Advisors know that referrals are a great way to generate new business. While most advisors do focus on generating referrals, many forget to spend time figuring out whether their businesses are worthy of getting those referrals in the first place, says Ken Unger, advisor coach and president of Million Dollar Producer, who spoke with Financial Planning about how advisors can make sure they deserve the business of their best clients’ friends, colleagues and family.
Q: How do I make my practice referral-worthy?
A: Advisors are looking to grow their practices and every practice management expert seems to be chanting, “focus on referrals,” with good reason: Referrals are a key source of new business for most advisors, and are far more likely to do business with you than a cold prospect.
A well-designed and executed referral system will leverage all of your marketing tactics by allowing satisfied clients to spread the word about your company and services. A referral-oriented marketing plan generates the best results when it uses a strong mix of strategies.
Although over 90% of all financial advisors claim they “deserve”, “encourage”, and “rely” on referrals, the sad truth is that few of them provide what we consider “referral-worthy” services. They may give good advice and even feel that they are providing elite services. However, if you rated their practice and the quality of their service, they would fall far short compared to the best advisors who truly provide high-end, high quality services. Very few advisors have a strong package of expertise and services required to become referral-worthy.
Here’s a simple equation to consider: Satisfied clients equals referrals. Financial advisors who offer a strong menu of services and prove they are experts in their field are the ones who will consistently earn referrals. It is critical to create a trusting, long-term relationship with your current clients not just for retention, but to generate referrals from your satisfied clients. If you are providing exemplary service to your current clients, they will want to reciprocate by referring new business to you. Two areas you need to revisit in order to evaluate the referral worthiness of your practice are your services menu and your marketing calendar.
Revisit your services menu and ask yourself the following two questions:
•“Am I providing a service that people will want to refer?”
•“What can I do to improve the services I offer to stand out from the rest?”
Then, take a look at your marketing calendar and ask yourself these questions:
•“Have I been visible?”
•“Do I provide non-threatening (non-sales oriented) forums for prospects and referrals?”
•“Do I ask for referrals?”
•“Does my office have a proactive and referral-friendly environment?”
Even if you answer “yes” to all of these questions, it is still healthy to hold an annual review of yourself and your practice to update and assess where you can improve the health of your practice overall as well as the success of your referral system.
A good general rule: Before you ask for a referral, make sure you deserve it. If you provide referral-worthy services, your chances of growing your practice through referrals will improve exponentially.