Rid Your Clients of Common Referral Objections

Advisor Amy Berk from Denver, CO, was running into a wall with her referral efforts—actually, she was running into three: three objections she was getting from her clients when she asked them about referring.

They were:

1. "I don't talk to people about their money."
2. "I don't know anyone."
3. "I already gave you referrals."

"How do you handle those nasty objections?" Amy asked.

These objections and others like them can bring a referral conversation to a screeching halt. How do you not only address these objections, but do so in a way that makes the client genuinely want to give referrals? 

Bob David, Horsesmouth Director of Advisor Programs and leader of the Automatic Referrals Jumpstart Program, had this to say about overcoming the first of Amy's objections: "When someone says they don't talk to people about their money, it's most often because we haven't positioned the request in a client centered way, and it needs to be more focused on exactly what you can do to help the person you're asking to be introduced to." If a client sees that you can help a peer with a problem they've been struggling with, they won't have reservations about bringing your name up.

As far as addressing the "I don't know anyone" objection, Bob stresses the importance of specificity. "Clients need to understand who we can best help, why or what problems we can solve before they can go through their mental rolodex and get a picture of someone in their heads," he says. Your client probably knows plenty of people who would make for an ideal client, but they have no idea what criteria define one. It's your charge to make sure they know exactly what services you can provide so that they have a clearer picture of who could benefit from them.

When a client says, "I already gave you referrals," it's a definite sign, Bob points out, that the requests are coming at the wrong time. You need to make sure that you haven’t been over-zealous in your referral requests.

The one mistake you can make with these objections, or any objection for that matter, is to let them stop you. Any concern a client may have can be addressed and overcome.

Bridging the All-Important Referral / Client Gap

Getting referred to is a big step toward gaining a client, but the business relationship is far from cemented at this point. You've been introduced to the referral, but things can still be awkward between you. After all, you haven't worked together and probably don't know much about one another. Sometimes it can be tough to bridge the gap and make the transition between the referral and the first appointment.

Brian V., an advisor in Arcadia, CA, asked Bob David, Horsesmouth Director of Advisor Programs and creator of the Automatic Referrals Jumpstart Program, how to turn that new referral into a new client. "A lot of times I am introduced to referrals and these referrals understand what business I am in," Brian wrote. "However, the topic of their investment needs never seems to come up in our conversations no matter how many hints I drop. Once you get introduced to a referral, what is the best way to approach the referral and ask for an appointment or to take your relationship to the next level?"

To transition the nascent relationship into a business one, you need to focus on the referral's perspective, or what Bob David calls the "client centered mindset." "Focus all your attention on learning about them and being interested in their situation, their business, their hobbies, etc. Then look for an opening," says Bob.

Once you discover more about them, you can explain how you've helped those in similar situations. You may think the natural thing to talk about is investments, but as Bob points out, that's not really the case. "We tend to think the opening is always about investments," he says, "But from the client's perspective, it's more important to identify a problem that needs to be solved. For example, if you're talking to someone who owns a business, you might ask how they got started, the nature of the business, how they would describe their best customers, etc...then mention you've been able to help other business owners and ask how they feel about their current retirement plan, cash management, succession plans, etc."

It really comes down to getting into the referral's head and learning their unique perspective. Once you do that, you're in a position to address their true needs and the business side of the relationship will naturally develop.

Client Referrals: Megaphone or Muffler?

Just read a referral post on the blog of Kirsty Dunphey, an Australian entrepreneur and self-made millionaire, that really resonated.

Kirsty was referred to a particular store by two different friends. When she mentioned to the proprietors that she had been referred, they showed no interest in learning who these loyal customers were who had recommended the store to their friend. 

As Kirsty points out, had they asked and gotten this information, the owners could have sent a thank-you note to these raving fans, or called and thanked them, or even sent them a discount voucher for their next visit to the store.

"When someone refers a friend to your business," Kirsty explains, "you’ve just got yourself a walking, talking billboard going around advertising your business! What you do to thank them for doing your marketing for you can act as a megaphone or a muffler. Which would you prefer?"

Do you religiously follow up with every referral source and say thanks?  Do you send thank-you notes? Gifts?  If not, don't wait! Start now. Reward those raving fans for trumpeting you to everyone they know, and they'll trumpet even louder.