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Building a Referral Network
I. What are referrals and why are they crucial?
A. Referral defined: a well-deserved professional recommendation
B. Your professional reputation is your most important business asset
C. Referral statistics
1. Every 100 very satisfied clients produce 66 referrals in one year
2. Every 100 generally satisfied clients results in 26 referrals
3. Only 15 referrals (and many more negative comments) come from every 100 dissatisfied clients
4. According to a recent survey, most affluent investors choose a financial advisor based on the referral of a friend of colleague
D. Warming up the cold call
1. The “warmth spectrum”
2. The more you know about the referral, the warmer the call
3. The better the quality of the referral, the warmer the call
II. Know Thyself and Thy Business
A. Make sure your business is worthy of being referred
B. How are you positioned in the minds of your clients?
1. What do existing clients like about your services?
2. How have they benefited from their relationship with you?
3. What value do they perceive in what you do for them?
4. What improvements have they suggested?
C. How do you tell the Advisor “story”?
1. Articulating exactly what you do for clients
2. Identifying the value delivered from the client’s perspective
D. Individual and small group exercises
1. The 30 second elevator speech
2. The 15 second self-introduction
3. Client benefit stories
III. New Business Development Strategy
A. Sources of Referrals
1. Internal sources
2. Your existing client base
3. External sources (professional business contacts, social and civic contacts, etc.)
a. Advantages/limitations of each source
b. Identifying centers of influence
c. Small group exercise: Identifying external sources of referrals
B. Helping other help you
1. Describing your ideal client profile-to help people understand who might benefit from your services (individual exercise)
2. Priming the pump with memory joggers-to help people identify specific individuals who fit your ideal client profile (small group exercise)
C. Follow a process
1. Build your reputation by providing excellent service so that you are deserving of professional recommendations
2. Create an atmosphere where referrals can occur
3. Ask for referrals when you sense a readiness to make positive professional recommendations (typical recommendation “signs”)
4. Use open rather than closed questions when asking for referrals
5. Obtain enough information from the referring individual to warm up your initial contact with the referral
6. Build/maintain a contact database
7. Thank the referring individual at the time and follow up afterward if the referral turns into a client
8. To get referrals, give referrals
D. Eliminating your personal barriers to building your business through referrals
1. Fear of jeopardizing existing relationships and future sales
2. Fear of rejection
3. Fear of seeming pushy
4. Fear of appearing unprofessional
5. Forgetting to ask
6. Lack of confidence in the value of your services
7. Projecting your own feelings of awkwardness onto the people from whom you should be seeking referrals
E. Specific techniques
1. Developing a script for requesting referrals
2. Role play exercise
F. Building a pipeline (Individual exercise)
1. Identify your best sources
2. Action planning
3. Weekly referral activities
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