enthusiastic they are about it. I have been in meetings where the board embraced new ideas (and subsequently became great referral sources). And I have facilitated meetings where the most valuable advice was not to proceed.

Blue Ocean Strategy
In determining which services to provide, let me propose a process of evaluating your options that will help you focus on the most highly valued, cost effective things you can do for your clients.

This approach comes from Blue Ocean Strategy, an article and later a book and institute created by W. Chan Kim and Renée Mauborgne. Their approach to value innovation helps to understand how to best utilize your resources to focus on providing the services your clients want most. Here is an oversimplified approach to the analysis. List all of the services you provide as part of your practice. Be specific. If there are separate pieces of your investment management process, list them individually. If your financial planning is delivered in modules, handle them separately, rather than simply saying "financial planning." Be thorough. If you or the people on your staff dedicate any substantial portion of their time to something on a regular basis (even if it's not frequent), make sure it's on the list.

Show this list to your clients. It would be a great agenda item for a client advisory board meeting. Include it at the end of a review appointment. Send it out as a survey. Find out which of these services your clients consider most valuable and least valuable. Ask them to rate each one on a scale of 1 to 10. Don't ask them to rank them in order-there may be two or three services that rate a 10 and two or three that rate a 2. What you want to find out is what clients think of each one individually.

Then calculate what it takes to deliver each one. You may buy a service, in which case determining cost is easy. It may be strictly a time commitment on the part of yourself or your staff-following up with attorneys, evaluating outside investments. Even preparing financial plans is much more an investment of time than it is in the cost of the planning platform. But do the best you can to evaluate the amount of resources each of those services requires.

Then graph each of those services with value to clients as one axis and cost as the other. An example of what it might look like is below. Your graph will not necessarily look like this. For this sample practice, the advisor provides individualized client web pages. Clients perceive this as somewhat valuable, and they are moderately expensive to provide. If you provide them, you might find that this is how it is for you, or you may find that clients find them highly valuable and that they are very inexpensive to provide.

Once you have all the services located on the graph, you are in a position to evaluate the merits of keeping or enhancing the services you provide. In the upper left corner of the graph are the services to which clients attach a high value and that are relatively inexpensive to provide. These are the services you really want to focus on. In the lower right corner of the graph are the services from which clients do not derive much benefit and that are expensive to provide. These are the services you will want to eliminate. These services are expensive to deliver but create significant value for clients, in the upper right corner, are candidates for analysis. You definitely want to keep them, but it may be worthwhile to investigate ways of doing them more efficiently. Services in the lower left quadrant, not particularly valuable to clients but not expensive to provide, are your call.





Whether or not to hold client events is an example of what one advisor discovered. He had been hosting both client education events and client appreciation events. In a survey he asked clients how valuable they found each type of event. The feedback he received was that clients loved the education events, appreciated what they learned at them, and often brought friends. The social events, on the other hand, were considered somewhat enjoyable but not at all important. "You just saved me $30,000," he reported. 

Your Communication Strategy
Once you have refined your service mix and have clarified what your target clients want most and consider most valuable, it's time to figure out how you will communicate your message to the world. Develop your value proposition and long and short versions of your elevator speech. Train your staff to describe your ideal client and to articulate the special value you represent. Teach your staff, your clients, and your centers of influence the trigger phrases that will help them recognize an ideal client and the fact that they need what you provide. Incorporate this message into your new employee orientation program, and discuss it or review case studies periodically at staff meetings.

Determine how you will have the new referral conversation with your clients. Script it and rehearse it. Develop a checklist you can use in preparing for client meetings to discover whom that client can introduce you to and how you will bring it up in conversation at the end of the meeting. Make a list of other advisors you can refer prospects to when they do not meet your target criteria. Practice the conversation you will have with a prospect when you refer them to another advisor and with your client when you let them know whom you sent their referral to. Make sure those conversations reinforce a description of your ideal client and the unique value you represent.

Update your marketing materials to reflect your new value proposition. (Don't forget to get the reaction of your client advisory board before you commit to your printer or web designer.) Develop a strategy for how you will get this message out on a regular basis-on your blog, in articles, or through public appearances. Discuss with your marketing agency or public relations consultant your ideal client and value proposition. Do whatever you can to make sure that when anyone discusses your firm in public, they are discussing your unique service offering and your target market. 

Now Take Action!
Succeeding in any business requires that you stand out from the crowd. And the more distinct and special your reputation, the easier it is to attract more clients. So many of the businesses held out to us as examples of the kind of service we should offer (Ritz-Carlton, Neiman Marcus) embody the concept of not just being better than their competition but providing a separate kind of experience from other companies in their industries.

Standing out in the financial services business is even more of a challenge, because for so many of us, what we do for clients doesn't just look or sound like what other advisors provide, it actually is the same as what other advisors provide. There are probably a lot of other professionals in your town who utilize the same asset management program, financial planning platform, wealth reporting system, or website provider as you do. Ultimately, however, we need to find a way to be different. 

Maybe it doesn't have to be this way. You could be the one who develops a new way to do things, provides services other advisors haven't thought of, and offers a custom-made experience designed especially for your target clients. People will end up talking about you because what they experienced when they met you was different from what they got from any other financial professional. Your reputation will spread as word gets around that within your professional niche you are the one to go see.

This article is an excerpt from the book, Stop Asking For Referrals (McGraw Hill, 2012), by Stephen Wershing, founder of The Client Driven Practice, which coaches advisors on how to create referral marketing plans. He is based in Pittsford, N.Y.