Asking for Referrals With Letters--Can It Be Effective?

Welcome to Day 1 of our Referral Clinic and Blog-a-thon!  We asked advisors to send us their toughest referral challenges. Now we're featuring the 20 best, along with solutions from top referral experts and veteran financial advisors. 

Today's winning question was submitted by Brandy D., independent advisor, Kimberly, Wisconsin.  Congrats, Brandy!

Tackling Brandy's question is referral expert Bill Cates, president of Referral Coach International. Bill works with financial professionals who want to build their practices by fully mastering the referral process and tapping into the lifetime value of their clients.

Question: "I ask for referrals through my Thank You letters I send to clients that have just opened account(s) with me. 

The very last paragraph reads as follows:

'Again, I thank you for doing business with me and I look forward to continuing to work with you.  If you know of someone else who is in need of assistance with their financial decisions, I would appreciate it if you would have them contact me.  I am enclosing some business cards for you to give to them.'

I send about 3 to 4 cards with this letter.  My problem is that I don't follow up with my clients after this letter goes out because I am not sure what to say. Do you have any scripts or ideas that would help me make that second request for a referral?  Also, is it a good idea to ask for a referral in my Thank You letter?"

Bill Cates' answer:  Let me answer the last question first. "Is it a good idea to ask for referrals in my Thank You letter?"  I think you should let the "thank-you" letter be pretty much just that. Say thank you. Don't make it into a referral letter.

With that said, I think you can get away with planting a referral seed. In the PS, say something like: "PS—I'm never too busy to see if I can help other people you care about."

Also, asking for referrals with a letter rarely produces any results—especially when you don't follow up. As an aside, that's one habit you need to break yourself of—not following up. Don't do anything with prospects or clients unless you plan to follow up. When you don't follow up, you're out of integrity and you're usually wasting everyone's time.

I'll give you some language to help you with the follow-up calls to your clients—so you can maybe turn those letters into something productive. Then I'm going to give you a better formula to follow.

YOU: "George, this is Mary Smith. Do you have a couple of minutes?"

CLIENT: "For you Mary? Always!"

YOU: "Thanks, George. I'm calling as a follow up to something I mentioned in my last letter to you. As you may recall, I sent you a few of my business cards and suggested that I was available to help others who you think should know about the work I do.

"I don't want to assume anything, but I was wondering if you might be open to exploring who you think should be aware of the important work I do. Could we try that for a few minutes?"

From here, you move on and brainstorm some referrals.

There are two problems with asking for referrals over the phone. First, you can't see their body language—which often gives you clues to their comfort level around referrals. Second, it's hard to create enough time to have this conversation. Unless you arrange a specific phone appointment, most clients aren't prepared for the 15-20 minute phone call to talk referrals.

The best way to ask for referrals is in person. Here's the formula I promised—assuming you have enough of a value proposition that you run at least 3 meetings with your new clients.

First Meeting—Near the end, explore the value they feel they have received so far, and then plant a referral seed ("I'm never too busy to see if I can help others you care about with the work I do.")

Second Meeting—Near the end of the meeting, explore the value they feel they have received from the first two meetings. Then plant another referral seed such as "Don't keep me a secret."

Third Meeting (delivery of a financial product or plan)—Explore the value of your entire process, then move forward and ask for referrals.

If you do apply this formula on a regular basis, you'll create a steady flow of great referrals.

I hope you find this helpful.

Got questions or thoughts about today's challenge or Bill's response? Post a comment.

Comments

[Michael Noble]

I have found that during the final planning process, at the point of explaining the general plan of action anticipated results etc,. is the best time to simply ask: "You can see what we are trying to accomplish and the methodologies the we are implementing to achieve our goals, do you know other people who could benefit from this type service?"

Invariably, I will receive at least one name, and an offer to vouch for me.

[Bill Cates]

Michelle,
While what you are doing is creating some results, I think you might find it even more effective to do two things:
1. Rather then tell them the value you have brought to them, and will be bringing. Ask them to tell you the value they feel they are getting. By having them put it in their own words, it becomes more real and more meaningful to them.
2. Rather than say "who do you know?" Brainstorm with them. Together, you think through it. You'll get more and often better referrals this way.
Either way, asking is better than not asking. BILL

[Brad Bengtson]

I am a Mortgage Loan Officer and I really only have one or two face to face meetings. When is the best time to ask for the referral in person?

[Bill Cates]

Brad,

Try to always have at least two face-to-face meetings. It will be worth the time, if you are committed to getting more referrals. If you go to the settlement, you'll "wow" your clients and be much more referable.

In the first meeting, you can plant the seed for referrals by saying, "Please don't keep me a secret." After the second meeting, check in to make sure you have a happy client, then ask for referrals. BILL