Financial advisors and business coaches agree that referrals represent the most effective way to grow your client base. But not every referred prospect is going to be right for your business.
It’s rare to receive the “wrong” type of referrals on a consistent basis, says Matt Anderson, founder of the Referral Authority in Chicago. But if you are receiving less-than-ideal prospects on a regular basis, chances are you are not being specific enough with your clients or centres of influence about the kind of clients you’re looking for.
So, what should you do if a “wrong” referral comes your way? Follow these tips:
> Refer them again
Have a list of professionals to recommend to prospects who don’t fit your business.
Explain to the referral what you specialize in, Anderson says, and why you don’t think it would be a good idea to work with him or her. Then give the referral the name and contact information of a professional you think would be a better fit.
> Talk with your client
Don’t leave it to the referred prospect to discuss the meeting with your client, Anderson says. Instead, be the first to reach out.
Thank the client for the referral, Anderson says. Then, explain why you had to send his or her friend to another advisor.
As well, take that time to describe your target market in greater detail.
> Consider making an exception
No matter how clearly you outline your ideal client profile, there’s always an exception to the rule.
Sometimes an advisor will keep a referral that is the “wrong” type, Anderson says, because the relationship that with the referring client is too important to his or her business.
> Speak up
Avoid awkward situations by discussing the referral with the client before setting up a meeting.
Often advisors are hesitant about clarifying who they’re looking for as a referral, Anderson says. But it’s important to be confident and to give that explanation.
For example, when a client mentions a possible referral remind him or her that you have certain criteria for new clients, such as an asset minimum, he says. Ask your client whether he or she believes the referral meets the criteria, emphasizing that you only want to avoid an awkward situation for everyone.