While the business may be different, the principle of honing in on those most likely to promote your services is just as applicable for investment advisors. The key is uncovering who among your current clients fit that description.
When identifying which clients to ask for referrals, you must also consider which client is most connected, and in turn, how far their good word will take you. In most cases, your biggest, wealthiest clients—the small percent that make up an outsized proportion of your business—are going to be the most connected. These people are extremely busy and very picky, to be sure, but given their position, it is worth the time and effort of asking them to help you drive your business’s growth.
Ask The Right Way
Once you’re sure you are providing the best quality service to your clients, and you have selected the best potential advocates for your business, you now have to begin the delicate process of the referral conversation. There’s a major but subtle distinction between a conversation and a “pitch.” Most people do not like to be pitched to, but having a conversation about needs and goals is much easier to transition into asking for a referral.
• Understand the psychology: Clients have people they care about in regards to their financial situation. Communicate that you value the people who are important to your clients by asking if they know people who could be helped with what you have talked about in that day’s meeting. Ask them to have their friends give you a call if you think they would be helped by having a short conversation about their questions or concerns. Mentioning that you won’t bring the referral on as a client unless your services fit with their needs shows you are selective in who you work with and provides you a non-offensive way out if the referral isn’t a good fit.
• Ask at the right time: This is important in at least two senses: scheduling a time to bring up referrals with clients, and bringing it up at the right point during the conversation. It’s important to write it down on your calendar when you plan to bring the question of referrals so that you have adequate time to cover it in your meeting. In many cases, the best time to ask is right after you finish reviewing their accounts and highlighting the outstanding results you have provided, but before you wrap up the business discussion.
• Keep it casual: As investment advisor coach Paul Kingsman puts it, keeping the referral request casual and comfortable shapes the request as a generous offer to help, rather than a hurdle your clients have to jump before they can leave their meeting with you. “You want to help your clients make the connection between how you help and conversations they have with their friends and family. And, you want to do that using effective language that sounds authentic, leaves everyone feeling good, and can be repeated over and over.”
• Make it easy to refer you: Gone are the days of handing out business cards for clients to share with their friends. In this digital age, consumers are empowered with a variety of data sources to do their own research before even contacting you. They expect you to have a modern website before even considering a call to your firm. According to marketing consultant Dan Allison, president of Feedback Marketing Group, advisors lose out on 80 percent of potential referrals because their clients can’t properly articulate the services their advisors offer. Your website should clearly outline your value proposition and all the products and services you offer, making that first call or meeting with a prospective client more beneficial to both parties.
The best thing about referrals is that they’re free. Unlike paying for ads or conference booths or speaking opportunities, referrals give you the opportunity to grow your business by catering to the people that are most likely to actually need your service and trust that you can meet their needs. If you feel that your business is ready to grow and you’re evaluating various growth strategies, there’s no question that referrals will give you the best bang for your buck. Just be sure to ask the right way.
Christopher Crawford is the director of advisor relationships for the Buffalo Funds in Mission, Kansas. With over 10 years of experience working with financial advisors supporting their business development efforts, Christopher notes that success for advisors begins with being a good communicator and a better listener.