You Can Get Referrals. Just Don’t Ask for Them.

Duct-tape-over-mouthIn my previous blog post (Referrals? Don’t Bother Asking.), I suggested that most clients don’t feel the need to provide you with referrals because referrals are social currency, and your client has already compensated you (with fees, commissions, or both) for the work you did for him.  Unless he feels the need to increase his social status in your eyes, he has little incentive to provide you with referrals.  And, it’s likely that any referral you would get (as a result of asking) may not be ready to work with you right now.  Have you ever called a referral only to find that he isn’t actually ready to solve a problem that he may have (or may not even have a pressing problem at all)?  Who needs referrals who aren’t ready to do business?

In that post, I recommended that you must do two things to get referrals.  First, make certain that your client can easily talk about what you do and how you’ve helped him, so that when a situation does present itself, you’ll come to the top of the list as a solution. And, also give him something so remarkable to talk about that he will spontaneously combust if he doesn’t tell everyone what you did for him (so that he creates the situation himself, rather than waiting for it to happen).

      Before we continue, I’m also going to tell you that asking for referrals creates a negative experience for the client. No matter how much goodwill you created with the work you’ve done to help him, you just lost some of that goodwill by putting pressure on the client to provide you with a name of a friend, relative, or associate (out of the blue) before the end of your meeting. What you’ve done is made a withdrawal from your client’s emotional bank account. Do that every time you meet with him and you may end up with a negative balance in the account.

      So, how can you show your client how you are helping him?  There are many ways to do this, but here are two suggestions:

  • Open every review meeting with a list of specific issues that the client has asked you to help him solve.  And close every review meeting by summarizing those issues, explain exactly how you’re helping him to solve each one, and provide him with the current status.  These issues (i.e., goals) should be SMART – Specific, Measurable, Attainable, Relevant, and Time-bound. (Read more about SMART goals here.)  The less ‘SMART’ they are, the less likely that he will be able to talk about them when provided the opportunity. If you’re only helping him with ‘financial planning’, he won’t know how to explain what you’ve done for him to someone that he meets.  But, if he knows how much he’s going to need to send his kid to college and that he’s 50% there (and his son is currently in 3rd grade) — that’s something he can explain (by the way, that’s also pretty remarkable as well).
  • Keep your client focused on the results you are obtaining for him, not on the strategies or products that you are using.  He shouldn’t be telling anyone that he just bought a mutual fund or an annuity from you (especially if he doesn’t know why he did that).  He shouldn’t be talking about the features and benefits of the fund or annuity. Instead, he must be able to say ‘My adviser is doing a great job helping me to build a fund for my kid to go college.’  And, he must be able to offer specifics on just how you did this.  (“He found college cost projections for three schools we would like our son to attend, then showed us the amount we will need to save, helped us find money in our budget, and also opened an account for us to begin saving.”)

Your client will be overjoyed to talk about you without even being asked if he has something interesting, surprising, or unusual to say about you or something you did for him – something ‘remarkable’.  You had your assistant send him a birthday card – no, not remarkable in the least. Every adviser does this (we learn it on the first day of adviser camp). Called him on his birthday.  Better, but no.  Took him to lunch. Getting warmer. Sent him a sleeve of his favorite golf balls.  Better still (at least you knew which ones to send). Sent him an autographed note from his favorite golfer. Now we’re talking. But what if you were able to conference in his favorite pro golfer on the phone with you and him? No way! “I’ve gotta tell you what my financial adviser did on my birthday three years ago. You won’t believe what a great guy he is.” Remarkable? Yes, jackpot (He’s actually still talking about it three years later)!  Was it easy to do? Probably not.That’s likely what made it remarkable. By the way, you don’t need a special occasion for this (like his birthday).  Something can be even more remarkable when it’s done for seemingly no reason.

So ‘remark-able’ is surprising, unusual, out-of-the-ordinary, unexpected. It should be positive.  It should be personal – the more personal, the better. It will likely take some effort. Or at least it must look that way. When ‘remarkable’ occurs, we want to tell others about it as John Jantsch does with this story excerpted from his book ‘The Referral Engine’:

“One day my wife and I hit a sale at the outdoor gear retailer REI. During the trip she found a coat that she loved and bought it. A few weeks later, we went to an outdoor event and she took the opportunity to wear her new coat. As we went out the door she reached into the pocket and found a little slip of paper.

She pulled the slip out fully expecting something along the lines of “Inspected by #48.” Instead, the note read “You are a goddess!” That simple, unexpected message made her day. Of course, we both wondered, who made this coat? I checked the manufacturer’s Web site and discovered a very cool little garment company called Isis (www.isisfor, located in Burlington, Vermont.

This creative act, unrelated to the quality, cut, or color of the coat in question, compelled us both to think fondly of this company and voluntarily refer them to anyone who would listen. Something I’m doing right now.”

So, how do you help your client understand how you’re helping him, so that he can easily explain why someone should talk to you about a similar problem? What have you done that was so remarkable that your client wants to tell anyone who would listen? Share your thoughts with us in the comments.


Referrals? Don’t Bother Asking.

by George Ray

I just finished reading another article on how financial advisers should be asking for referrals. This one titled “Getting Referrals Your Own Way” by Ellen Uzelac appeared in Investment Advisor magazine ( on the web) in the August issue. It says that 90% of advisers don’t ask for referrals – even after firms host sweepstakes, offering luxury vacations.  These articles appear in the financial services magazines regularly. In fact, a quick Google search of the thinkadvisor website using the word ‘referrals’ produced 874 results – just from one financial advisor publication.

The article mentions Invesco’s new “Preferral’ program which begins ‘with a line that says something like this: “You have probably noticed that I don’t often ask you for introductions. That’s because I never want to make you feel uncomfortable, or seem like I am more concerned with my business than your family’s financial well-being.”

I can just imagine the client thinking: So why are you bothering me with this now? Just because you’ve never asked before doesn’t make it OK now. Just leave me alone. Are we done? Can I go now?

The article goes on to suggest that making the referral request more ‘personal’ by making an ‘appeal that emphasizes an individual advisor’s genuine thoughts, feelings and concerns’ is supposed to make this work.  Really?

20th Referral ImageLook, everyone has their own take on what works in terms of getting more referrals, better referrals, etc. There are referral coaches and lots of books about the subject.  But I truly believe that asking for referrals is not the answer.  In fact, if you have to ask, you won’t be getting anything that’s actually worth something.  And the more you ask for them, the less each one will be worth.  I heard a speaker once say that he could guarantee that his method would get you twenty referrals every time you asked for them.  So, how much do think the twentieth referral would be worth?

Let’s get something straight. You must understand that your client has no obligation to make a referral to you. Yes, even if you tell him that it’s one of the ways that you get compensated. (Most clients have heard that one, and are saying to themselves “No, I already did compensate you for the work you did for me.”)

Secondly, you should know that referrals are a form of social currency. If I make a referral, I’m making it to raise my status with whomever I am giving that referral to.  I’m essentially saying, “I know just the person that can help you with your problem. I’ve already vetted them for you.  I feel very comfortable telling you about them because I know that it won’t come back to haunt me. I’m secure in the fact that they will do a great job and you will come back with your problem solved, a big grin on your face, and a huge thank you for me. And, as a result, I know that to you I will now be a more valuable friend, associate, relative, etc.”

So, the client doesn’t receive an increase in social status by giving you a referral, Mr. Adviser.  Remember, you work for him.  And, he’s paying you.  In his mind, he’s already above you. Yes, you are his financial adviser, but essentially you are his employee — like his gardener, or his plumber.

Now, he may well refer his gardener or his plumber to someone in need of those services.  If he does, it’s for two reasons.  Firstly, he can say exactly what services are performed by this person. “I had a leaky faucet in the bathroom. This guy came and fixed it in five minutes, only charged me half of his regular rate, since it wasn’t a big job, and he was on time and put little booties on over his shoes when he came in the front door.”

Secondly, in order to get referrals, your clients need to be able to easily ‘remark’ about you to their friends and associates.  In order to get them to ‘remark’, you must make yourself ‘remark-able’.  The plumber did several things that made him stand out (i.e., ‘remarkable’) from other plumbers – only charging half his regular rate, being on time, and keeping the house clean by putting on his booties.

So, your client must know exactly how you have helped them, and your services must be outstanding compared to the ‘typical’ financial adviser.  If you satisfy both of these criteria, you’ll get referrals –without even asking.  But I believe that most advisers do a poor job at satisfying either one of these criteria – which is why they must attempt to beg ask for referrals (which, by the way, lowers their own social status in their client’s eyes every time they ask).

How can you make sure that your clients understand exactly what you do and how it has helped them? How can you make your services ‘remarkable’ enough to make your clients want to talk about you? Let’s discuss this in a future post.