A research note on ‘Referral-Generating Techniques of Top Financial Advisors’ published by US based AIG Advisor Group gives interesting insights on how advisors can improve the quality of referrals.
Many financial advisors believe that the more referrals they get, the more successful they will be with referral marketing.
Referral success is driven by quality far more than quantity. It may help to understand that there are three ways to evaluate referral quality:
1. The quality of people to whom you are referred.
2. The quality of the referral message in influencing the prospect.
3. The quality of your first meeting(s) with the referred prospect.
For example, suppose a client calls you and say: “We had a cookout with our neighbors last week. You don’t know them. But when they asked whom we use for financial advice, I gave them your name. They may call you to discuss a situation they are facing.”
What is the first thing you should say in response? Of course, the answer is: “I greatly appreciate it. It means a lot to me.”
But then what? If you had three questions to ask the referral source, what would they be? Many advisors would like to know: 1) how much money the prospects earn; 2) the approximate value of assets they own; and 3) what financial products or services they need.
These are nice to know, but they aren’t easy to find out. In any case, they aren’t the most important things to ask referrers for purposes of evaluating the quality of referrals.
If you’ve paid close attention, you know what those questions are. They are among the most natural follow-up questions you can ask, very low in pressure:
1. How well do you (the referrer) know them?
2. Whom do they know? Are they well connected? To whom or what (mutual friends, center of influence, networks)?
3. Are they well respected and influential in any network? (Are they COIs?)
Notice that these questions don’t sound nosy or pry into what type of “situation” the neighbors may be facing. If you are carefully targeting the prospects you want to reach, your first assumption about any unknown referral should be that this entity is more likely to help connect you to a target prospect than to be a target prospects.
It generally works well to begin qualifying any referral by focusing on social relationships and connections between people. It’s a great way to acknowledge that the referral is important without getting into complex details or confidential personal information. After all, our social relationships and connections are pretty public!
How to increase referral quality
In the “perfect referral,” the referrer introduces you to a room full of target prospects and has great influence with each one. For each prospect, the referrer provides a powerful testimonial stating that you are the greatest financial advisor on earth.
Of course, this usually isn’t reality. But what can you do to increase the quality of referrals?
Clearly, a low-quality referral is one in which the referrer says: “I know Joe (the referred person) a little and he might talk to you. But if you call him, don’t use my name.” It’s better to be given permission to mention the referrer’s name. It’s better yet if the referrer will call, write or e-mail to introduce you. But how can you make this happen?
Ask the referrer two questions:
> How do you and the person you are referring normally communicate? (In person at work, in person outside work, by e-mail, by letter or phone.)
> When do you expect to communicate with this person again?
Referrers often will see where you are going and volunteer to help you make the connection. If not, explain: “The reason I ask is that I would greatly appreciate it if you could introduce me in your own way and words. Nothing I could say about myself would mean as much as what you say from experience and your heart.”
The best introduction a client can give about a financial advisor usually doesn’t focus on technical skills or product knowledge. It focuses on human qualities like honesty, integrity, caring, listening and communicating. No business card or marketing brochure can be more powerful in this regard than a simple letter, verbal message or e-mail from the referrer, explaining why a relationship with you has been rewarding.
It is the client’s words to the referral that matter most, and you will earn these words with superior client service, high levels of satisfaction, and the appreciation shown for each referral. You can’t greatly influence these words “in the moment” and shouldn’t try.
Advisor Group is one of the largest independent broker-dealer networks and a division of AIG Financial Distributors.
