ORLANDO - The secret to generating referrals is to stop asking and start earning them.
“If you want to make a client uncomfortable, you should ask them for a referral,” Thomas Fross, the CEO of Platinum Advisor Strategies, said Thursday at the Platinum Top Producers Boot Camp.
According to a study by the Oeshsli Institute, 83% of clients said they felt uncomfortable when asked for a referral. Fross, who runs Fross & Fross Wealth Management, says it feels “desperate” when advisors ask for a referral. So, Fross rhetorically asked an audience of more than 200 independent advisors, why does every expert and book tell advisors to ask for referrals?
“Our industry still thinks asking for referrals works, and it does not,” he said. “People are afraid to send people our way. They are worried about how it will impact the level of service that they receive.”
To duplicate your best clients, advisors need to examine their best clients and look for people exactly like them, Fross said. He said his “A ha” moment came in 2005. His firm was spending heavily on public marketing and generating “very little if any” referrals from existing clients. It was then that he realized the key to getting more clients is by “taking insanely good care of current clients.”
“They will tell people about you. They will become apostles,” he said. “That is when we started picking up $50 million a year in new business. Suddenly, we had 200 new employees that we call clients who were generating new clients for us.”
Beyond just professional relationships, it is critical for advisors to build social relationships with their current clients, Fross said. According to Oeshsli, nine out of 10 affluent investors with both a business and a social relationship with an advisor feel “very comfortable” introducing advisors to their circle of friends, but only 28% of affluent individuals have that type of dual relationship.
Fross said advisors need to really get to know their clients. “Get to know their hobbies, their anniversaries, and get to know what is important to them,” he said. “You need to immerse yourself in their lives and they won’t be able to keep you a secret.”
Advisors need to make social relationship building part of their schedule, Fross said. He said his firm schedules time each Friday afternoon to spend time socially with client and their friends.
“Go golfing, go fishing, go shooting or riding with them,” he said. “Get to know your clients. … Our clients are like children. They want more attention. They are begging for it.”
According to Oeshsli, 56% of affluent individuals said they found their primary advisor through a personal introduction and 31% said a key variable to selecting an advisors was getting a recommendation from a trusted individual.
“People don’t want to meet their advisor through an ad or a seminar, they want to be personally introduced,” Fross said.
Fross said it is critical at these event not to initiate conversations about business. “Let the client or the prospect bring it up,” he said. “Take time to get to know your clients. Learn about their children and their grandchildren. Work on building that relationship.”
Most clients are nervous that if your business grows, they will lose service, but Fross says if advisors offer impeccable service, clients “won’t be able to help themselves.”