Rid Your Clients of Common Referral Objections

Advisor Amy Berk from Denver, CO, was running into a wall with her referral efforts—actually, she was running into three: three objections she was getting from her clients when she asked them about referring.

They were:

1. "I don't talk to people about their money."
2. "I don't know anyone."
3. "I already gave you referrals."

"How do you handle those nasty objections?" Amy asked.

These objections and others like them can bring a referral conversation to a screeching halt. How do you not only address these objections, but do so in a way that makes the client genuinely want to give referrals? 

Bob David, Horsesmouth Director of Advisor Programs and leader of the Automatic Referrals Jumpstart Program, had this to say about overcoming the first of Amy's objections: "When someone says they don't talk to people about their money, it's most often because we haven't positioned the request in a client centered way, and it needs to be more focused on exactly what you can do to help the person you're asking to be introduced to." If a client sees that you can help a peer with a problem they've been struggling with, they won't have reservations about bringing your name up.

As far as addressing the "I don't know anyone" objection, Bob stresses the importance of specificity. "Clients need to understand who we can best help, why or what problems we can solve before they can go through their mental rolodex and get a picture of someone in their heads," he says. Your client probably knows plenty of people who would make for an ideal client, but they have no idea what criteria define one. It's your charge to make sure they know exactly what services you can provide so that they have a clearer picture of who could benefit from them.

When a client says, "I already gave you referrals," it's a definite sign, Bob points out, that the requests are coming at the wrong time. You need to make sure that you haven’t been over-zealous in your referral requests.

The one mistake you can make with these objections, or any objection for that matter, is to let them stop you. Any concern a client may have can be addressed and overcome.

Bridging the All-Important Referral / Client Gap

Getting referred to is a big step toward gaining a client, but the business relationship is far from cemented at this point. You've been introduced to the referral, but things can still be awkward between you. After all, you haven't worked together and probably don't know much about one another. Sometimes it can be tough to bridge the gap and make the transition between the referral and the first appointment.

Brian V., an advisor in Arcadia, CA, asked Bob David, Horsesmouth Director of Advisor Programs and creator of the Automatic Referrals Jumpstart Program, how to turn that new referral into a new client. "A lot of times I am introduced to referrals and these referrals understand what business I am in," Brian wrote. "However, the topic of their investment needs never seems to come up in our conversations no matter how many hints I drop. Once you get introduced to a referral, what is the best way to approach the referral and ask for an appointment or to take your relationship to the next level?"

To transition the nascent relationship into a business one, you need to focus on the referral's perspective, or what Bob David calls the "client centered mindset." "Focus all your attention on learning about them and being interested in their situation, their business, their hobbies, etc. Then look for an opening," says Bob.

Once you discover more about them, you can explain how you've helped those in similar situations. You may think the natural thing to talk about is investments, but as Bob points out, that's not really the case. "We tend to think the opening is always about investments," he says, "But from the client's perspective, it's more important to identify a problem that needs to be solved. For example, if you're talking to someone who owns a business, you might ask how they got started, the nature of the business, how they would describe their best customers, etc...then mention you've been able to help other business owners and ask how they feel about their current retirement plan, cash management, succession plans, etc."

It really comes down to getting into the referral's head and learning their unique perspective. Once you do that, you're in a position to address their true needs and the business side of the relationship will naturally develop.

Client Referrals: Megaphone or Muffler?

Just read a referral post on the blog of Kirsty Dunphey, an Australian entrepreneur and self-made millionaire, that really resonated.

Kirsty was referred to a particular store by two different friends. When she mentioned to the proprietors that she had been referred, they showed no interest in learning who these loyal customers were who had recommended the store to their friend. 

As Kirsty points out, had they asked and gotten this information, the owners could have sent a thank-you note to these raving fans, or called and thanked them, or even sent them a discount voucher for their next visit to the store.

"When someone refers a friend to your business," Kirsty explains, "you’ve just got yourself a walking, talking billboard going around advertising your business! What you do to thank them for doing your marketing for you can act as a megaphone or a muffler. Which would you prefer?"

Do you religiously follow up with every referral source and say thanks?  Do you send thank-you notes? Gifts?  If not, don't wait! Start now. Reward those raving fans for trumpeting you to everyone they know, and they'll trumpet even louder.

The 7 Deadly Sins That Destroy Referral Business

Are you sabotaging your own success? Horsesmouth contributor Matt Anderson, president of the Referral Authority, recently shared his list of the top seven worst mistakes advisors make around referrals.  See if any of these sound familiar.

1. Don't know who is giving them referrals. Many advisors don't know where their referral business comes from or why their top referral sources like them so much.

2. Don't know when to ask for referrals. Many FAs ask at the wrong time.

3. Have an unhealthy mindset about asking for referrals. Many avisors develop a negative attitude about referrals, or even outright fear [free registration required].

4. Don't know what drives referral conversations. There are six steps to an effective referral conversation, but many advisors do not know them or consistently follow them.

5. No niche. For FAs, there are enormous advantages to concentrating on a focused demographic. Do you know the five qualities of a good target market?  (By the way, more referrals are just one reason for having a niche!)

6. No strategic referral relationships with other professionals. Advisors must deliberately build reciprocal referral partnerships with other professionals.

7. No system in place for keeping in touch with clients year-round. People think about themselves 95% of the time; they don't sit around brainstorming ways to refer more clients to their advisor.  If you want to get referrals, you've got to stay top of mind.

Are you making any of these mistakes?  Read the entire article, "The 7 Deadly Sins That Destroy Referral Business," (free registration required) and stop missing out on all of those referrals you could be getting!

The Art of the Referral Thank-You

When you get a referral, regardless of whether you end up with a new client or not, be sure to give your client a hearty and gracious thank-you, IMMEDIATELY. A hard copy, handwritten note is an absolute must.  E-mail and telephone thanks are NOT acceptable substitutes.

The written thank-you is a dying art—so it's very much to your benefit if you're one of the few advisors who knows how to do it properly.

For the best effect, don't use your firm's letterhead.  Instead, get yourself some high-quality stationery engraved simply with your name, and enclose your business card with the note.  Crane's is one of the best sources of this type of stationery.

A thank-you note need not be long or elaborate.  A few thoughtful lines will do.  A pretty standard format is three to five lines in length.  Start off with an expression of gratitude for the referral. Then provide a bit of detail to personalize your thanks.  Mention any plans you may have to be in touch in the near future. Say thank you again, and close. It's as simple as that.

Here is a sample note thanking a client for a referral. This is provided simply to give you an idea of how the wording might go. Your own notes should be true to your own personal style and voice.

Dear Paul and Michelle,

Many thanks for introducing me to Roger and Pamela Johnson last Saturday.  I sat down with the Johnsons this morning, which only reinforced what lovely people they are (I would expect nothing less from friends of yours!) with whom it will be a great pleasure to work.

Thank you again for your kind introduction. It is clients like you that make my job such a joy.

Warmly,
John

And here is a sample note of thanks to another professional who has referred a client to you. Notice that it includes the other professional in the process by offering to share the completed financial plan... this is appropriate if the referral came from a relevant professional, such as a CPA or estate attorney.

Dear Don,

I so appreciate the confidence you have in me, and the many referrals you have sent my way. I met with the Martins this morning, and I know they are going to be fun clients. 

I will give you a call as soon as I complete their financial plan and we can review it over lunch—my treat.

Thanks again for all your support!      
      
Best regards,
Julie

Don't underestimate the power of a handwritten thank-you note.  Send them regularly and you'll set yourself apart from your competition and impress 100% of your clients and connections. 

The ABCs of Automatic Referrals: Network Mapping and the Six Degrees of Separation

Everyone has heard of the concept of Six Degrees of Separation—the idea that through our networks of acquaintances, none of us is more than 6 steps removed from everyone else on the planet.  I  saw a great TV documentary a couple of years ago called "The Human Chain" that set out to prove (or disprove) that theory. 

The producers asked two very well-to-do people in New York City to try to locate a man neither of them knew, using only social contacts.  The only thing they were given was his name and photograph and the information that he lived in Brooklyn—which every New Yorker knows can be very far removed from the Upper East and Upper West sides of Manhattan, where the subjects lived—and that he was a boxer at a particular gym. They were not allowed to Google him or use any other means of research to find him. The only way they were allowed to seek him out was through their existing social networks—by asking people they knew who they thought might be able to lead them in the right direction.

As it turned out, both subjects managed to get introduced to this young man within two days.  One turned out to be four degrees removed from their target—the other, five. 

Then, the producers asked the young man to do the same thing in reverse: find a way to use his existing network to get introduced to a Broadway dancer who was starring in "A Chorus Line."  He never thought he would be able to do it—but as it turned out, he was also able to accomplish the task within 4 social hops. 

It was a fascinating show. One of the biggest take-homes for me is that you simply can't make assumptions about who people know.  Advisors frequently make the mistake of assuming that only wealthy clients can introduce them to other wealthy people.  That is a fallacy.  In fact, Horsesmouth has found that advisors' best referrals often come from their "C" clients.  We all know a LOT of people.  If I challenged you right now to find a connection through your existing network to a prominent or high-profile person in your community, I will almost guarantee that you could think of a pathway to get you there within just a few leaps.

But the only way you will ever uncover these connections is by "mapping the network" of your clients and other referral sources.  A network map lets you visualize who your client knows, so you can plan your next move.  If you know who your clients know, you can both uncover great new referral possibilities AND find connections through your clients to people you already know you want to meet. 

You know the old saying that you can't map a route if you don't know your destination?  Likewise, you can't get a steady stream of high-quality referrals if you don't understand who you want to meet, why you want to meet them, and who you know who might be able to introduce you to those types of prospects.

This is the heart of the Automatic Referrals process: gathering information about who your clients know, identifying potential prospects within those networks, and then asking for introductions to those people. Do your homework. Take your time. Find out who your clients know.  Then you can identify the acquaintances you want to meet—and ask your clients to introduce you.

Touch Referral Sources with a "Thinking About You" Call

One of my favorite prospecting experts, Art Sobczak of Business By Phone, recently gave some terrific advice for anyone trying to cultivate referral sources: "Call people and tell them you are thinking about them."

Simple, right?  Well, yes—and no.  As Art points out, people love to hear they're on your mind, but you can't just call or show up on their doorstep with no good reason to take up their time. He asks if you've ever been guilty of these very poor methods of staying connected:

The Probation Officer Approach: "Just checking in with you..."

The Baseball Opening: "Just wanted to touch base with you..."

The I've Got Too Much Time on My Hands Call: "Thought I'd give you a call to see how it's going..."

Ugh.

The point is, if you're not adding value, you're wasing their time, and yours. 

What you want to do, Art writes, is:

"...call with some news, an idea, something you heard or saw that could benefit them, a sale or promotion they could take advantage of...anything that would cause them to say, 'Oh, that's interesting stuff.'

For example,

'Hi Jim, it’s Pat at Universal Services. I was reading some new performance reports, and I started thinking about you. I realized that you might be interested in what these reports had to say, because of what you mentioned on our last call about...'"

When you read a newspaper or a magazine or a blog, be on the lookout for items that might be of interest to the potential referral sources in your network.  Share snippets of conversation or things you learn from clients and prospects that you think might be valuable to them. 

Better yet, offer the other guy some referrals first: "When Mrs. Jones mentioned this problem with her father's estate, I immediately thought of you and your expertise with this type of situation." 

Find value-added ways to let people know you're thinking of them, touch them regularly, and be patient—and watch the referrals start to flow.

Read Art's complete post, "I'm Thinking about YOU," here.

Getting Referrals in An Ugly Market

In a market like this, just heading into the office every morning can feel like climbing Mt. McKinley, so the thought of asking for referrals might seem utterly insane. But veteran advisors will tell you that, in a tough market, opportunities abound for those with the patience to seek them out.  I know advisors who have doubled or even tripled their business during bear markets. 

How do they do it?  First and foremost, they focus on maintaining and strengthening their existing relationships.  In a market like this, you need to treat every client relationship like gold—and protect it like Fort Knox.

If you have one priority right now, it needs to be proactively getting in front of your clients. Call them, e-mail them, send them letters, talk to them in as many ways as possible.

Can it be tough to make those calls when performance is lacking?  Sure. When the market is whipsawing everyone around, it's only natural to get into a siege mentality. Whether you've been in the business for five months or 25 years, the last thing you want to do is to pick up the phone and deal with a whining client. But you have to bite the bullet.

The best way to guard against the ostrich syndrome is to build client calls into your daily action plan—and, ideally, into your business plan (free registration required). If you have something on paper that says you will call your clients every month, you'll do it. Yes, it's true that clients may not be thrilled with their results—but they will be a lot happier than if you didn't call at all. 

Some advisors even take their show on the road in markets like this. I once interviewed an advisor who logged almost 25,000 miles on his car during the last big bear market. He even visited out-of-state clients while on vacation. His family wasn't too happy with him, but he kept those client relationships intact.

What you need to understand is that right now, most of your competition is hiding.  If one theme resonates among successful veteran advisors, it is the tremendous business-building opportunity that exists in difficult markets. There's a ton of business to be won from the walking wounded among your competition. Clients start looking to "change doctors" when things get scary.  And they talk to their friends and family about their fears and concerns.

So be sure to build measurable referral targets into your business plan this year.  Keep your ears open for referral clues. And don't let external events distract you from your plan. To quote business coach and Horsesmouth contributor Joe Lukacs (who has a great weekly business development audiocast, by the way): "It's so easy to sit back and say, 'It's bad; the market's bad.' You absolve yourself of responsibility for your success, you become a victim, and you get a big pity party going. The people who are succeeding refuse to be victimized. They take total responsibility for their world."

Check out these articles on dealing with an uncertain market (free registration required):

10 Rules for Reassuring Clients in Volatile Markets
When markets are volatile, we're more stressed and so are our clients. That's when it's more important than ever to articulate our recommendations and provide reassurance of a positive outcome. Here are 10 rules of effective language.

Calm Edgy Investors by Renewing Their Goals
Market gyrations make for squirmy clients.  Mellow them with some sage guidance.

Cultivate Opportunities in Trying Times
When the going gets tough, the public should be more aware of your services than ever. Here are some ideas on communicating the value of your services during the best and worst of times.

Maximum Referrals - The Blog

Our good friend and Horsesmouth contributor Daryl Logullo has launched a new referral blog. Check it out.

Daryl has also contributed a number of great posts to Automatic Referrals:

How to Stop Getting Poor Referrals From Attorneys and CPAs

Competing with Other FAs for CPA Referrals--How to Be First Among Equals

My CPA Won't Refer and Now His Son Is My Competition

'Tis the Season for Referrals

Christmas is only 5 days away. I know this without even thinking about it, because my kids have been asking me every single day for two weeks now how many days are left until Christmas! I can do the math in my sleep at this point. 

So I understand that right now, your mind may not be focused squarely on your business. But I want to remind you that the holiday season brings a special gift to financial advisors who know where to find it, and how to unwrap it. 

Right now, your clients are going to lots of holiday parties. They're seeing friends, and may be preparing to spend a good chunk of time with family. Many of them are thinking a lot about giving, and bonding, and what makes life worth living. 

Come January 2, all of this activity and thought will add up to a treasure trove of valuable information that you can unlock to generate more referrals.  As we've discussed in past articles here, one of the keys to a good referral strategy is putting on your detective hat and learning more about who your clients know.  As any good detective knows, asking the right questions can make all the difference. 

Here is your assignment for the remainder of the holidays, and for the month or so afterward. Turn that standard post-Christmas chit-chat with clients into a real priority. Ask every single client what they did for the holidays. And then, when your client tells you how lovely it was to see her new baby granddaughter enjoying her first Christmas, don't just say "that's nice" and then turn the discussion to how you want to change her asset allocation in 2008.  Ask more questions. Dig deeper. Recognize the information for what it is: an opportunity. Make a note of the information you hear so you can follow up on it later.

Ask where your clients spent the holidays.  "Did you host family?" "Did you go to any interesting parties?" "Oh, you vacationed with friends in Arizona?  Who are the friends, and where did you stay, and how do you know these folks?"  "What was the most interesting gift you received?" 

What you hear won't always be positive. The holidays can be a difficult time, people's lives aren't always going smoothly, and of course, friction can arise during those heartwarming holiday visits. If a client reveals this type of information, don't brush it under the rug or try to change the subject. Engage it. "Oh, your sister's husband just left her?  That must have been very difficult at the holidays. How are she and your niece and nephew handling it?"

You will be amazed what you didn't know, and what you'll learn, about your clients and their connections. Some of those connections may end up becoming clients, when you learn to ask more questions about them, uncover their needs, and ask for introductions.  Make sure to document every scrap of information, so you can follow up on it later. 

Oh, and there's no need to wait until after the holidays to put on that detective hat.  Any conversation you have with a client between now and year-end should include some good questions (and at least two or three follow-up questions) about their plans.  Even if they don't celebrate Christmas, you can still ask about what they'll be doing for New Year's, or whether they will be taking advantage of the season to get some vacation time in with family and friends.  For example, I asked a colleague recently what she was doing for the holidays, and she told me that her grandmother has recently been diagnosed with Parkinson's disease, and is coming to terms with the fact that it's getting to be too difficult to care for her home and her husband. This all came out in a very simple exchange (I asked one question and one follow-up question ). 

Hopefully, as an advisor, you already see the opportunity that would be opened up for you if you had this conversation with a client—especially if you just happen to have experience working with elderly clients facing similar situations.

While you're processing these suggestions, keep in mind also that the holidays are a great time to re-connect with the idea of referrals as "client-centered."  Focus on referrals as a way to give to your clients, not take from them... and you'll find that it gets much easier to ask for those introductions.

Good luck, and Happy Holidays from all of us at Horsesmouth!