How to Defeat Referral Reluctance and Change Your Outlook

Welcome to the last day of our Referral Clinic and Blog-a-thon!  It's been a great few weeks, and we're grateful to the hundreds of advisors who submitted questions. We will continue to feature new questions and answers in this space on a regular basis. In the meantime, you can revisit the Clinic questions and answers or read posts you missed by clicking on the "Referral Clinic" link on the right, under "Categories."

Today's winning question comes from Jerry R., an RIA in North Charleston, South Carolina.  Congratulations, Jerry!

Jerry's question will be answered by yours truly, Miriam Lawrence, resident referral expert at Horsesmouth and author of the Automatic Referrals blog.

Question: "I don't ever ask for referrals. I spend a lot of time trying to build a relationship with my clients but I stop short because I am afraid I will end up sounding like a salesperson (not that there's anything wrong with that) What advice can you give me to change my outlook on referrals in general?"

Answer: Jerry, you're in very good company. Many advisors never ask for referrals because of some degree of fear-ranging from vague discomfort to something approximating utter terror.  And typically they describe their feelings with words like "pushy," "greedy," and "salesy."

What's going on here?

One factor is that advisors often think their relationships with clients are much more fragile than they actually are.  Many also have negative associations around selling or prospecting. They think, sometimes on a subconscious level, that any overt business-building activity is selfish and bad.  (Our nickname for this at Horsesmouth is sales shame [free registration required].)   And they project those negative feelings onto their prospects and clients. So it's not that the client perceives the referral conversation as negative—it's that the ADVISOR perceives it that way, and projects those feelings onto the client. 

If any of these descriptions sound familiar, try this exercise to help you see yourself (and your value) from your clients' perspective and get past your fear.

There's an additional angle to consider.  Based on how you worded the question, you're primarily feeling uncomfortable about asking for referrals because you're framing them as a way to help YOU. 

And that's an entirely appropriate concern.  Ethical professionals understand that clients aren't there to serve US.  We're there to serve THEM.

But what most advisors fail to realize, because they're so wrapped up in their own concerns about building their business, is that offering to work with people their clients know IS another way to serve their clients. 

Most referrals happen not because clients are trying to help their advisors, but because they're trying to help the people they care about.  Sure, a referral will help you too, but that's secondary.  When the newly divorced client you helped get back on her feet recommends you to her friend whose husband just ran off with the babysitter, she's not doing it to make your bank account bigger; she's doing it to help her friend.   

So, in fact, a referral is an opportunity for you to help a new client—and, by extension, the person who referred you.  If you truly internalize your own value (there's a worksheet in the Automatic Referrals report designed to help with this, by the way), you'll be much more able to comprehend this truth.  It's a big paradigm shift for many advisors-and it's also critical to your success.

So, instead of thinking of yourself as scrounging for new clients, realize that when you ask for a referral, you're offering your guidance and expertise to the people your clients care about. Refocus your energies and start thinking of referrals as enhancing your clients' lives and the lives of the people they know.

If you're not there yet, don't worry—it takes time to get to this state of mind when you're used to thinking of asking for referrals as a self-centered, "salesy" activity.  But the more you ask for referrals from that client-centered place, and the more you find that you're not suffering any of the terrible consequences you were afraid of, the more confident you'll start to feel in your value and in the strength of your relationships with clients.

Good luck!

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