Over 160 of our target clients have engaged us in the last two years! Whoo-hoo!
Proud as I am of this number, I am more proud of our referral percentages. Between 40% and 50% of our new business in our Rhode Island office is coming from referrals. Better than that, since May 100% of new business in our Minnesota office has come from clients who love us and trust us enough to refer us to their colleagues and friends.
I get calls every week from advisors who want to increase their client base. One of the first places they should look is their existing client base for referrals. Our system of getting referrals from our existing clients is counterintuitive. We don't ask for referrals at all. We just provide awesome service—it has worked great for us.
Considering why our referability quotient is so high, we divide these factors into two categories: things that we do that are obvious to the client and things that are not so obvious, because they are taking place behind the scenes. If you address each and every one of these, your referability quotient will go up, too.
Obvious Things
Let's start with a list of five visible things we do to increase our referability quotient, before moving on to ones that are not so obvious to the client.
1. Make things easy. We make things very easy for our clients. We do everything we can to save them time and effort.
Take this case: We just picked up a lovely professional couple, who were concerned about working with me because her father is a long-time advisor with another firm. Granted he doesn't specialize in our market, but he is family.
I didn't denigrate his investment recommendations; in fact, I suggested they leave the old ones with dad and we just work with new money going forward. It turns out dad had made one recommendation that was similar to ours: take your old 403(b) money and roll it over into an IRA.
Here is where you could see the difference between our two firms. Dad tells son-in-law what to do. Son is busy, overwhelmed and confused. He never makes the transfer.
Our approach: We set up a time to do a conference call with the old firm, get that help desk on the line, then do a three-way call with our client, who gives the old firm permission to talk to us and leaves the call. We finish up the call and make sure the funds are transferred over. Net time for our client: about two minutes.
By the way, this worked so well, I think he is going to transfer all his assets to us.
2. Go above and beyond. We develop a deep relationship with our clients. Take these experiences I had over a recent weekend: Two clients sent me email photos of their newborn babies, and one client, who is interviewing for a new job, wanted wardrobe advice! Yes, this does go above and beyond financial advice, but I am more than happy to help. If she gets this new job, her income will go up about $100,000 per year and her chances for a successful retirement will be increased. Plus, I get the satisfaction of knowing I have helped change her life.
We have another client who has trouble finding a babysitter. For the first year I only met in their home at 8 p.m., after the children went to bed. Boy was I tired—but another happy client. Today they come to my office, with the kids in tow. I pull out snacks for the kids and let them play with the markers on my white board.
They referred me to one of their best friends, who also became a favorite client.
3. Be selective. Our clients like that we work with others similar to them. They like that we are very selective about our client base.
When we started in Rhode Island, we only worked with professors at Brown University. I didn't realize how important it was to have your clients all working out of the same building until later in the year. One of our favorite clients was approached by a neighbor, who wanted a recommendation for a financial planner. Our client told him how pleased he was with us, but refused to give him our name. His comment: "She won't work with people like you!" I laughed over this story, but I realized our clients liked being part of an elite group. Our beloved client since referred me to many of his partners—because they are part of the "elite" group.
4. Be one of them. My background fits my clients' background. One of the reasons our clients enjoy working with us is that they know I am "one of them." With a few exceptions, our clients don't come from a wealthy background. They made their money just the way I made mine: I got a great education, including a doctorate degree, and then worked really hard to get where I am. Since all of our clients have doctorate degrees, too, this really resonates with them. They appreciate my education, the books I have written and the honors I have received. It means something to them.
5. Over-prepare for meetings. I have a great team who make sure I have every possible document I might need when I am traveling away from our home office. If a client asks about our investment philosophy, I have a presentation pre-prepared along with the paperwork pre-filled if they want to move ahead and transfer their assets.
If clients have an interest in tax-free distribution strategies, I will have a sample illustration from a life insurance contract that shows how it might work for them, along with an application to our top company. Once again, this saves me and the client time. I don't have to schedule another meeting to go over the paperwork—we have it all right at our fingertips.
