​How to set up a system that makes it easy for people to give you referralsArticle added by Lew Nason on September 28, 2012
Lew Nason

Lew Nason

Dallas, GA

Joined: October 13, 2006

My Company

Insurance Pro Shop

Your long-term success in the insurance and financial services industry is dependent on your ability to get referrals. Your goal should be to have every one of your clients feel so comfortable with you that they will gladly give you the names and telephone numbers of all their friends, family and acquaintances.

Would you like to have your clients, friends and family tell all of their co-workers, friends, family and everyone else they know about you? Then let's start with some basic truths. The reason most agents and advisors have trouble getting referrals is that people don't generally talk about salespeople. What is there to talk about, except maybe negatives? However, they do talk about people who have made a real, positive difference in their lives.

They tell people about the accountant who saved them thousands of dollars on income taxes. They talk about the doctor who helped them to finally quit smoking, or the attorney who helped them avoid a costly lawsuit. They talk about people who have actually helped them solve a problem. They talk about the people who have gone beyond what was expected. They talk about people they like, trust and respect. So if you want people to talk about you, and tell all of their co-workers, friends, family and everyone else they know about you, then make yourself referable.

Making yourself referable means creating value from the customer's perspective. It sounds obvious, but your products and services have value directly in proportion to how well the customer perceives that your product/service solves a serious problem they have, or creates an opportunity for them. For example, does it allow them to have more income to do the things they want to do in retirement, or does it help the client enhance their eligibility for college financial aid because of some special feature?

You can't create your value proposition and sell value unless you identify critical information from the customer. The best way to create value is to help the prospect identify a problem or opportunity for themselves by asking questions during a thorough fact-find. Remember, "good enough" never is. Even excellent service is probably not enough to get people to talk about you, or to attract the clients you really want. Only extraordinary service will draw the world to you. For example:
  • Give away valuable extras: free reports, newsletters and seminars.
  • Teach a course and offer free educational workshops.
  • Help clients and prospects identify and solve their main problems, not just the problems you can make money on.
  • Provide service before your clients ask.
  • Conduct regular annual reviews, client workshops, client surveys and client appreciation events. Don’t wait for your clients to call you with their questions or a problem.
  • Learn from every mistake. Your customers, especially the unhappy ones, are your best Research & Development team! Call them, ask questions and learn from them.
This extreme service attitude will draw the world to your door.

How to generate a consistent flow of referrals

Your long-term success in the insurance and financial services industry is dependent on your ability to get referrals. Your goal should be to have every one of your clients feel so comfortable with you that they will gladly give you the names and telephone numbers of all their friends, family and acquaintances. Better yet, you'd like them to call these people for you, which is known as "referred leads;" this type of referral makes it even easier for you to approach them.
Here are a few things to keep in mind when approaching your clients for referrals. Let them know that all you need is a few minutes of their time. Ask your clients, and others that you have worked with, how they feel about the way you have conducted yourself. Ask for suggestions that might help you to do a better job, and then thank them. Let them know that you will take their comments very seriously. Have the company or products you represent been all that they expected? Satisfied clients will be easier to get referrals from.

You must have a well prepared plan. A series of questions that will lead to the right information and keep you from straying is very important. For example:
  • What would you suggest I do to improve the way I've done business with you?
  • Did I present myself clearly, or did I confuse you in any way?
  • How do you feel about the work we've done together?
  • Was the service prompt and efficient?
  • Do you feel that what I have done will greatly improve and benefit you and your loved ones over the years?
  • I thank you for your honesty. Do you have in mind others who I might be able to help in a similar way?
  • Before we talk about specific individuals, let me describe the type of person to whom I am typically able to be of most service, and might be willing to meet with me based on your recommendation.
Approach the referrals, immediately mentioning who referred them, and have what you are going to say memorized. When approaching referrals, perhaps the simplest way is to call them on the phone, using a phone script. However, it is best to use a pre-approach letter with telephone calling. Remember to thank the person giving you the referral and keep them informed with what is happening with their referral.
Asking for referrals using letters

A good letter can be an effective way to ask for referrals. Here's one for an advisor:
    Dear Bill,
    I am writing to ask for your help. As I’m sure you’re aware, for the past few years we’ve seen a lot of turmoil in the stock market and extremely low interest rates. A number of my clients have recently expressed gratitude for my insistence that they reposition their money into conservative, tax deferred investments that have performed very well in comparison to the carnage suffered by others in the past few years.

    In the coming year, I hope to add new clients who share my prudent philosophy and who have either tried (and failed) to manage their own portfolios or are dissatisfied with the advice and results that they’ve received from their current investment advisors, which brings me to my request. If you are happy with the job that I’ve done for you, may I ask you to consider introducing me to those of your friends who are unhappy with their investment portfolio results?

    The last thing I want is for you or your friends to feel pressure or discomfort. Therefore, I have three suggestions: First, if you’ve talked to someone whom you feel I should contact, please tell me and I’ll gladly get in touch with them. Second, I have taken the liberty of attaching a few of my business cards. Should the opportunity present itself, I’d be most grateful if you’d give them to friends or colleagues who might be interested in a complimentary second opinion on their situation.Third, I would be delighted to add people you know to the mailing list for my monthly newsletter, so they can get to know me and the type of work I do. Please fax or mail back the attached page with their information.Thank you in advance for putting me in touch with people whom I can help in the same fashion in which I’ve helped you. In the meantime, if you have any questions about your own situation, as always, please don’t hesitate to call me.
    Thank you,
    Lew Nason, RFC, LUTCF
    The Family Financial Advisor
    'Helping Families To Live Debt Free And Truly Wealthy'
Remember, sending any letter is never a substitute for talking to clients about referrals face to face. Also, have low expectations for any mass request, especially in the short term. That said, periodically planting the referral seed in your clients' minds can only help, provided that it is, indeed, periodic and the way you ask doesn't undermine your position as a professional.
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