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Erosion is a Referral Strategy, a long term referral strategy. How did the Grand Canyon form? Erosion
Credit for this weeks 'Can I Borrow Your Car?' article goes to one of my clients Tyler Conley of Larson Wealth Management in Harrisonburg, VA. Tyler and I were having a coaching session earlier in the week, looking/exploring how to predict a specific amount of $$ revenue from his deep passion for hunting, and I was seeking a way to describe the difference between how so many pursue (if) referrals vs. intentionally working to be able to predict them.
“Erosion is a strategy…if you have forever” is what popped out of my mouth and it worked. Many ‘by referral’ financial advisors can credit, if they are honest, their success to erosion…gradual, consistent dripping/flow of presence in their communities and clients lives. A great example of erosion as a client acquisition strategy (passively or actively) is Rotary. These groups meet once per week and have dedicated slots for participants' professions. Over the years, my clients have both won and lost clients because of these groups.
Note: I am not saying that 'erosion' is a bad referral strategy...unless it is your only one.
Perhaps the first year you are in one of the groups you won’t get any referrals because everyone is getting to know you. Fast forward to 10 years later and over a thousand weekly meetings and you are going to potentially be top of mind to dozens of other business professionals whenever a financial advisory situation happens. Additionally, many of those professionals will have likely started working with you as a direct result of spending time with you and seeing you serve faithfully in your community. Erosion works…but, it takes time and is hard to put into your sales forecast.
This is why in my newest book “Can I Borrow Your Car?”, I talk about having both a macro and micro strategy for your referral growth.
Erosion, like being a member of Rotary or even a referral group, is a macro strategy.
The beauty of the right macro strategy is that even though they are long term in focus and revenue projections…they almost always result in some short term opportunities as well, but you can't predict that short term success.
What separates the amateur from the professional is the system that provides opportunities and the plan for how to carefully react to those opportunities (let along recognize them when they occur). Remember, unlike any other form of sales and marketing, when you are doing business by referral you are always ‘borrowing the car’ in that you are being loaned another person’s relationship. How you plan to drive that car and return it in better condition will determine whether or not you get to drive another car from that particular garage or not.
Let's be honest. Most of you are using erosion as a strategy (especially the more experienced advisors) because you survived the early years through cold calling, luck and/or family/warm market business. I know I am not the only one that cringes when I hear the words "orphan clients".
What to do now, whether you are brand new to financial services, or, you are a multi-decade leader of a 100+ advisor RIA?
Layer strategies as a part of a predictable referral system.
Erosion (aka community based referral strategies) is an excellent macro strategy to employ at any stage of your career and is one that I always recommend as a foundation for guaranteed success. However, you do need to layer in more micro referral strategies if you want to be able to ignore all the noise from social media, advertising and (shudder) automated marketing/emails. I feel your pain every time I open my email and/or look at my Linkedin messaging...
Want to learn more about how to put this all together for yourself and your organization? Please consider getting a copy of my newest book if you want to begin the process of getting predictable referrals. You can get a copy through Amazon, or at my website www.caniborrowyourcar.com
If you get anything from this article (I certainly hope you do!) I hope that you are more confident about what you can do to improve in the near and distant future. I get to work with other successful professionals like you every day and am blessed beyond measure as a result. You are capable of more AND you are able to enjoy the process of working towards it as well.
You can have success and a life that is full of joy. You do need to do some work to make that happen and to keep your life aligned (throw out that trash talk of work life balance…complete and utter nonsense).
- What makes you most alive?
- What really matters to you?
- Why aren’t you doing that as much as possible?
Those three questions are 100% relevant to getting predictable referrals. This is because when you are the most alive…you are the most referrable. People want to introduce people that are enjoying their lives, especially financial advisors, to other people. Your BMW or Porsche isn’t going to make them want to refer you, but your passion for life will do nicely.
Get out there and live.
Related: Advisors: Work the Top of Your Sales Funnel Correctly To Get Predicable Referrals