Thomas Fross of Platinum Advisor Strategies said, “If you want to make a client uncomfortable, you should ask them for a referral,” Thursday at the Platinum Top Producers Boot Camp.
Ron Carson, the Prosperous Advisor, disagreed and offered this rebuttal.
Super Bowl Sunday always reminds me of one of my favorite quotes from football legend Vince Lombardi:
“Some people try to find things in this game that don’t exist but football is only two things – blocking and tackling.”
Contrary to what many believe in our industry, and to a recent article that suggests otherwise, asking for referrals works. In fact, this is exactly what we practice at Carson Wealth Management Group and Peak Advisor Alliance. I built Carson Wealth Management Group with this principle, and much of our success is simply because we do a lot of blocking and tackling - and we execute the little things well. Not seeking and asking for referrals is completely contradictory to anything I’ve ever experienced in building my own million-dollar business.
Getting warm introductions - referrals from clients - is analogous to executing a great recipe. You must do several things well for the recipe to produce the best outcome. Mr. Fross is correct in that the main ingredient, and the first step of the referral recipe, is to deliver a great client experience. Without this, your ability to generate new business through referrals is limited. But thinking referrals will just magically appear when you provide great value is like thinking you can make chocolate chip cookies without chocolate chips. It’s like seeing the flour, the substance, as enough. Advisors who subscribe to this belief are often not rewarded for delivering exceptional value to their clients. They are in position, but they miss the block or tackle.
Much of my thinking is grounded in research done by Dr. Robert Cialdini. We encourage our Peak Advisor Alliance members to read his books on professional persuasion and ethical influence. His research suggests that a successful relationship involves reacting to certain client cues with a request for something in return, like a referral. Other research, like that from Julie Littlechild, the former CEO of Client Audit, helps us understand the necessary ingredients in the referral recipe. Clients are motivated to share referrals with you for two primary reasons:
- They want to help someone else
Now to the recipe:
Start with offering exceptional value to your clients. The ability to replicate your best clients is directly related to the client experience you are delivering. To have a sustainable business you must offer value, and this value becomes a requirement in order to grow your business by referrals.
Educate your clients on several items:
- They need to understand and appreciate your value. This is why you share your mission statement and value proposition with both prospects and clients. They need to understand why they like you so much.
- You want to grow. It is imperative that clients know you will be selective with your growth, and that you will maintain capacity for them. This is why successful advisors use the phrase, “For the benefits of our existing clients we only accept a limited number of new clients each year.”
- The type of new clients you want. Your clients must understand the type of people you want them to introduce to you.
From day one your clients need to know you expect referrals from them, and this expectation is beneficial to both you and your client. Explain to them that many advisors spend the majority of their time chasing new prospects and not servicing existing clients, and that your approach is different. Clarify that you spend most of your time servicing clients and, therefore, need your clients to introduce people like them to you.
Make sure your clients know that you like them: It is not enough that you like your clients…they need to know you like them.
Ask at the right time: Ask when there is reciprocity on the table. Condition yourself to ask whenever a client gives you a compliment. This is a common area of execution error. Too many experts train advisors to ask at the end of every meeting or in other manners that often come across as staged and without authenticity.