Many advisors are afraid to ask for referrals, even though they know popping the question is a useful prospecting tool, say practice-management experts.
Some advisors believe, incorrectly, that asking for referrals is unprofessional and could hurt their relationships with clients, says Juli Leith, a coach with the Personal Coach in Waterloo, Ont.
However, if you create a routine for asking for referrals as a part of your consistent, quality service, it will become an easy and natural part of your business.
By eliminating these common referral mistakes, you should soon be you getting more introductions to your clients’ family members, friends and colleagues:
1. Not asking
The biggest and most common mistake advisors make is not asking for referrals — ever.
Most advisors don’t have a “referral mindset” and often forget to use it as a prospecting tool, says Leith.
Even if you are nervous or are still working on your referral strategy, a “bad ask” is better than not asking at all, says Ray Gauthier, director of marketing with TactiBrand, an Oshawa, Ont.-based firm that specializes in marketing services for financial advisors.
2. Not making clients aware of referrals
Many clients don’t provide referrals because they have no idea advisors are even looking for referrals.
Clients assume you are too busy or already have enough business, says Leith. Clear up any misunderstandings by discussing the possibility of referrals with clients you know are satisfied with your services.
3. Talking about products — instead of people
Taking the wrong approach to an introductory meeting can lead to a loss of business current clients and referrals.
Clients are often hesitant to give referrals because they believe it will result in a sales pitch, says Leith. That is a reasonable fear, because many advisors are often taught to start selling to clients immediately during the first meeting.
To keep both the client and prospective client happy and free of pressure, use the first meeting as an introduction only, says Leith. Leave it to the prospective client to decide whether they want to discuss products or strategies in more depth during that meeting.
Focusing the conversation on introductions will make clients and prospects more comfortable and lead to more business and referrals in future.
4. Never saying “no”
Sometimes advisors make the mistake of accepting every referral that comes their way. That can be a mistake, too. Instead it’s best let go of clients who are not the best fit for your business, says Sandra Foster, president of Headspring Consulting Inc. in Toronto.
Keeping a client with whom you don’t enjoy working can create inefficiencies and reduced morale that can harm your business. Whether you identify a bad fit at the preliminary meeting or after a year of working together, be prepared to suggest the client try another advisor.
IE