Why can't most advisors get referrals?Article added by Russ Wagner on October 24, 2012
rwagner20

Russ Wagner

West Des Moines, IA

Joined: January 19, 2009

Building client relationships has become inherently more difficult over the years due to changes in how and to whom we can market. Obviously, referrals are by far the best means of cultivating new clients, yet most advisors do a poor job of getting referrals. Why?

First and foremost, our business consists of building client relationships. Marketing is simply a means of meeting more people so we can build more relationships.

This process has become inherently more difficult over the years due to changes in how and to whom we can market. Obviously, referrals are by far the best means of cultivating new clients, yet most advisors do a poor job of getting referrals. Why?
    1. The way we were originally taught to get referrals doesn't work today

    2. Advisor/client contact is minimal; therefore, the advisor doesn't consider the relationship strong enough to ask for a referral

    3. It’s intimidating because you do not have an effective process. Why continue to do something that hasn't reaped rewards?

    4. The relationship provided by the advisor doesn't constitute enough value on behalf of the client to give a referral

    5. A referral strategy has not become an integral part of the advisor’s business platform

    6. The wrong clients are asked for referrals
So, what can you do to make this process work for you?

First, begin by separating your A-B-C clients. These clients are:

A. A client you genuinely like to work with, a client from whom you have made what you consider to be your average commission or fee and a client who is an advocate for you (currently sends you business)

B. A client you genuinely like to work with, could make your average commission or fee from and who would willingly be an advocate if you coached them properly

C. Clients you don’t particularly care for, you’ll never make your average commission or fee from and who will likely refer people just like them

Second, find a process you are comfortable with and begin using it with your “A” clients. Practice on your wife, kids or dog if you have to until you become acquainted with the flow of the process. There are effective techniques that are not intrusive, build credibility, get results and are easy to implement. The bottom line is 85 percent of your new business should come from the relationships you already have.

Third, get information on the circle of friends approaches. These low cost/high touch events produce significant results. Begin by implementing a plan to host two events in the next 45 days with three or four couples from your “A” list.

Fourth, if your budget allows, get a professional coach.

Finally, marketing is easy if the process you use is effective and becomes a part of how you do business. If you have solid relationships, you will get solid referrals. You can do this! You and your family deserve it.
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