The ABCs of Automatic Referrals: Network Mapping and the Six Degrees of Separation

Everyone has heard of the concept of Six Degrees of Separation—the idea that through our networks of acquaintances, none of us is more than 6 steps removed from everyone else on the planet.  I  saw a great TV documentary a couple of years ago called "The Human Chain" that set out to prove (or disprove) that theory. 

The producers asked two very well-to-do people in New York City to try to locate a man neither of them knew, using only social contacts.  The only thing they were given was his name and photograph and the information that he lived in Brooklyn—which every New Yorker knows can be very far removed from the Upper East and Upper West sides of Manhattan, where the subjects lived—and that he was a boxer at a particular gym. They were not allowed to Google him or use any other means of research to find him. The only way they were allowed to seek him out was through their existing social networks—by asking people they knew who they thought might be able to lead them in the right direction.

As it turned out, both subjects managed to get introduced to this young man within two days.  One turned out to be four degrees removed from their target—the other, five. 

Then, the producers asked the young man to do the same thing in reverse: find a way to use his existing network to get introduced to a Broadway dancer who was starring in "A Chorus Line."  He never thought he would be able to do it—but as it turned out, he was also able to accomplish the task within 4 social hops. 

It was a fascinating show. One of the biggest take-homes for me is that you simply can't make assumptions about who people know.  Advisors frequently make the mistake of assuming that only wealthy clients can introduce them to other wealthy people.  That is a fallacy.  In fact, Horsesmouth has found that advisors' best referrals often come from their "C" clients.  We all know a LOT of people.  If I challenged you right now to find a connection through your existing network to a prominent or high-profile person in your community, I will almost guarantee that you could think of a pathway to get you there within just a few leaps.

But the only way you will ever uncover these connections is by "mapping the network" of your clients and other referral sources.  A network map lets you visualize who your client knows, so you can plan your next move.  If you know who your clients know, you can both uncover great new referral possibilities AND find connections through your clients to people you already know you want to meet. 

You know the old saying that you can't map a route if you don't know your destination?  Likewise, you can't get a steady stream of high-quality referrals if you don't understand who you want to meet, why you want to meet them, and who you know who might be able to introduce you to those types of prospects.

This is the heart of the Automatic Referrals process: gathering information about who your clients know, identifying potential prospects within those networks, and then asking for introductions to those people. Do your homework. Take your time. Find out who your clients know.  Then you can identify the acquaintances you want to meet—and ask your clients to introduce you.

The ABCs of Automatic Referrals: M is for Mantra

You’ve most likely heard the tongue-in-cheek phrase, "It’s all about me." People use it as a joke, but typically, that’s how advisors think about referrals: in a self-centered way.

That may seem only natural. After all, the point is to get more clients and more assets, right?

Well, yes. But there’s a problem. Positioning referrals in terms of yourself and your business runs counter to basic marketing principles, which dictate that we must always put the client’s interests first.

There is a much more effective way to think about referrals: the client-centered way. This paradigm is all about bringing value to your client relationships, enhancing their lives and the lives of people they know. Not only will this approach motivate clients to provide you with more names and introductions, it will make you feel better about asking in the first place.

Make this your mantra: Referrals are about helping clients and the people they know.

Instead of asking clients to go out of their way to help you, let them know that you’re never too busy to help them, and by extension their family members, friends, and business associates. Instead of thinking of yourself as scrounging for new clients, realize that you are offering the benefits of your guidance and expertise to the people your clients care about the most.

There are three core beliefs at the heart of the referral mindset:

1. You provide value.
2. Your clients and colleagues recognize and appreciate your value.
3. Your expertise can help some of the people your clients know.

Close your eyes and feel the truth of these statements. You are helping people right now. They know others you could help. But the only way they’re going to know you can help is if you offer. And that's how you should be positioning your introduction and referral requests.

The ABCs of Automatic Referrals: L is for Listen

  Have you ever noticed that the best conversationalists are the people who let YOU do all the talking?  You know these folks. They ask you question after question and seem genuine interested in the answers. They pay attention.

These are the people most of us most like to be with, because they make us feel special and important. Well, your clients are no different, except perhaps that they are paying you, and therefore deserve your full attention even more than someone you just met at a cocktail party.

Advisors who listen well are more likely to have happy, satisfied clients—and that's the first step on the road to more referrals.

It's also important to remember that listening is a mission-critical skill in the Automatic Referrals process.  Remember that detective work is a big part of that process.  Give people a chance to talk, ask some simple probing follow-up questions, and you'll be amazed what you'll learn that can help lead you to great prospective referrals.

Here are a few tips to help you fine-tune your listening skills:

• Clear your mind. We all have a multitude of thoughts going through our heads at any given time. However, it is important that clients be given the full attention they deserve. Mentally put everything else aside. For the time you are together, your conscious self belongs to your client or prospect.
• Make eye contact. Show the client you want the business and have nothing else on your mind or agenda.
• Signal that you are listening and watch your cues. Don't let on that you have more important things to do. Checking your watch or pager implies your time is more valuable than your client's. Use affirming non-verbal cues such as smiling, nodding and attentively leaning forward.
• Be comfortable with silence. People often make their most revealing comments when you allow a silence to persist for a few seconds longer than might initially seem comfortable. Let YOUR client's words be the ones to ring in your ears RATHER THAN your own.
• Don't interrupt. Pause for three seconds after your client finishes a thought before responding. People speak at different speeds. Some speak slowly and others may stutter. Allow them to finish what they have to say.

Check out these additional resources (free registration required) about how to become a better listener.

Do You Really Listen to Your Clients?
Or do you merely wait to talk? There's more to listening than not talking—and prospects and clients can tell the difference.

How to Get Prospects Really Talking
If you want to motivate prospects to act, you've got to know how to appeal to their emotions—and that means asking four important questions.

Shut Up! 8 Reasons to Keep Quiet With Your Clients
People will pour out an astonishing amount of useful information if you just give them a chance. Try this technique during your next client meeting.

The ABCs of Automatic Referrals: K is for K.I.S.S. (Keep It Simple and Specific)

How many times have you asked for referrals and heard the reply, "I’m sorry, I can’t think of anyone off the top of my head?" I bet it’s a lot.

Advisors tend to assume that the reason for dismal results like these is that their referral sources are reluctant to provide names. While this may occasionally be true, the "I don’t know anyone" response is much more often the result of asking referral sources to work too hard.

Our brains are essentially databases that we scan when we need to retrieve information. When you ask a client for a referral, she has to scan her entire "database" of acquaintances (which numbers in the hundreds, at least) and then narrow down the possibilities to come up with one or two names, all in a matter of minutes. Chances are she’s going to draw a blank. 

That's why, when you ask for a referral, you have to give clients some simple and specific details to help them define and target their "search."

Let’s say one of your fellow members of the Chamber of Commerce, Mr. Jones, owns a busy café on your town’s main drag and is an active member of the state restaurant association. And restaurant equipment suppliers just happen to be one of your target markets. If you ask Mr. Jones the generic question, "Can you think of anyone else who could benefit from my services?" it probably won't even occur to him to look in the "suppliers" section of his mental database. But how about if you get very specific? What if you were to say, "I have a number of clients who own equipment supply firms, and I've done a lot of work helping them with setting up 401(k)s for their companies and preparing to sell their businesses (free registration required) when they're ready to retire. Do you think you could introduce me to some of the suppliers you deal with, so I can find out if they might need that type of help?"

Mr. Jones now knows precisely which mental file cabinet to open. And that file drawer just may contain some stellar referrals for you.

The ABCs of Automatic Referrals: J is for Jumpstart

I've been writing this blog for almost a year and a half now.  There's a lot to say about referrals and client relationships and networking, and I'm glad you are here taking the time to read it.

But you know, when you really come down to it, reading this blog will only get you a fraction of the way to the referral success you deserve. Even reading the Automatic Referrals report will only get you part of the way there.

Because in the end, all the reading and thinking and preparing in the world won't put more clients or assets in your book.

The only way to effect positive change in your business is to jumpstart yourself and take action.

This doesn't mean you should stick with the status quo. You SHOULD read about new and potentially transformative approaches to referrals. You SHOULD think about what you are and are not doing that may be holding you back.  But at some point, you have to stop thinking about getting more referrals, and just get out there and GET them. 

If you haven't tried any of the ideas you've been reading here for the past year and a half, try them. If you haven't gotten around to investing in Automatic Referrals yet, get around to it. If you already have it on the shelf and just haven't found time to read it yet, find the time. 

Then, remember that you can't just read a report and expect magic fairy dust to come spraying out of the pages and transform you into a top producer. You've got to commit yourself to full participation in your own development and your own life. That means actually completing the worksheets in the report and using them in your business. You can also be on the lookout for a series of public Jumpstart programs from Horsesmouth later this year designed to help you start implementing the Automatic Referrals process in your business.

We know that change is difficult.We'll keep on blogging and sending you ideas and tips and success stories. But we've heard from enough advisors at this point to know that when you DO actually make the necessary changes to implement a real referral process in your practice, it can change your professional life.  As Andrew Jackson said, "Take time to deliberate; but when the time for action arrives, stop thinking and go in."

'Nuff said.

The ABCs of Automatic Referrals: I is for Introduction

f you've been reading this blog for any length of time, you've probably noticed that we stress asking for introductions over asking for referrals. Why is that?

Well, in the best of all possible worlds, you would get a personal introduction to every new prospect with whom you want to do business. An introduction is nearly always better than a referral, for a number of reasons.

• A face-to-face introduction boosts your credibility. Even though your client may never directly endorse you, the prospect will infer such an endorsement. That implied endorsement is tremendously important, especially when you're dealing with high-net-worth prospects—because the research says that these prospects want to establish their financial advisory relationships through referral or introduction. When your client actually introduces you to their friend or family member, the trust the friend or family member feels for the client automatically extends to you to some degree. We call this "the credibility glow."Sometimes clients will go the extra mile and endorse you.They might mention what a great job you've done for them, or tell the prospect they would be crazy not to meet with you. It doesn't get any better than that!
• An introduction often makes clients more comfortable because it lets them keep some control over the relationship. Some clients are nervous about handing over a name and number because they don't know if the person they're referring is interested in hearing from you. They also don't know what you are going to say or do once the information is in your hands. What if you're pushy or embarrass them? With an introduction, they get to mediate and ensure that the meeting happens on THEIR terms. Introductions in social settings can also feel less pressured and more casual.
• Introductions give YOU more control. They allow you to be more proactive about scheduling a meeting and making it happen. Isn't it better to be scheduled for brunch on Sunday or golf on Friday afternoon, rather than waiting for the client to call with a name and phone number, or trying to chase down a referral?
• Face-to-face introductions let you do the Malcolm Gladwell "Blink" thing.  This is especially true in a social context. You can look the prospect in the eye, shake his or her hand, and get a feel for whether or not this person is someone with whom you want to work—BEFORE you try to solicit the business. This can save everyone embarrassment and trouble down the road.

So next time you're preparing to ask for a referral, think "introduction" instead. And let us know about the results you get. We love to hear from you.

The ABCs of Automatic Referrals: H is for Honor

One of the biggest misconceptions I hear from advisors is the idea that asking for referrals will ruin their reputation or destroy their professional image--that it is somehow dishonorable.  Here's what a few advisors wrote in our recent call for referral challenges:

"I've been turned off in the past when people have asked me for referrals and sure don't want to come across that way to others. That's mainly why I don't specifically ask for referrals. How can I ask for referrals and at the same time not be pushy or come across as desperate/non-professional? " Andy, Independent advisor, Dallas, Texas

"It's very difficult to ask my best clients for referrals as I do not want to sound strapped for business. How can I phrase a referral request that sounds professional?"  B.F., regional advisor, Philadelphia, Pennsylvania

"I have been in the business for many years. I recently identified seven clients that I would like to clone. We have a great relationship and I would like their help. How can I ask them for referrals without sounding like a beggar or a pushy salesperson?"  William, independent advisor, Minneapolis, Minnesota

In fact, it's not the act of asking that causes people to sound desperate or unprofessional—it's the WAY they ask. 

If you drop misty-eyed to your knees in front of your client, clutch his hand and plead that you'll be bankrupt within 24 hours if he doesn't cough up some referrals, then yes, you may leave a bad impression.

But getting back to reality, if you position your requests the way you should anyway (for general effectiveness), you will preserve honor and then some.  Because you're going to position yourself not as a desperate salesperson, but as the capable expert you are, someone who has helped your client and recognizes an opportunity to help someone else the client knows.  "Wow, it sounds from what you've said like your brother may not be getting the tax protection he needs.  I've helped a number of clients with this kind of problem. Shall we have lunch sometime, the three of us?  I think I can carve out some time next week..."

Or, you can position yourself as a prominent member of the community who would like to meet another prominent community member whom your client knows.  "You know, Ruth, I've always wanted to meet Roxanne.  She's on the symphony board, and I'm on the museum board, and I've always thought it might make sense for our two groups to put on a fundraiser together.  Do you suppose you could introduce us?"

You can even ask clients for help outright, as in William's question above, while preserving honor and professionalism.  Imagine you've just had a new house built by the best contractor in town, and he comes to you and says, "Mr. Smith, I've built houses for some of the top businesspeople in town, but you're the first financial advisor I've worked for, and that's actually a market I've been wanting to cultivate. Can I take you out for a round of golf and lunch and pick your brain about the best way to reach other advisors?" 

That's not a guy who's desperate for clients. That's a successful businessman who is curious to learn about a new market and sees you as the expert.  In fact, don't you feel a bit flattered that he wants your advice?  Wouldn't you be happy to help (assuming of course that you're pleased with his work on your new home)?

But here's the real secret to preserving honor when asking for referrals: you have to position yourself this way in your own mind before you can do it with clients.  Believe it: you ARE a capable professional and an expert who helps others.  You ARE a prominent member of the community who deserves to meet other important people.  Asking for advice and counsel doesn't diminish you or make you look unprofessional--to the contrary, it helps you look smart and open-minded and it makes other people feel good!

If you're finding any of this difficult, it would be a good idea to work on your professional self-image--and a good place to start is to take a step back and look at yourself as your best clients see you (or, if you have no clients yet, as they WILL see you someday).  The "What I Do for my Clients" worksheet in the Automatic Referrals report may help. 

If you still can't honestly see yourself in a positive light when you look through your clients' eyes, you may need to rethink the way you do business.

The ABCs of Automatic Referrals: G is for "Give to Get"

Whether you're trying to establish a relationship with someone you met at a cocktail party or get referrals from your clients, there are a few basic principles you must master in order to be successful. 

Here they are:

1. Give
2. Give
3. Give
4. Give...

Yup, you've got it. The key to success is a mindset of creating abundance for others.  How can you help your clients' friends and family members?  How can you help that accountant or lawyer you just met? How can you help the contractor who just did the remodel on your house, or the funeral home director down the street?

In my last post, I referred to an article by Jeffrey Gitomer in which he listed five and a half principles for making yourself referable. The "half" was a subset of this "give to get" principle: give the OTHER person a referral first.  This doesn't include just CPAs and attorneys you're hoping will refer back to you. You can also do it with your clients. 

There's the one-on-one method: if your client is a professional or business owner, send some business her way.  If he is very active in a non-profit, volunteer some time or offer to do some pro-bono planning work for them.  Help his college-age kid find a summer job or internship.  The list of opportunities to give in this way is as long as your client list.

Or, you can take a broader approach and make yourself a resource where clients know they can always go to find a referral for just about anything.  That's what Dawn Janes does. Dawn is an insurance agent I interviewed for an article on sharing referrals with other professionals (free registration required) a few years back. She has an entire PAGE on her Web site devoted to referrals for her clients, from hair stylists to estate planning attorneys to custom cabinet makers—and yes, financial advisors.  She meets with all of these professionals and vets them before they make it to her Web site.

As it turns out, these referrals have not only won her lots of points with clients—they've also benefited her in terms of bringing in referrals from the other professionals listed on her page. In fact, she notes, "My largest client is a result of networking with a referral resource." 

There's nothing like telling people you'd like to get to know them better and perhaps refer business their way to rev up your networking.

Believe it in your bones: when you give, you get.  Ironically, the less you concern yourself with the getting, the more wealth and success will come your way.  No matter how much you're struggling to get your own business off the ground, focus on lifting others up as you climb.  Let that be the polestar that guides your professional life.

The ABCs of Automatic Referrals: F is for Follow-Up

When the referrals and introductions start flowing, it feels great—like being on top of the world.  But that superhero feeling won’t last if you don’t know what to do with all of those leads.  It doesn't do any good to get referrals if you aren't organized enough to execute on them.   

We've got some extra work to do when we get a referral. In exchange for that nice fuzzy lead, we have to take care of not one, but two people: the referred prospect and the referral source. Fail to follow up properly with the prospect and the entire exercise has been for naught—plus you run a significant risk of damaging your relationship with the referral source. Fail to acknowledge and thank clients for referrals and you not only put those potentially important relationships at risk—you also lower the chances that you'll get additional referrals from those clients in the future. 

The more referrals you're processing, the more you need an automated follow-up process.  Why? Just look at this list of steps that are necessary just for converting a prospect into a client (from Barry Mendelson's article "Break Down Your Business Into 4 Practice Systems for Faster Growth" [free registration required]):

1. Data Collection
   • Prospect/advisor interview(s)
   • Prospect/advisor follow-up call(s)
   • Prospect profiling
   • Document retrieval/checklist
   • Schedule report or findings meeting
2. Information Processing & Case Analysis
   • Investment guidelines
   • Asset allocation decision
   • Estate & tax considerations
   • Work plan development
   • Phone call reminder
3. Report of Findings
   • Document preparation
   • Meeting agenda
   • Findings and proposal presentation
   • Close
4. Implementation
   • Contract preparation
   • New account forms completed
   • Client notebook delivered
   • Quarterly portfolio reviews scheduled

And that's not even considering the steps you need to take to get to that first meeting with a referral prospect... and the additional and parallel follow-up steps that you need to take with the referral source.   Did your client offer you an introduction, but you still need to put your heads together and find a good day for you to treat him and the referral to a round of golf? Did you send a handwritten thank-you note for the introduction?  Does your client expect you to keep him apprised of how things are progressing with the referral?  Did you send him a thank-you gift when the introduction ultimately turned into a new account? 

So, whether you're a solo practitioner or have a team of six, whether you choose to track follow-up on paper worksheets (like the follow-up checklist in Automatic Referrals) or using customized contact management software (free registration required), make sure to include an efficient follow-up system in your referral strategy.

The ABCs of Automatic Referrals: E is for Educate

When you went to buy your last pair of shoes, did you know what you were looking for?

I'll bet you had a decent idea.  Maybe it was a pair of running shoes, or loafers, or a pair of heels to wear to a wedding.  And you probably didn't go into the shoe store and say, "Excuse me, I need shoes. Can you sell me a pair, please?"

You wouldn't do that, because that would make it pretty difficult for the clerk to help you. Sure, he could make an educated guess about what you were looking for based on what you were wearing—but what if you had just come from the office dressed in your Brooks Brothers suit, planning to buy a new pair of running shoes? 

No, a vague approach to shoe-shopping would definitely a recipe for wasted time and general frustration.  Which is why we don't shop for shoes that way.  We at least have an idea what we're looking for, enough so we can get to the right department to browse.  And most of the time, we communicate a pretty specific idea of what we want: "I’d like a pair of Nike running shoes, please," or "I’m looking for brown loafers with no tassels." 

Now we’re talking. The clerk can quickly lead you to the loafers, rather than wasting your time (and his) showing you his entire line of workboots.

The moral of the story: if you want high-quality referrals, you have to educate your clients.  Because they simply don’t know your business like you do.  Don't assume they will extrapolate from their relationship with you, or that they know everything about you and your areas of expertise.  In fact, most clients are as likely to send you a neighbor with a $5,000 IRA as a co-worker with $5,000,000. 

You don't have to settle for referrals that fit you and your practice as badly as cheap shoes.  Help your existing clients understand who your ideal clients are and how you serve those clients. You'll start to get more qualified referrals that fit.

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