Most producers get referrals by asking their clients for the names of any acquaintances who may need their services. But when you get referrals this way, you call the acquaintance and:
• They don’t know who you are.
• They don’t know what you do.
• They don’t know why you’re calling.
• They don’t know how you got their names.
The do-not-call rules make it that much tougher for you to build his practice from referrals that come to you in this manner.
Trust is everything in this business, and securing prospects’ trust before you meet increases your chances of opening a new account. The way most financial advisors or insurance agents get referrals, however, does not result in high trust. If you want to increase the success rate of your referral marketing, change the way you get referrals.
In addition, if you want more than the sporadic high quality referral from your referral program, you must develop a referral system, which becomes automatic in you practice, that will generate a continuous flow of good prospects.
Defining a good referral
To start with, determine the type of prospects to whom you want to be referred. All insurance referrals or investment referrals are not created equal, and when developing a referral system, concentrate your efforts on seeking prospects that best suit your practice. For example, if you want more seniors as clients, then the way you cultivate a senior referral will be different than cultivating a referral to the baby boomer children of your clients.
Look at your current clientele and identify the 20% that provide 80% of your income. What characteristics do these clients share? Wouldn’t the best prospects be similar? Odds are excellent that these people have friends who share similar needs and circumstances.
Define this target market and then focus your referral efforts on those prospects most likely to fit your target profile.
Gaining Personal Referrals
Build the referral system by setting up business development meetings with your targeted clients. These meetings are not sales meetings, but rather their purpose is to grow your business. In addition, these meetings are meant to do far more than deliver a list of names and addresses from your clients; if done correctly, clients will introduce you to their friends.
Referring to the list created above of targeted clients, contact some of your best clients and invite them to a business development meeting. Explain to the clients that this is an integral part of your business and because of your relationship, ask if they would take a little bit of time to meet with you and help you build your business. Offer to buy lunch.
Ask these clients to bring their address book. This is a good place to begin to target possible prospects. For example, if the client is a senior executive with his firm, you will ask to be introduced to his colleagues. If the client balks at this and says he is not sure his friends “need help,” the tell him that it’s OK. The client does not need to determine which of his friends need help. The friends will decide for themselves.
Design your referral marketing presentation to inform your clients why you do this, and how it works. This presentation should detail how you will deal with the referrals. It must address the fears clients may have about sharing other people’s names and personal information. You can best can allay their fears if you explain exactly how you will use the information.
You will achieve more success from these referrals if the client introduces you to the referral. If you merely gets a referral name and telephone number from a client, that’s almost worthless. When you call the referral without an introduction, don’t expect much because you will have the problems I mentioned above.
If you follow the process I describe below, the referral will be expecting your call and will know you well.
Step 1: The personal introduction. Prepare an endorsement letter about yourself, which the client will send to the referral. This letter basically says, “I’m working with Bob, and he’s done a great job for me. I think it would be worth your while to meet with him.” The producer can add some specific information aimed at the services he provides, such as, “He has helped me organize my finances,” if he believes these might be of interest to the prospect.
This next step is important: At the bottom of the letter, add a sentence, “If you don’t want me to give your name to Bob, let me know.” This gives the prospective referred party the opportunity to opt out. You don’t want to waste his time on people who aren’t interested in what you offer. It also reassures the client who gave the producer the referral’s name to know that the producer isn’t jeopardizing the client’s relationship to the prospect.
Prepare these letters before the business development meeting so that the client can sign them at your lunch meeting. When you mail these referrals, include your brochure or some information on your practice.
With the client’s permission, print envelopes for the letters, adding the client’s return address. When the note arrives at the referral’s home, it appears to have been sent from the client’s home or office.
Step 2: Drip marketing. Now that you have been introduced in writing, build the prospect’s trust to improve the odds that you will get the prospect’s business. Make two additional mail contacts before attempting to call for an appointment.
A few weeks after the initial introduction, follow up with another passive form of contact. Send a copy of your financial advisor newsletter or a booklet the prospect might find useful. You might attach a personal note or Post-It.
The third contact should be a personal letter from you. This is where you introduce yourself, and describe what you do. This letter should mention, “I got your name from so-and-so. If you have any questions about me, feel free to call so-and-so before I call you next week.”
Step 3: The telephone call. Follow up with a telephone call, as promised. This call a week later is to set an appointment.
Yes, it really can be this simple to get referrals that you convert into clients. The secret to this referral program is to use a systematic approach to get referrals and convert referrals into clients.
