I was struck last week by this passage in Jeff Thorsteinson's Horsesmouth article A 5-Step System For Building Centers of Influence (free registration required):
Some advisors fail to maximize their referrals from professional sources because of their inability to stick with a referral strategy. The fact is, it takes four or five times longer to secure a referral from a professional source than it does from an existing client. If you don't secure a referral from a given source within 12 months, don't give up. Conversely, if you've had some success at first, but then referrals have dropped off, that's not necessarily a reason to change your strategy.
Thorsteinson goes on to explain that you've got to treat COIs like your most important clients. He recommends 20 contacts a year, including a monthly COI-focused newsletter, as well as quarterly events just for COIs.
Is all that effort really worth it? You'd better believe it. For example, take the story of an advisor who started his own business networking group (free registration required). Peter Reuss invested $5,000 and hundreds of hours to get the group of the ground... and his perseverance paid off: he grew assets from $18 million to $55 million in just two years, mainly through referrals from members of the group.
If you understand that referral marketing requires time, patience, and strategic thinking, you can harness its tremendous power. The results will come. Just develop a strategy and stick with it.
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