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Growing your business through client referrals is an active strategy that needs to be driven. You cannot wait around for something to happen. Years ago, a property developer shared this observation; “Regardless how wealthy they might be, everybody needs something.” How can you get clients seriously focusing on referring business?
One of the first things everyone is taught when brining up referrals is “the more specific you can be, the better.” At one extreme is the statement: “Do you know anyone I can help?” Often, the other person’s mind goes blank. It sounds too vague.
1. They know plenty of people just like themselves.
You have heard, “birds of a feather flock together.” If they are at a certain age and income level, chances are the rest of their crowd is too. Think of your graduating class from college. Ask: “Who else is approaching retirement” or facing the same life events as them.
2. Who complains about their advisor?
You provide good service. Your client is happy. The stock market has ups and downs, but they feel you will be in touch if anything needs attention. They know people who are not getting this level of attention. Instead of asking them to look for someone who came into money, ask them to look for someone who is dissatisfied with their current advisor. Another approach is “Who do you know using managed money that is dissatisfied with the relationship?”
3. You have provided smooth sailing.
Years ago, I was on the board of a local preschool. The Director regularly brought up problems needing attention at board meetings. Then we got a new Director. Suddenly there were no problems. I spoke with her about this dramatic change. She explained “We still have problems, but I take care of them.” The stock market still has ups and downs, but your client feels you keep on top of things and will be in touch when necessary. Remind your client of your harmonious relationship. Do they know anyone who would benefit from a similar relationship?
4. You solved a specific problem.
Your client came to you with a problem. You solved it. Perhaps it involved setting up a retirement plan, consolidating smaller accounts held elsewhere. Remind them how you helped. Who do they know who would benefit from the same help?
5. The generational introduction.
You and your client have been together for decades. Their children are now adults. They are also heirs on retirement accounts. Have their children become clients yet? Have you met them? Make the case you will probably meet someday, probably after a funeral. Wouldn’t it be better to meet now, under happier circumstances?
6. Who else wants to learn?
Issues involving taxes are often complex. You might have helped a client. They are happy with the outcome, but would find it difficult to explain to someone what you did. They know other people with the same situation. A simple example might be donating stock with long term capital gains to meet your capital campaign pledge obligation. This made sense for many reasons. Who else would like to learn about the logic of donating appreciated stock to charity?
7. Who handles investments at their nonprofit?
Your client serves on the board of a local charity. It has been around forever. They have a finance or investment committee. Because the charity awards scholarships, they have a pool of money invested (or should be invested) for the long term. Is this the case at their nonprofit? Can they introduce you to someone on the investment committee?
8. Who has recently lost a spouse or partner?
You do not want to be predatory. Neither does your client. If your clientele is older, they have friends who have lost someone important to them. They need to sort through the financial paperwork. It can seem daunting. Your client might want to help, but they don’t know how. Let your client know you would be glad to talk with them if they do not have someone already helping them.
9. Has a friend recently bought a business?
Financial professionals often think of investing as owning stocks and bonds. Some people buy actual freestanding businesses. It might be a fast food franchise, but it could be the local drycleaner, because the owner is retiring. They might want to look at their benefits package and retirement plan provider, then determine if changing providers is a good idea. Can you help?
10. Money in motion.
This is the most obvious opportunity. Does your client know someone who received a windfall inheritance or won the lottery. Perhaps they sold their home or business? They will want to put that money to work. Maybe they have an advisor, but maybe not.
Your clients have plenty of opportunities to refer business. They might not be aware of the many ways you can help.