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Last week I was out of town installing the foundation of my Predictable Referral System based on my “Can I Borrow Your Car? How Successful Financial Advisors Grow Their Business and Love Their Life.”
As always, a lot of time was spent on the current structure of their sales system and specifically how they currently get and give referrals. Most networks fail to produce the needed and/or desired sales results for financial advisors based upon structural issues.
I am a big fan of Rachel Botsman and her writings. This week's article is absolute gold. Read her article here.
Rachel identifies 5 areas structures fail.
- The structure is not strong or tough enough to support the load.
- The structure becomes unstable due to fatigue or corrosion.
- The structure fails because of use of the wrong or defective materials.
- The structure is not properly maintained or cared for.
- The structure fails because of an external event like a natural disaster.
I am going to quickly identify how I believe this applies to #referrals.
- The structure is not strong enough or tough enough. Is your network resilient? Too often I see clients that are over centralized with just a few referral sources. While it’s great to have a few key referral sources that refer regularly, you need to make sure that you have a deep bench of ESP’s (Expert Service Providers) that is continually expanding. Remember, giving takes work.
- The structure becomes unstable due to fatigue or corrosion. Do you enjoy your referral system, or is it a chore? I always tell clients when building the structure of their own referral system that we must pass two tests: Do you believe it will work AND do you want to do the work? Corrosion also comes from being a #referralpredator and only having a ‘taking’ system.
- The structure fails because of the wrong materials. This is absolutely the case in 99% of the businesses I come across. Your network’s structural integrity is based upon the ethics and competency of the professionals you are referring to.
- The structure is not properly maintained or cared for. Yup, that is a home run as well. So often, networks are only valued and given attention to when everything else fails. We always take relationships for granted, it seems, until we really need them to work.
- The structure fails because of an external event like a natural disaster. This one is a bit harder to apply. When I read that, I think of systemic change in the industry and how you need to have a wider network that can adjust if, for example, the AUM service model becomes disrupted by AI (hint: it is happening) and/or regulations make it too expensive. At that point, having a network that would allow you to evaluate new business models would be invaluable…and impossible to create quickly.
If you took an hour or two and did a review of your referral network what would you find as far as its structure? Would you find a resilient, diverse and predictable system that provides confidence and creativity to your business?
If not, maybe you need to take some more time to work on that?
Related: Who’s the Defensive Captain in Your Financial Game Plan?