The 7 Deadly Sins That Destroy Referral Business

Are you sabotaging your own success? Horsesmouth contributor Matt Anderson, president of the Referral Authority, recently shared his list of the top seven worst mistakes advisors make around referrals.  See if any of these sound familiar.

1. Don't know who is giving them referrals. Many advisors don't know where their referral business comes from or why their top referral sources like them so much.

2. Don't know when to ask for referrals. Many FAs ask at the wrong time.

3. Have an unhealthy mindset about asking for referrals. Many avisors develop a negative attitude about referrals, or even outright fear [free registration required].

4. Don't know what drives referral conversations. There are six steps to an effective referral conversation, but many advisors do not know them or consistently follow them.

5. No niche. For FAs, there are enormous advantages to concentrating on a focused demographic. Do you know the five qualities of a good target market?  (By the way, more referrals are just one reason for having a niche!)

6. No strategic referral relationships with other professionals. Advisors must deliberately build reciprocal referral partnerships with other professionals.

7. No system in place for keeping in touch with clients year-round. People think about themselves 95% of the time; they don't sit around brainstorming ways to refer more clients to their advisor.  If you want to get referrals, you've got to stay top of mind.

Are you making any of these mistakes?  Read the entire article, "The 7 Deadly Sins That Destroy Referral Business," (free registration required) and stop missing out on all of those referrals you could be getting!

The Art of the Referral Thank-You

When you get a referral, regardless of whether you end up with a new client or not, be sure to give your client a hearty and gracious thank-you, IMMEDIATELY. A hard copy, handwritten note is an absolute must.  E-mail and telephone thanks are NOT acceptable substitutes.

The written thank-you is a dying art—so it's very much to your benefit if you're one of the few advisors who knows how to do it properly.

For the best effect, don't use your firm's letterhead.  Instead, get yourself some high-quality stationery engraved simply with your name, and enclose your business card with the note.  Crane's is one of the best sources of this type of stationery.

A thank-you note need not be long or elaborate.  A few thoughtful lines will do.  A pretty standard format is three to five lines in length.  Start off with an expression of gratitude for the referral. Then provide a bit of detail to personalize your thanks.  Mention any plans you may have to be in touch in the near future. Say thank you again, and close. It's as simple as that.

Here is a sample note thanking a client for a referral. This is provided simply to give you an idea of how the wording might go. Your own notes should be true to your own personal style and voice.

Dear Paul and Michelle,

Many thanks for introducing me to Roger and Pamela Johnson last Saturday.  I sat down with the Johnsons this morning, which only reinforced what lovely people they are (I would expect nothing less from friends of yours!) with whom it will be a great pleasure to work.

Thank you again for your kind introduction. It is clients like you that make my job such a joy.

Warmly,
John

And here is a sample note of thanks to another professional who has referred a client to you. Notice that it includes the other professional in the process by offering to share the completed financial plan... this is appropriate if the referral came from a relevant professional, such as a CPA or estate attorney.

Dear Don,

I so appreciate the confidence you have in me, and the many referrals you have sent my way. I met with the Martins this morning, and I know they are going to be fun clients. 

I will give you a call as soon as I complete their financial plan and we can review it over lunch—my treat.

Thanks again for all your support!      
      
Best regards,
Julie

Don't underestimate the power of a handwritten thank-you note.  Send them regularly and you'll set yourself apart from your competition and impress 100% of your clients and connections.