If you want to build a profitable and streamlined business of top-notch clients, you must be highly referable. Notice I didn't say that you must be good at asking for referrals. There's a big distinction between being good at asking for referrals and being highly referable.
A broker once told me that she had the referral thing down pat. "I beat my clients up until they give me names," she said, and she was only partly kidding. One can only imagine how her clients felt during these uncomfortable encounters.
This is the old way of thinking–tricking, fooling, persuading, or beating clients over the head in order to get referrals from them. But rather than pumping them for information, a much better strategy is to become the type of advisor that clients want to introduce their friends to. They will only recommend you to their friends if they believe you'll take great care of their friends and put their friends' interests before your own. They'll introduce their friends to you if they believe it will help their friends–not because they believe it will help you.
Gandhi said, "You must become the change you want to see." In today's competitive marketplace, simply asking for referrals is not enough. You must become such a valuable resource to your clients that they give you unsolicited referrals.
Let's take a look at what it takes to become highly referable. Here's a four-step process to help you become the type of advisor that your ideal clients feel compelled to recommend to their friends.
Get Centered
I've never spoken to an advisor who didn't think he was client-centered. However, the only way you can tell whether someone really is client-centered is by discovering where they focus most of their mental energy. Do you spend most of your time focusing on picking the best products, strategies, asset allocations, and managers? Do you focus on the product and the process? Or do you focus on the people and the emotional payoffs they want from their wealth?
If you care about the people, you'll focus more of your mental efforts on them and the payoffs they want from your services. If you are client-centered, you will focus on managing your clients' behavior, their expectations, and their experience with your company. If you're product-centered, you'll focus on how much you sold this week.
Product-centered salespeople ask, "How can I sell these products?" Client-centered advisors ask, "How can I help these people?" Client-centered advisors respond to both the financial needs and the emotional needs of their clients. They must exceed expectations in both areas in order to turn their best clients into raving fans.
Pick a Niche
A number of years ago, a financial advisor in Southern California told me a story about a dentist she was working with. The dentist fired her accounting firm and moved her business to an accounting firm that specialized in working with dentists. I was so intrigued by this that I then interviewed the head of marketing for the accounting firm to find out what their secret was.
I found out that in a county of 1,900 dentists, they counted 1,600 of them among their clients. By focusing on a niche, they were able to provide customized, useful services that would help their clients in a meaningful way. They published a newsletter on practice management; they held two conferences a year on improving one's business. They had over 60 different consultants available to help their dentists solve any problem that might come up.
The accounting firm had trained all the dentists' bookkeepers to use the same accounting software. This meant the accounting firm could streamline the most labor-intensive aspect of their business–data gathering and entry. By focusing on a niche, not only were they were able to dramatically increase their value to clients, they streamlined their own work for themselves.
Advisors who specialize in specific niche markets will find tremendous opportunity to build highly profitable and efficient businesses. What's more, they will be highly referable to ideal prospects in that niche.
Offer the Best
I clearly remember the first time I ever had a financial sales professional tell me that he had "burned his book." I had this vivid mental image of a book in his hands bursting into flames, but what he meant, of course, was that he had sold a whole bunch of people a "hot" investment that had crashed and burned.
Many salespeople spend all their time looking fo
