8 ways to generate more referrals

By Robert Sofia

Platinum Advisor Strategies


Despite what some people may tell you, simply asking for referrals isn’t enough. Here are eight proven ways to fill your prospect pipeline.

Have you ever wondered how some financial advisors manage to get all their business from referrals? Despite what some people may tell you, simply asking for referrals isn’t enough. Here are eight proven ways to fill your prospect pipeline.

1. Surprise and delight your clients.

People love telling stories. While your clients probably won’t be in a hurry to talk about the annual review you had with them, they will brag about how you threw them a surprise wedding anniversary party. Is their car dirty when they come in for an appointment? Have it washed. Are they laid up with a broken leg? Send dinner over. New grandchild? Give them a "World’s Greatest" hat or sweater. Find ways to make your clients gasp with delight, and you’ll make a deep impression they’ll be compelled to talk about.

2. Request direct introductions.

If your client has a contact you would like to meet, ask for a direct introduction. Doing so can be as easy as saying: “I know you’re friends with so-and-so, and I’d really like to meet her. What are the chances the three of us could grab lunch together? Is that something you could set up?” As a side point, this is one area where social media can be very useful. Don’t be afraid to browse through your clients’ LinkedIn or Facebook contacts to find people you’d like to meet.

3. Host intimate social events.

Intimate social events present the perfect opportunity to meet new prospects without spending a lot of time or money. Simply plan an activity you enjoy and invite a few clients along. You could go fishing, golfing or skeet shooting. You could host a cooking class, a pedicure party or a wine tasting. All you have to do is plan the event and pick up the phone. Call a top client and say something like: “I’m playing golf at my country club this Friday and I wondered if you’d like to join me? … Great! Why don’t we make it a foursome? You bring a couple friends, and I’ll pick up the tab.”

4. Give away prizes.

When I first came across this idea, I thought it was too gimmicky for a serious financial professional, but I’ve been proven wrong by hundreds of world-class advisors who are doing this with success. The next time you hold an event, put a blurb on the invitation that says something like: “Every client who brings a new referral to this event will receive a _____.” I’ve seen advisors give away bottles of wine, barbeque grill sets, gift certificates and a ton of other prizes. Everyone likes free stuff, and at the end of the day, your clients know you are running a business so they’re unlikely to be offended.
5. Forge professional alliances.

I know this is easier said than done, but I’ve worked with many advisors who are doing this successfully, and they all tell me the same thing: Be patient. Attorneys and CPAs are generally averse to referral agreements for a number of reasons, not to mention your competitors are probably already knocking on their door. So take things slow. Get to know them personally first. Invite them to your office so they can see the quality of your operation. Send them a few referrals. Help them work on a few cases gratis. Gradually, as the relationship warms up, you’ll have a foundation on which to ask for something more formal.

6. Invest in your Web presence.

Imagine what a catastrophe it would be if one of your clients told a friend about your services, but when that friend searched for you online, they couldn’t find you. Or worse, what if they found an outdated website that disappointed them? Or worse yet, what if they found your competition? If you want more referrals, you need to make it easy for people to find you online, and you need to make sure they’ll like what they see when they do. Having an outdated website is a big mistake in today’s competitive financial industry. Spend the money to enhance your online presence and begin using social media.

7. Talk about (don’t ask for) referrals at every meeting.

Each time you sit with a client for a review, you should be talking about referrals. Of course there’s a right and a wrong way to do this, and you never want to come across as needy, so don’t ask for referrals directly. Flip the conversation around by telling them you’re willing to accept their referrals. This method works because it positions you as a generous professional rather than a needy salesperson.

Here’s what you might say: “As you know, I’m very selective about the clients I take on because my first priority is to my existing clients. That being said, I want you to know that we have a special program for people referred by our clients. If you know someone who could benefit from our services, we’ll provide them with a portfolio analysis — kind of like a second opinion from a doctor — at no cost. So if you know a friend, neighbor, business contact or family member like that, please let me know, and I’ll gladly reserve time in my schedule for them.”

8. Reward referral behavior.

Every referral — regardless of the quality — needs to be celebrated. At the very least, send a handwritten thank you note to the referrer. If the person they referred becomes a client, take an additional step by sending a thoughtful gift. Always follow up with the referrer to let them know whether you were able to help the person they referred. Have a special dinner with your top clients each year, and acknowledge each person who sent you a referral. The more you reinforce and reward referral behavior from your clients, the more referrals you’ll receive.

The bottom line is that if you want to build a referral-based practice, you can’t rely on a single source for referrals. Strategic planning and effort are required. As legendary football coach Vince Lombardi put it: “The only place success comes before work is in the dictionary.” So as long as you’re willing to put in the work, a thriving referral-based practice may be right around the corner for you.