Part 1 of 5 – Getting a Steady Flow of Profitable Referrals

(reading time 3 1/2 minutes)

Money flowing from faucetThere’s only one thing that’s more exciting than getting a profitable referral. It’s getting a steady flow of them.

This stream of referrals would allow you to market less and have more time for the things you truly love. You could also spend more time in front of clients or prospects. Or you could spend more time with friends and family.

Sounds good doesn’t it?

This series of blogs will cover how to get a STEADY flow of profitable referrals.

This series is for you if you’re a financial professional and want the following:

  • A steady flow of referrals
  • More profitable referrals
  • Higher fees and commissions
  • The ability to market less and do more of what you truly enjoy

If you’re like most advisors I know, you enjoy helping clients reach their goals. You want to make a difference. But many of you are frustrated because you’re not able to help enough people.

You have a lot of your plate. You’re networking (live and on social media), giving presentations, cold calling, making sure that you’re not breaking any compliance rules. You have to run the business side of your office, manage your staff, and service your clients and manage their finances.

Some advisors have “hit the wall” because when they approach 100 plus clients they can’t figure out how to manage your time/clients/business/staff and still have time to actually promote growth.

You have to spend a lot of time marketing to find more people—too much time.

This blog series will help you spend less time hunting for new clients because you’re getting more referrals. I’ll show you how to put in place my Five-Star Referral System that will get you a steady flow of profitable referrals.

It’s called a Five-Star Referral System because there are five pieces. You get a star for each piece you put in place. When you have all five in place, you have a five-star system. This is the same strategy my clients use to achieve outstanding results.

You will learn:

  • The surest way to get clients to refer to you
  • How to position yourself to be the logical choice
  • The four best times to “ask” for referrals
  • How to educate referral sources
  • How to maximize the quantity and quality of referrals
  • Exactly what to say to get referrals without even having to “ask”

You’ll notice I put quotation marks around the word ask. That’s because there’s a way to ask for referrals without really asking. We’ll be talking about that.

There are five parts to this system. For this system to work, you have to put all the ingredients together. It’s like baking a loaf of bread. If you don’t put in salt, it will taste flat. If you don’t put in yeast and let the loaf rise, you bread will be really flat. You have to use all the ingredients.

The Referral Conundrum

For years the gurus have said to get referrals you must ask for them. A lot of planners were reluctant to ask (and I think with good reason). There were programs to help you overcome your reluctance that would outline systems and scripts.

In 2012 there was a 180 degree reversal and a new mantra: “Don’t ask! If you ask, you’re hurting your relationship with your clients and doing more harm than good. It’s unprofessional. It doesn’t work.” Instead, they proposed that you romance your clients so thoroughly that when one of their  friend’s needs an advisor, they’ll send him/her to you.

I led a discussion on LinkedIn about whether to ask or not ask for referrals. It was a lively discussion. A small majority were in the “ask” camp. What both sides agreed on is—you have to be referable.

So whether to ask or not ask is NOT the question. The better question is: How will you make yourself referable to your clients?

I used to struggle with referrals. Then I learned a strategic secret I’ll pass on to you.

Here’s how referrals work in the real world.

Clients typically don’t give referrals because they were asked to by their financial adviser. Instead, they refer because their friend described a financial need or their friend asked for a recommendation. (Source: “Anatomy of a Referral,” Julie Littlechild at Advisor Impact.)

Ninety eight percent of clients find their advisors by a referral from a friend, colleague, or center of influence. Only 2% of clients make a referral when asked. This doesn’t mean you shouldn’t ask. If asking is working for you, by all means keep doing it. If it’s not broke, don’t fix it.

What these statistics mean is there’s something else that’s far more important than whether you ask or how you ask. What’s more important is this: Your client has to think of you when someone he/she knows needs your services.

All your efforts have to be geared towards making this happen. Using the Five-Star Referral system I’m giving you, you can train your client and condition him/her to do this. Here’s the first step.

Getting a steady stream of referrals is all about building a strong partnership with your clients from the get go in keeping them engaged. Engaged clients are the ones who will refer to you.

The next blog in this Five-Star Referral System series will spell out for you this first step about how to get your clients fully engaged so you will be top-of-mind and they’ll naturally refer to you.

I’d really love to hear from everyone about your experiences. What have you done, how has it worked for you?

Be the best you can with Stan the Mann

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