Bernie Madoff had written on his business card “Appointment by Referral Only” and I’ve known many Independent Financial Advisers to have this embossed in gold on theirs. Now I’m not condoning Bernie of course, he’s a crook, but the impact of exclusively building your business from referrals and introductions from clients is nirvana for how to remove chats from teams professional advisers.
I love referrals in my business, which is professional advising like yours. It ticks all the boxes. A 90% closing ratio, they follow your recommendation without hesitation, a very low cost of sale enabling superior client service, removes risk from the client’s perspective, little or no competition and you’re able to reciprocate to your clients in the form of recommendations for their business.
Who Wouldn’t Want Referrals?
Far too many of us operate the “Pray and Wait” methodology. I’ve met many an IFA who has been in business for over 25 years and received organic referrals on a regular basis. And why wouldn’t they? 25 years of servicing clients and you’ll be blessed with organic referrals, in other words, clients in their own initiative, make referrals. It’s not a managed service.
If you’re looking to expand your business and increase your client bank or you’re new to an area or business, then adopting referral management system is a must.
Like all business model changes, you have to believe in it. I’ve trained hundreds of professional services people, who agree wholeheartedly in the concept of referrals, but when it comes to asking clients, they shy away. “Too pushy, too sales’ey, it feels awkward, they’ll refer if they want to” are just some responses.
Let’s eradicate this Inner Game thinking first.
Belief Systems for Referrals
Do you have an abundance mind-set, a belief in feast? This is where you believe wholeheartedly in what you do and the immense value it brings to clients. You offer a superior service, you do a great job and you truly are an expert in your field. This self-confidence comes with time, don’t wait to receive validation from external sources or feedback… you are valid.
The acid test is this. If you were in the market for the professional service that you provide, you would buy from you wouldn’t you?
My research and work in professional services fires up the following beliefs that support an abundance mind-set:
- I’m responsible for the outcomes of my role
- I’m good at solving client problems and issues
- I feel good about myself and my abilities
- I have rugged self esteem
- I’m an expert in my niche
- I’m clear of the value that I bring to the table
- I want to build my client’s businesses and be regarded as a trusted partner
- I’m here to build long-term relationships with clients
- I know I can add value to clients
- I know what I want
- Even if I don’t make any sales, I’ll feel good about my performance.
- Change is good
- I compare very favourably with other professional services people
- I am confident in what I do
- I believe in the bigger picture rather than the detail
- Stepping outside my comfort zone is scary but vital for my self-development
- I am capable of keeping abreast of all industry problems and challenges
- I believe in sometimes asking really tough questions and enjoying the silence
- Everything I do adds value to clients
- I wholeheartedly believe that to grow my business I can achieve this exclusively with a proactive referral management system.
The last belief is the cornerstone to being successful with referrals. If you feel you want and need to adopt this belief and own it, then here’s a little bit of Neuro Linguistic Programming (NLP) to help. It’s about questioning away the belief first.
Write down below your current belief around adopting and succeeding in a proactive referral system. Go on and be honest.
Now ask yourself these questions or better still, get a colleague to do so. Verbalise the answers, don’t dwell on them too long; answer all the questions within 5 or so minutes. Be honest with the answers.
- What is your limiting belief?
- Does this belief help me?
- What examples can you think of when your limiting belief was not true or didn’t apply?
- How is this belief ridiculous or absurd?
- What caused you to have this belief in the first place?
- What’s the consequence of having this belief?
- If you keep this belief, what will it cost you in the future?
- For whom is this belief not true?
- Do top performing professional advisers have this belief?
- How would you know if this belief were false?
- What was the original purpose for having this belief?
- What do you want to believe in instead?
- What would be the advantage to you of having this new belief?
Now we have the right mind-set, we need the appropriate context for setting up a referral management system. Professional advisers who have this nailed regard clients as partners. I like that – it’s equal and smells of reciprocity – if they help you, you can help them with referrals. After all you are partners now. It’s a nice touch, when at the end of the first dealings with your client, you begin to refer them as a partner.
The Context for a Referral Management System
To conquer the “needy” mind-set, advisers set a context of scarcity. They’re not desperate for new business, they are proactively expanding their client bank but only allowing one or two more clients in.
I admire the scarcity mentality which increases desire – Cialdini’s influencing strategies – a classic. Expanding the business entails heavy marketing spend and time which takes them away from servicing clients.
Referrals are a very low almost nil cost of sale, and reward the client by knowing that the people they refer can have access to you. Access which they’ve enjoyed and had tremendous value from. It’s this context setting that happens early on. It’s logical, compelling and ultimately successful.
Referral Management Aphorisms
- Clients should know how they benefit from being a partner and helping each other with referrals.
- Clients should be crystal clear of the type of clients you help best. Does anyone know anyone called “anybody” so why ask them for anybody.
- Clients should be aware of all the value you provide, not just the segment of your expertise that they’ve benefitted from.
- Clients should know exactly what you’ll do when they lay on a referral. Use the “non-sales just and exploratory approach”. They don’t want you to steam in a force sale their referral. This is one of the greatest hurdles in the client’s mind to prevent them offering a name. “I’ll fix up an exploratory meeting on my dollar, no pressure, see if there’s some synergy and I’ll feedback to you. They’ll be in good hands”
- Be pure in your intentions.
Referral Management System
There’s a small river which blocks my way to my local pub, the Red Lion, called the River Chelt. When the water levels are low, there’s one place you can cross. It comprises 3 stepping stones and ensures a dry crossing every time. If you try and jump the river, you’re virtually guaranteed to get an early bath.