When is client service great enough to ask for referrals?Article added by Katherine Vessenes on February 22, 2010
Katherine Vessenes

Katherine Vessenes

Chanhassen, MN

Joined: August 21, 2010

My Company

Vestment Advisors

Horsesmouth.com, one of the top information resources available to financial advisors, recently conducted a Referral Clinic and Blog-a-Thon in which I was asked to participate. The following question was posed to me by a Horsesmouth.com reader. What you will see is the exact answer I provided.

The question was submitted by Andrea E., an insurance rep in Utica, New York.

Question: "Everything I've read regarding harvesting referrals seems to hammer home the same message: In order to obtain referrals, you must earn the right to ask for them by providing outstanding service. How do you know when you've provided enough outstanding service?"

Answer: The basic starting point of any referral program has to be building what we call absolute advocates, those raving fans who love you so much they can't help but send you their friends and family.

Rule No. 1: Build a loyal base of advocates by providing great client service and the WOW experience. This has to be a level of service beyond what they can get elsewhere.

Rule No. 2: The time to ask for referrals is at the point of highest client satisfaction. I learned this the hard way while practicing law. The most likely point in time for me to get paid was when the client was the happiest with our outcome when we delivered the estate plan or won the case. Getting paid then was easy, but if I waited too long to send out the bill, the chances of getting paid decreased each day.

The same rationale is true of our clients and getting paid through referrals. The time to ask is after you have demonstrated great value and proven yourself. Never ask before you have delivered a plan or something of value to the client.

Rule No. 3: Pick your times carefully. Here is one example: A great time to ask for referrals is after delivering a financial plan. The script would go like this:

"Jane, now that you have seen our plan and recommendations, how are you feeling about our work so far?" This question is crucial, because no one is going to give you good referrals if they are not happy with your service. Frankly, we never know for sure if we are meeting clients' expectations unless we ask them.

Then ask this:

"Is there anything we can do to make this experience better for you?"

Once again, this is great feedback to learn if your WOW level of service is working. Assuming you don't get any negative response, you go to the next question:

"Great, I am so glad to hear that. That is what we were hoping for. Now I could use a little advice about my business, if you don't mind. I have enjoyed working with you so much, I have been thinking about focusing my practice on (pick a point of contact with them, like "other pilots like you" or "other members of the West Valley Country Club"). Does this make sense?"

See what they say to you. They might say that some other financial advisor is already working with all the local pilots. Chances are, they are going to think this is a good idea.

Then you ask: "If you were me, how would you go about it?" What you are asking for here is your marketing strategy. Most people will give you a lot of good ideas because they want to help.

Then you ask: "If you were me, who would you approach first?" This is where you get the names and other information.

Then: "How do you think I should approach them?" Most of your clients will be willing to call, send a letter or e-mail. If not you may have to prompt them.

If your clients are not willing to recommend that their friends come into the office for an initial meeting with you, let off a little of the pressure and ask if it would be a good idea to invite them to a seminar you were planning for pilots. Most people would be happy to do that because it is non- threatening. Make sure you invite your client to come to the seminar and be your master of ceremonies. This adds creditability to the entire program.

Other good times to ask for referrals:
    No. 1 -- After doing your annual client satisfaction survey. Once again, it lets you know if they are wildly happy with your service. If they are, ask them for recommendations on others who could use what you are offering.

    No. 2 -- After a client appreciation event. Call the clients and ask if they enjoyed the event. Then, go into the same questions listed above.

    No. 3 -- During the annual client review. A good way to approach this is to confirm, once again, that they are happy with your service. Then say "I want you to know, I will always make time for your friends and family who need the kind of services we provide. Can you think of anyone who could benefit from our (describe your system here)? I would like to invite them to our next workshop."

    No. 4 -- Unsolicited praise. Sometimes, clients like what you are doing do much that they start telling you how pleased they are with your services. This can be a great time to thank them and ask for recommendations.
Final thoughts Just start asking. The more you ask, the more comfortable you will feel and the more likely that you will get new recommendations. You won't get referrals from everyone, but even if you can get one in three, this could improve your revenue by 30 percent or even more. Remember the best time to ask is when the client is the happiest with your service.

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