Referral anxiety--how to handle a nervous client

In my last post, Should you contact referrals by email?, we talked about a client who's promised to email some acquaintances and tell them about you, but then failed to follow through.  We said the most likely explanation is simple distraction—the client may simply be busy. 

But there is another possibility.  Maybe she's procrastinating because she's anxious.  Maybe she's worried (and not even aware of it) about what you'll say to her friend or colleague.  What if they're not interested? What if you put on the hard sell? 

If you suspect this may be the problem, it's perfectly fine to raise the subject (gently) with the client.  "It is very kind of you to offer to email so-and-so about me, Joan.  I'm sensing, though, that maybe you're having second thoughts or feeling a little uncomfortable about it?   If so, perhaps we can talk about your concerns to make sure you're comfortable with the process." 

At this point the client might simply say, "Oh, no, not at all... I'm sorry, I've just been very busy at work and hadn't gotten around to it yet.  I'll get that email out tomorrow."  Or, she might agree that yes, in fact, she's got some concerns, and you'll have a chance to allay them.

It can be difficult to initiate these types of conversations. We all have a tendency to want to avoid them, afraid that if we talk about it, the client might decide to rescind the offer of an introduction.  But we have to remember that if a client offers an introduction or referral without being 100% comfortable about it, chances are the promise may never come to fruition anyway—plus, now we've got a tense client.

So get whatever's bothering her out into the open air.  Chances are very slim you'll lose the referral, but even if you do—better to lose a referral than a client.

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Should you contact referrals by email?

In his Referral Minute newsletter this week, Bill Cates discusses a difficult scenario: a client promises to email some people and introduce the advisor, but never does.  Finally he just tells the advisor to go ahead and email the prospects directly himself. 

Bill goes on to offer the following email template to use in this situation:

Subject: Bob Jones recommended I contact you.

Dear Joe,

Your friend, Bob Jones, recommended I contact you.

My partner and I have done some very high-level financial planning for Bob and he thought you should know about the type of work we do.

I was hoping we could find a time to speak briefly over the phone in the next week or so. At that time, we can determine if I might become a valuable resource for you, as I have for Bob.

Perhaps you can bounce back with a day and time frame when we might set up this quick call. Or, feel free to call me at 555-555-5555.

Thank you. I look forward to speaking with you soon.

As Bill says, the point here is not to try to set a face-to-face meeting via email, but rather to "'negotiate' a quick phone appointment," which will hopefully lead to more. 

This is indeed a very helpful template if the only choice is in fact to email the referrals directly. But, as Bill points out, the entire scenario is less than ideal.  Introductions always trump referrals (free registration required).

I like to think of it in terms of football.  Imagine that your client is the quarterback, you're the receiver, and the referral is the ball.  The closer the quarterback is to you when the ball leaves his hands, the more likely it is to land safely in your arms.  The email scenario is like a long pass; there's a lot more room for error and for external forces to push that ball off in a direction you didn't want it to go.  A live introduction over lunch, on the other hand, is equivalent to a handoff from six inches away.   You could still lose the ball in the end, but your odds of success are a heck of a lot higher.

So... maybe we can step back and turn this situation around with a little analysis.  The client promised to email the referrals but never did.  Why?  Most likely, it's just a time problem.  You could offer to draft a quick introductory email for him, explaining that you've done this before and it will be much less time consuming for him that way.  If he likes it, he can just plug in his name and the prospect's name and hit send.  He doesn't have to do any work, and you still get to bask in what we call the "credibility glow" of his introduction.  He may say "no," but hey, it's worth asking.  Your offer may also convey to him that you're serious and really would like to follow up on these referrals, and that alone might goose him into finding the time to get it done himself.

Alternatively, maybe the client is procrastinating because he's actually uncomfortable about providing the referrals in the first place.  We'll talk about that one next time.

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Prospects prefer referrals from "a person like me"

Whose opinion counts most to your prospective clients?  According to the most recent survey by The Edelman Trust Barometer, the answer is most likely "a person like me."   (Thanks to the Church of the Customer for pointing out this link.)

This fits nicely with research conducted by Prince & Associates a few years ago. They found that at 2/3 of affluent clients said they'd prefer to find a financial advisor by referral, and about half of those would look to friends or colleagues (aka "people like me") for that referral:

Your best prospects WANT to find you by referral.  If you're not regularly asking "people like them" for introductions, it's time to get started.

The surprising truth--how referrals affect client relationships

Do you avoid asking for referrals because you're convinced your clients will think you're pushy? Selfish? A "greedy bastard?" (That's a direct quote from a financial advisor explaining why he doesn't ask.)

Get ready for a shock.  85% of the financial advisors we surveyed told us that referrals actually strengthen their relationships with their clients. 

So here you are, convinced that if you ask your best client for a referral, he'll storm out of your office and immediately transfer every last penny directly to your competitor—when the reality is, the relationship will most likely do even BETTER over time if he starts giving you referrals. 

Why? Maybe clients cement your value even more in their own minds when they recommend you to someone else (after all, why would they refer you if they didn't love you), or maybe providing referrals makes them feel like part of your team.  Whatever the reason, it isn't really as counterintuitive as it seems when you stop and think about it.

Do you have experience with this phenomenon?  Share by clicking on the "comments" link below.

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Consistency drives referral success

I played basketball in high school. I didn't play well, mind you—but I played. The one area where I did stand out a bit was in free-throw shooting. I routinely made 85-90% of my foul shots, both in practice and in games. I didn't get to use my one skill in games very much—that would, after all, have entailed getting out on the court—but it was still a comforting skill to have.

That's why I was so thrilled when I heard about Deb Remmerde, a sophomore at Northwestern College in Orange City, Iowa. She did something no one else has ever done in the history of basketball, at any level (including the NBA): she made 133 free throws in a row in competition before missing for the first time.

The CBS Early Show decided to put Remmerde to the test earlier this week. They put in her a gym full of supportive fans and asked her to shoot free throws for two hours. When it was all over, she had made 580 out of 585 attempts. What I found most striking was her consistency of form. Her timing and motion were absolutely identical from one shot to the next. And she said as much when Harry Smith asked her what her secret is: I don't think there's really any secret," was her response . "I think it's... having a routine that works and just having a lot of repetitions."

I was also struck by the fact that those exceptionally rare occasions when she DID miss didn't seem to phase her at all. She'd made 256 in a row when she missed one. That would rattle a lot of people, but Remmerde just got right back in the groove and made another 100+ in a row before missing again.

What does this have to do with referrals? A lot. Lack of consistency is one of the most common referral saboteurs for financial advisors. Once we find a referral approach that works, we need to apply it systematically and consistently. When we do that, the referrals will start to flow. And no allowing "missed shots" to throw you off your game. Get your routine down and stick with it (free registration required) and it won't be long before you start blowing away your own personal best.

Want more referrals? Show your clients some love.

Whatever romantic plans you may have this Valentine's Day, I've got one more thing to add to your agenda.  Take a few minutes to think about how you treat your clients.

And be honest.  Are you showing them enough love? 

You've got to develop your own creative ways of providing top-quality service. Your goal is to create "raving fans," clients and connections so anxious to tell others about you that they have trouble containing themselves.

How do you create raving fans? Well, it obviously depends in part on your relationship with them. Clients and strategic alliance partners, for example, are looking for different things. But regardless of who's on the receiving end, the bottom line is giving in a way that creates delight.

Take Elizabeth Baldwin-Ross, a financial advisor in Syracuse, N.Y. (one of the country's snowiest spots).  She swung by a widowed client's home one day in February with coffee and muffins for breakfast, but found the home snowbound and vacant. So she borrowed a snow shovel from a neighbor and shoveled the walk. "Of course, I returned the shovel with a thank-you note written on the back of my business card," Baldwin-Ross told us. "My client tells that snow-shoveling story to everyone she knows."

And that's no surprise.  When it comes to referrals, love really does make the world go 'round.

Already sharing the love?  Tell us how you delight your clients by clicking on "comments" below.

Want more ideas for turning clients into raving fans?  Check out these articles (free registration required):

9 Client Service Tactics That Generate Business
With more and more investors carping about lackluster service, now's the time to take that extra step that really shows clients you care.  Here are nine creative service tactics that build more than goodwill--they build business.

How to Win Your Clients' Appreciation
Inspired by a Broadway star's passion for his audience, this advisor decided to win her clients' loyalty by treating them like front-row fans.

7 Service Tips That Have Clients Feeling the Love
In a new book, the retail magnate who's dressed Wall Street's best shares his secrets for building loyal, long-lasting client relationships.

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Free teleconference with networking gurus Ivan Misner and Bob Burg

Endless Referrals author Bob Burg has a special treat planned for Tuesday, February 21 at 4:00 p.m. Eastern: a free teleconference featuring Dr. Ivan Misner, founder of Business Network International (BNI) and bestselling author of books such as Masters of Networking, Masters of Success, and The World's Greatest Marketing Secret.

Early registrants for this "Titans of Networking" teleconference will have the opportunity to submit questions for Bob and Dr. Misner to answer during the call. "Tune in and be ready to take a whole bunch of notes," Bob writes in his weekly e-zine Winning Without Intimidation, "because 'Doc Ivan' is ready to let it all hang out and share with you the information that can help you make 2006 your most profitable year ever."

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Why "C" clients can be great referral sources

Chris Holman, "The Prospecting Professor," writes in a recent post about centers of influence that while most advisors crave relationships with attorneys and CPAs, they often ignore the so-called "superconnectors" around them.

These are the folks who seem to know everyone. Journalists, restaurant owners, and PR professionals often fit the bill—in fact, I wrote a few years ago about one connector I happen to know who is a publicist and a networker with talent that must be seen to be believed (free registration required).  "One of the most connected persons I know is the couple (two people) who own the local coffee shop and bakery," Holman writes. "They seem to know everyone in the neighborhood." 

Uh... YEAH.  I don't know about you, but the guy who owns the local diner in my town knows pretty much everyone too.

There's more to the story, though. We should also remember that sometimes—often, in fact—those "superconnectors" are already our clients. And they may be people whom we consider to be only B- or even C-level clients based on asset levels.  We hear often from advisors whose biggest clients were referred by their smallest ones. 

So when you segment your book and look to replicate your top clients, don't ignore those "superconnector Cs."  They may not have millions in investable assets, but their referral power is worth its weight in gold.

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Referrals: how often can I ask?

We got this email not long ago from Terry, an independent in Houston:

I have been trying to incorporate referrals for my business plan. However, I am not sure of two things: 1. How often can I ask a client for a referral and 2. What about clients I have not worked with for a long time (less than a year)?

We hear variations on these questions quite a lot.  Here's what we told Terry.

There is no hard and fast answer to how often you can ask a client for referrals. Like many things, it depends entirely on the client, your relationship with the client, and what types of referrals or introductions you're asking for. Some clients will have a helper mentality—either they'll be very interested in helping you, or very interested in helping the people they're referring. Those people can be approached with more frequency.

In general, though, it's better to be safe than sorry.  Target your referral requests very carefully, so you get maximum "bang for the buck," and don't ask any one client for more than a few referrals or introductions during the course of a year.

If you target your requests properly, you'll have a better chance of actually getting a client as a result. You'll also be raising the client's awareness that you're interested in referrals, so he or she may be more likely to start offering them proactively. Also, if you're focusing your efforts too heavily on any one client, that probably means you're not fully investigating and maximizing referral opportunities with other clients and referral sources. As with investments, it's good to stay diversified!

As for the second issue, it's critical to have a solid relationship with any potential referral source before asking them for something. Give first, get later, is a good golden rule.

If your business is mostly transactional and you've been in close contact with a client but not written any tickets for a while, it may be just fine to ask for a referral or introduction.  If, on the other hand, you literally have not spoken or met with a client for 6 months, your first conversation would not be the appropriate time to ask--unless you're able to deliver some serious value (free registration required) in that conversation ("Mrs. Jones, I just called to let you know your portfolio is up 20% since July") and feel VERY comfortable that they're feeling warm and fuzzy about you.

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4 ways NOT to ask for referrals

In a recent post, I talked about the client-centered referral mindset: positioning your referral requests in terms of how you can help your clients and the people they know, not in terms of how they can help you.

Common sense, right?  That's why it's amazing how many "referral experts" recommend methods of asking for referrals that not only focus on the advisor, but actually border on blackmail.

Do any of these sound familiar?

• "I can either spend my time looking for new clients or providing better service to your account. You determine that via the referrals you send me. Which will it be?"
• "Since you've found value in what I've done for you, let's sit down and brainstorm: Who do you know who could benefit from my services?"
• "I'd really appreciate it if you could refer me to a few of your friends. I need new clients to stay in business—it's so hard these days to find prospects."
• "There are two ways I get paid—from commissions and from your referrals."

As Horsesmouth expert and referral guru Michael Brizz says, if you're going to position referrals that way, you might as well have the word 'bloodsucker' branded across your head.

Here's a better way:

"You mentioned that your father is retiring soon and that he's been worrying about what's going to happen with his company's pension plan.  I have helped a number of clients who have also retired from XYZ Corporation over the past few years, and I think may be able to answer some of his questions and put his mind at ease.  Would you like to talk to him about setting up a time for the three of us to get together?"

See the difference?  Now you're a potential hero—a caring expert rather than an extortionist.

Check out chapter two of Automatic Referrals for more about the client-centered referral approach.  Also, take a look at Referrals: 8 Tactics That Make Asking Easier (free registration required) for more about how to make your referral requests more effective.

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