What Do I Do When I Get ‘Bad’ Referrals From Great Clients?

What do I do when I get ‘Bad’ Referrals from Great Clients as a Successful Financial Advisor?!?

How you handle bad #referrals is a game changer for successful #financialadvisors.  Last week’s newsletter was about how to keep from getting too many of the wrong referrals and this week we are going to talk about what to do when you inevitably get some.

Let’s face the truth: if you are successful and deliver great customer service you are going to get ‘bad’ referrals from your clients.  Most of these will be good introductions (meaning the prospect wants to meet with you), but they won’t be ideal clients. This happens when you have a great client base that believes in you and wants to help you. 

If you don’t suck this is a problem that will only grow if you do nothing.

How you handle these introductions will determine how predictable your referral system will become and, for those of you that own your business, will go a long way to preserving enough time for you to enjoy your life as well.  I have spoken before about having a concierge mindset and this is where having that system installed and integrated throughout your entire business will not only save you a ton of time, it will enhance ideal client referral production.

Here are the steps to handling bad referrals:

1. Show honest and sincere appreciation
2. Explain what you are going to do
3. Execute 
4. Follow up and redirect

Step 1:  Show honest and sincere appreciation

The first step to handling any kind of referral is to always show appreciation and it's even more so when you get a referral you think is bad. You need to thank the person that took effort on your part even if you don’t want the referral as a client. 

Reward behavior that you want to have replicated (referring to you) and train later on how to do it better.  

I just went through a deeper dive into this with one of my Advisor clients yesterday in a coaching call and it was really cool to see him start to grasp how all of this stuff integrates effortlessly into his day.  Remember:  Execution (introducing you) always beats strategy (training before a referral).

Step 2:  Explain what you are going to do

Anytime you get a referral, as soon as possible explain (succinctly) to your client exactly what you are going to do with it (how you are going to handle it).  My recommendation is to always start with a brief phone call with any referral.  There are several reasons why this is a good idea if you think it might be a less than ideal introduction.

• You are going to minimize initial resource allocation to the introduction.  By having a short phone call to ‘interview’ the referral you can quickly figure out what they are looking for and if they are going to be an ideal client for you (you know the drill, assets, profession, complexity, etc).
• You can quickly follow up without having to try and fit them into your calendar for an in person meeting (this is why you need to always have some extra capacity in your calendar at all times if you want to be successful and happy)
• You are reassuring and confirming to your client that you appreciate them and you are training them that you are a trustworthy driver of their car.
• If the referral isn’t a good fit for your business you can easily pivot them to a better solution.

Step 3:  Execute (make the call)

You need to prioritize following up on referrals, especially the initial contact, as you are looking to reinforce the experience of referring you to your clients (this isn’t the last one you want to get from them right?!?).  Make the call and do the following within that conversation at a minimum:

• Promote and show appreciation for the client that facilitated the introduction.  “Isn’t it great that Sally introduced us?  She is such a wonderful client and is so giving.”
• Explain that you are are here to see the best way you can help them and that you need to ask some simple questions to be able to do that best.
• Do your turbo fact finder (you need to prepare one of these) and get enough information to be able to tell what they need and whether or not you can afford to provide it for them.
• If they are a good fit, in spite of what you thought earlier…you know what to do.  If not, you need to provide them with a good solution.  “After hearing you describe your current situation Mr. Smith, I think that the best thing for you to do is to keep fully contributing to your 401k.  Right now, paying extra fees for an advisor like me might not be in your best interest.  If anything changes I will be a phone call away.”  Maybe they need to save more money for a few years…

Step 4:  Follow up

This is where so many fall short and never move into the really profitable zones that only referrals can provide.  You have to follow up with your client and let them know how the referral conversation went and what the result is going to be. 

If they weren’t an ideal referral and you presented another option that wasn’t working with you right now (a) you are subtly training your client that you are always here to help and that you aren’t just a salesperson and (b) providing an opportunity for you to have another discussion with your client about specifically introducing you to other people they know that likely would be ideal clients.

Did these 4 steps make sense for you?  I really hope so because after 20+ years of working with high performers that own their own business they are time tested and highly lucrative strategies that when executed will grow profit and fun.  What are your thoughts?  Did I miss anything and/or do you have a crazy ‘bad referral’ story that you can share?

I get what it's like to be a #businessowner and a #financialadvisor at the same time.  The process can be incredibly lucrative, and often quite overwhelming.  You don’t have to make great money and be miserable inside.  The first step is to imagine something different and then find a path to that vision that you believe will work. 

Related: How To Make Sure You Don’t Get Too Many of the Wrong Referrals