One of the eternal frustrations for many advisors is that they have happy, satisfied clients who don’t refer on a regular basis. Ask an advisor how many satisfied clients they have and they may say upwards of 90%, but then ask that same advisor what percentage refer and the number usually drops below 10%!
What kinds of things can an advisor do to increase referrals more consistently? Let’s look at the five most common problems, and then the options for re-energizing your client base toward referring:
- Just because they like you doesn’t mean they will refer you. Although you are doing a great job for them, they may have very busy lives. You are not “top of mind” all of the time. They don’t think about you outside of the time they interact with you. In order to stay top of mind, make sure you have ways to connect with them on a consistent and ongoing basis. It isn’t enough to just send the monthly newsletter. Find articles of interest to pass along. Write a blog. Have ongoing events—in person and via webinars. Hold client conference calls. Reach out often in different ways to remind clients, more subtly, of the value you add.
- They know what you do for them, sort of. But they can’t translate it for other people and it isn’t enough to say, “I like my financial advisor and you should, too!” Be sure you are clear about the type of people you serve, the ways you serve them, and the problems you solve. Take the time to share stories and vignettes with clients about others you have helped and how you have helped them. Ask them directly if they know people in situations like the ones you are describing. Paint the picture clearly enough so they know who they are looking for, on your behalf. Turning clients into evangelists means you have to arm them with the story to tell.
- Clients think you give such high-touch service you could not possibly be interested in taking on new clients – it would just be too much! They may not realize you want referrals. While the idea of “just ask” falls short, making it clear to clients that your best source of new business is them is very important. Keep reminding them that you are hoping to be connected to others just like them over time in order to build your business, by serving clients well.
- There isn’t enough active engagement for clients to have a chance to refer. Your annual meeting is probably for the purpose of reviewing the client’s portfolio and life situation. Truth? They want the conversation to be about them, not about you. Now enough about their friends and family! They want the focus on them. You need to find other ways to build in engagement. Take them to lunch just to check in once per year. Invite them to a client advisory board meeting that is focused on steps to take to grow your business. Hold networking and referral meetings where they can bring others and perhaps enhance their relationships, while also enhancing yours. Build in these opportunities to your regular day-to-day activities.
- There may be nothing in it for them. Why should a client refer to you? Just because they are happy doesn’t mean they have to do anything more about it – after all, they are paying you a fee for services. It’s important to set up the desire for referrals at the outset. “What would have to happen in our relationship that you might want to refer us business? What steps would we need to take together to make this comfortable for you?” Or have a way to reward clients for referring. Send them tickets, or flowers or candy to say “thank you!” Be sure you get in their shoes and realize that referrals are for you, not for them. They may want to help a friend, but ultimately they might like to be acknowledged somehow, too.
If you are frustrated by the lack of referrals your satisfied clients bring, review this list. See if there is an area you could focus on to reenergize client referrals for 2013. Take it one step at a time.