Getting Clients Comfortable Discussing Referrals With Friends

Welcome to Day 7 of our Referral Clinic and Blog-a-thon.  We asked advisors to send us their toughest referral challenges. Now we're featuring the best, along with solutions from top referral experts and veteran financial advisors. 

Today's winning question was submitted by Bill C., an independent in Roswell, Georgia. Well done, Bill!

Bill's question will be answered by Chris Holman, a 20-year industry veteran and the president of Affinity Networking Systems, Inc. His sales prospecting nuggets and client acquisition strategies can be found on the Prospecting Professor. Chris is based in Minneapolis, Minnesota.

Question: "Most of my clients are more than happy to provide referrals, but it's obviously not on the top of their mind when they are amongst friends or colleagues, so they rarely bring up the topic. Or they don't know how to bring up the subject without getting personal. Do you have specific recommendations, dialogue suggestions, etc. to help my clients feel comfortable addressing the issue amongst friends and thus being able to effectively refer business to me?"

Chris Holman's answer: In the referral-dynamic between Advisor and Client, there are 6 sticky points that seem to continue crop up.

• Downside vs. Upside. From the client's perspective, what is their upside to referring their best friend, their mother, or a business colleague, to you? A thank you card? A free dinner? An 'attaboy?' In comparison, what's the downside? From the client's perspective, the downside and the worst case scenario of providing a referral—is that the referral doesn't go well, and the client loses a valuable friendship. If nothing else, the advisor should recognize and acknowledge that the client's downside outweighs the upside, when it comes to providing referrals. This acknowledgement lets the client know that you are empathetic to their concerns.


• Introductions vs. Referrals. In some cases, the term 'referrals' causes the client to freeze up, whereas 'an introduction' is much more benign-sounding. If this is the case, even though it is a semantic difference, so be it. You might find it helpful to remind your clients that you are only asking for an introduction anyway, not a lifetime commitment.


• Loose Lips Sink Friendships. It goes without saying, but I'll say it anyway. Are you completely discreet when it comes to your professional relationships? More importantly, are your clients aware that, should they provide a referral, you will guard client privacy (theirs and everyone else's) at all costs?


• Follow-Up and Thank You. Surveys have shown that one of the single biggest reasons that clients stop providing referrals is the lack of follow-though and thanks. After receiving a referral, be sure to thank your client appropriately, and inform them that you have followed through with your contact to the person who was referred to you.


• Be Specific. In some cases, it helps to remind your client as to what you will do, in specific steps, with the person who is referred to you. Some clients may have the mistaken impression that, when provided a referral, you will 'hound' this person with calls and letters—until they surrender. Outline the specific and professional steps that you take with all prospects that you are introduced to you—and this concern evaporates.


• A Touch of Class. Thank You Notes are a start, yet you might think of something even better. One advisor who I know sends out a gift certificate to the client's favorite restaurant—for BOTH the client and his 'significant other.' Another advisor learns the client's favorite charity, and makes a donation to that charity in the client's name. Either way, a creative 'thank you' is very effective.

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