Only Fools Rush Into Referral Accounts

Having a referral throw a new account into your lap is hardly ever a bad thing, but jumping into a new relationship helter-skelter can lead to unnecessary problems. Plus, you could miss valuable opportunities for additional referrals.

Jim W., a Canadian advisor, wanted advice on how to handle such a spontaneous, new account. A woman who had been referred to him moved over $250,000 to him, citing the fact that he came “highly recommended” as her reason, and left without so much as bringing up the topic of investments. Additionally, she mentioned that her husband might want to bring his assets over, too, but that he would need convincing.

Wanting to leverage this new client and potential advocate, Jim asked Bob David, Horsesmouth Director of Advisor Programs, “How do I approach the husband and also ask for other referrals from her right away?”

The first thing Jim should be doing, Bob suggests, is to do some digging into what exactly brought the referral into his office. “It’s vital here to get a much better understanding as to why you came so highly recommended in the first place and by whom,” says Bob. “This gives the context which in turn allows you to get client-centric, do some detective work, and create a network map that will lead to the right introductions.”

This understanding of the new client’s motivations is vital, as knowing the problems they came to you to solve will let you offer to help any of their friends in similar situations. In Jim’s case, that includes the husband as well as other potential referrals.

Bob additionally cautioned Jim to slow things down with his new client. When things get rushed, the chance of miscommunication increases and mistakes can be made to tarnish the new relationship. Bob recommends saying something akin to the following:

"I can appreciate the value of your time and that you are in a hurry—my time is valuable also. But you've worked hard to accumulate this money, and I want to do make certain we do what's best. I find it’s mutually beneficial when we take the time in the beginning to be thorough in our planning, so what I suggest is setting a time to come in and do this right....does that sound like a reasonable approach?"

Part of the beauty of referrals is that prospects come to you already confident of your abilities and in most cases pre-qualified. But just because a referred prospect is an easier client to take on, doesn’t mean you should race into the relationship. Doing so could damage the relationship and cut-off the possibility of gaining even more referrals.

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.

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. 

Getting Referrals in An Ugly Market

In a market like this, just heading into the office every morning can feel like climbing Mt. McKinley, so the thought of asking for referrals might seem utterly insane. But veteran advisors will tell you that, in a tough market, opportunities abound for those with the patience to seek them out.  I know advisors who have doubled or even tripled their business during bear markets. 

How do they do it?  First and foremost, they focus on maintaining and strengthening their existing relationships.  In a market like this, you need to treat every client relationship like gold—and protect it like Fort Knox.

If you have one priority right now, it needs to be proactively getting in front of your clients. Call them, e-mail them, send them letters, talk to them in as many ways as possible.

Can it be tough to make those calls when performance is lacking?  Sure. When the market is whipsawing everyone around, it's only natural to get into a siege mentality. Whether you've been in the business for five months or 25 years, the last thing you want to do is to pick up the phone and deal with a whining client. But you have to bite the bullet.

The best way to guard against the ostrich syndrome is to build client calls into your daily action plan—and, ideally, into your business plan (free registration required). If you have something on paper that says you will call your clients every month, you'll do it. Yes, it's true that clients may not be thrilled with their results—but they will be a lot happier than if you didn't call at all. 

Some advisors even take their show on the road in markets like this. I once interviewed an advisor who logged almost 25,000 miles on his car during the last big bear market. He even visited out-of-state clients while on vacation. His family wasn't too happy with him, but he kept those client relationships intact.

What you need to understand is that right now, most of your competition is hiding.  If one theme resonates among successful veteran advisors, it is the tremendous business-building opportunity that exists in difficult markets. There's a ton of business to be won from the walking wounded among your competition. Clients start looking to "change doctors" when things get scary.  And they talk to their friends and family about their fears and concerns.

So be sure to build measurable referral targets into your business plan this year.  Keep your ears open for referral clues. And don't let external events distract you from your plan. To quote business coach and Horsesmouth contributor Joe Lukacs (who has a great weekly business development audiocast, by the way): "It's so easy to sit back and say, 'It's bad; the market's bad.' You absolve yourself of responsibility for your success, you become a victim, and you get a big pity party going. The people who are succeeding refuse to be victimized. They take total responsibility for their world."

Check out these articles on dealing with an uncertain market (free registration required):

10 Rules for Reassuring Clients in Volatile Markets
When markets are volatile, we're more stressed and so are our clients. That's when it's more important than ever to articulate our recommendations and provide reassurance of a positive outcome. Here are 10 rules of effective language.

Calm Edgy Investors by Renewing Their Goals
Market gyrations make for squirmy clients.  Mellow them with some sage guidance.

Cultivate Opportunities in Trying Times
When the going gets tough, the public should be more aware of your services than ever. Here are some ideas on communicating the value of your services during the best and worst of times.

Boost Referrals with Holiday Gifts for Clients

It's that time of year again.  Client satisfaction is the keystone in the foundation of any successful referral strategy and, for many advisors, holiday gifts are an important way to show clients you're thinking about them and build loyalty. 

Horsesmouth's senior editor and client service specialist Ed Klink recently solicited a treasure-trove of creative gift-giving ideas from his advisor "Brain Trust."  Here are some broad categories to consider. 

• Give a book. Inspire the best in your clients by giving an inspiring book. Inscribed with a handwritten note, a book is always a welcome gift.
• Give a treat. Let's face it, you can't beat tasty treats to get you through the long winter months.
  Give something with a "Street" theme. Silver bull and bear wine stoppers from Neiman Marcus. Or for $35 there's the bull and bear tic-tac-toe set.
• Give a charitable donation. This option has been growing in popularity over the years. By the way, this is a neat opportunity to do some referrals detective work and learn more about what your clients care about.  Explain that for the holidays this year, you would like to make a donation in their name to their favorite charity... and ask them to tell you what it is.  But don't leave it there.  Ask them some questions after they name the charity.  How did they get interested in this organization?  What's it all about?  Are they involved beyond being a donor?  You'll be amazed what you'll learn, not only about your client, but about others they know in connection with the charity.
• Give local specialties. One great strategy for holiday giving is to make a point of supporting a business in your town. You can order gift baskets at your local gourmet shop or pick up a few cases of specialty hot sauce from your city's mom-and-pop purveyor. Whatever you choose, a substantial order can be a big boon for a local business owner—and start your relationship off with a solid bond.
• Give wine and related gifts. Some wine sites allow you to add personalized notes—or even your firm's logo—to the labels of the bottles you select.

For details on all of these ideas, check out Ed's article, "Holiday Gift Strategies for Clients," in its entirety (free registration required).  And find even more ideas here:

More Advisor-Approved Holiday Gifts for Clients
Advisors across the country sent in these tried and proven ideas on how to share the holiday cheer with your clients.

Holiday Gifts for Clients: Where to Buy the Best
Don't get caught like a reindeer in the headlights when it comes to shopping for client gifts this holiday season. These innovative ideas will not only please your clients, they just might generate some prospects as well!

Client Gifts: 12 Ways FAs Spread Holiday Cheer
Looking to put smiles on your clients' faces this holiday season?  Here's a sleigh full of creative gift-giving suggestions from advisors who take the opportunity to stand out—without breaking the bank.

Bill Cates with "Nine Tips for Visiting Clients"

Today, we're featuring a guest post from Bill Cates of Referral Coach International. Bill works with financial professionals who want to build their practices by fully mastering the referral process and tapping into the lifetime value of their clients. 

Bill featured this article in his terrific "Referral Minute" e-newsletter.  I liked it so much, I asked his permission to share it with you... and he very generously agreed.  It seems that after Bill ran a piece about 7 simple ways to make in-office visits special for prospects and clients, many of his subscribers wrote to tell him that they couldn't really apply those ideas because they typically leave their offices to visit clients on their own turf. 

So Bill came up with the following list of ways to make those types of visits more special—which he notes is more challenging because you don't have any control over your environment. He also points out that several of these ideas were inspired by his readers.

1. Bring a staff member with you. As you already know, when people connect in person, their phone conversations are usually more cordial and more productive. If you talk about your "team" or "your support back at the office" give your clients a chance to meet them from time to time.

2. Pay attention. What I mean by this is pay attention to what's happening in their personal lives—health issues, children, parents, etc. Make a note to yourself. The next time you visit with them (or talk to them on the phone) ask them about this. "How is your mother doing after her operation?"

3. Bring them a treat to eat. You don't have to have clients come to your office to bring them a treat. I know one advisor whose wife bakes cakes for his clients. While you don't have to put your spouse to work for you, you can stop at a bakery and bring a treat. If they have a sweet tooth, bring something sweet. Maybe you know they like premium coffee. Bring them a bag of premium grounds. Our printing salesperson used to bring us fresh baked cookies. We always welcomed him.

4. Bring them a little gift. I remember early in my relationship with my current advisor, he brought me a Lexus coffee mug. I still use it. Come to think of it, he hasn't brought me anything lately! If your client or prospect has a favorite sports team, bring a little trinket. It's not the expense that impresses them, it's the thoughtfulness. When you find yourself browsing in stores, keep an eye out for little things you can pick up for your clients.

5. Get to them through their children. If your clients have young children, bring a little trinket for them (always have enough and make them safe and age appropriate). Just another way to show you care.

6. Bribe their pets. Many people consider their pets to be a member of the family. Bring a treat for their pet (premium quality only) or a trinket (breed specific) for them.

7. Bring them lunch. Very busy clients will appreciate this one. Make it a really special lunch. Find a high-level deli or nice restaurant with carryout.

8. Make a reminder phone call. Clients always appreciate a confirmation phone call a day or two before the appointment. Sometimes it reminds them and sometimes it reassures them that you haven't forgotten about your meeting.

9. Bring a maid with you. I was talking about this article with my staff and my Marketing Director said, "Bring a maid and have them clean my house while we meet!" While I doubt you would do this, it was too funny - just had to share it. For that matter, bring your 16 year old son and have them wash their car. The possibilities are endless (and quite silly).

Just as I was finishing this issue, I received an email from Marquise White who had some good ideas regarding last week's theme of "wow" office visits—with a fun perspective. I thought I'd pass his message along to you. Thanks, Marquise.

"I loved the most recent list of 'office wows.' It really is about the little things. You'd be surprised how far these simple things go to making the client feel special: $7 water carafe and nice glasses (with some weight to them); a nice service tray; and some real (not paper) napkins. We need to pretend that our clients are our newest love interest and DATE them. Get to know them, like if we wanted to marry them (at least be with them for 10 or 20 years)."

Here are some other ideas (free registration required) for making yourself memorable with clients and prospects:

10 Tips for Distinctive Client Service
Distinctive client service separates you from everyone else who talks about professionalism but doesn't deliver on it. Take action with these 10 tips from a recognized, distinctive financial professional. 

Case Study: How an FA Doubled Revenues by Systematizing Client Service 
After letting client contact slide for years, this veteran made the commitment to more consistent communication—and in the process saw a huge surge in his take-home pay.

Set New Standards for Service, Part 1
Inspire loyalty by developing creative ways of providing top-quality service to your clients.

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.

An Attitude of Gratitude

Believe it or not, there is actually something more important in the followup process than converting referrals into clients. It’s making your referral sources feel glad that they sent some potential business your way.

If you’re a gardener, this analogy will resonate. In the grand scheme of things, it’s neither here nor there if one of your tomato plants doesn’t bear fruit one season—what’s really important is that you keep the soil healthy and fertile so it can produce more plants for you next year. And to do that,
you’ve got to feed it, pamper it, and protect it.

Here’s a surefire process for making sure your referral sources feel appreciated and well cared for. Upon getting a referral:

1. Thank the referral source. Sending a thank-you note (free registration required) is compulsory, even when a referral doesn’t pan out. Do it immediately upon receiving the referral, and handwrite it on nice stationery or a notecard. Promise to keep the source posted on your progress with the person he’s recommended, if you feel comfortable about doing so. Taking time to acknowledge a referral source’s help and express your gratitude is not only common courtesy, it also positions you well for getting more referrals down the road.
2. Act quickly to contact referrals. Whether you prefer lunch meetings, phone calls, e-mails, or regular mail, it is important to make contact with referrals right away, so that you demonstrate respect for your referral source’s willingness to share information with you.
3. Provide updates. Don’t assume that prospects will report back to referral sources that you’ve contacted them (although you should always treat prospects as though that were a certainty). It’s very helpful to keep referral sources—especially current clients—up to date with your progress on the referred lead, whether the news is good, bad, or neutral. When referral sources know you are actually acting on the leads they’ve already given you, they’ll be more likely to give you more.
4. Say thank you again. When you actually sign up a referral as a client, express your gratitude with a nice gift. Choose something appropriate that shows you know the referral source and his or her interests; the more personal, the better.

Studies show that these tokens of appreciation nearly double the rate of repeat referrals—and considering the lifetime value of a new client that you're able to sign up thanks to the generosity of your referral sources, it’s just the right thing to do.

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.

Why Pruning Your Book Can Boost Referral Results

It may seem odd in a blog about referrals, but I'm going to spend a minute telling you why you should considering cutting people OUT of your book, and being choosier about who you accept as a client.

In his post "Grow Your Practice by Asking Clients to Leave" on The Non-Billable Hour blog, Matt Homann discusses a really interesting post on, of all things, a marketing blog for churches.  The gist is that in order to grow in a healthy way, churches not only need to be open to letting parishioners switch to a new church when they're not a good fit, they should actually be proactive about SUGGESTING that they leave.

Take a look and you'll see immediately how this applies to your business.  As Matt says, "Your practice is often far healthier if you stop serving clients you don't want  (and who are often unhappy with your service anyway)."  Not only does "pruning" your book free up more space for GOOD clients and lead to a happier, more fulfilling experience for you, it also leads to higher-quality referrals... because the clients you like are the ones most able to connect you with others just like them.  (This is especially true when you start to get into niche marketing.) 

Start examining your book and your client requirements today, and get on the road to greater efficiency, higher satisfaction for you and your clients, and more quality referrals. These resources can help (free registration required).

Pruning Your Book 101: Get Rid of Dead Wood
Got too many unproductive clients? This primer shows you how to reduce the size of your practice to release energy and increase your satisfaction.

Should You Throw Some Fish Back?
Being selective about the type of client you take on can be difficult, but critical to your continued success. Here's what FAs have to say about screening prospects in this week's advisor e-mailbox.

Give Your Book a Spring Cleaning
If you're a veteran advisor, find out what's lurking at the bottom of your client list. You may discover a gold mine or a junk heap—but at least you won't be in the dark.

How to Set an Account Minimum--And Stick to It
http://www.horsesmouth.com/linkpo/79321_18.htm
Don't wait until you have hundreds of small accounts to establish an asset minimum. Define your ideal client today, provide high-quality service, and achieve success on your own terms.

10 Steps to Resolving Client Complaints, by Bill Cates

1. Today's post comes courtesy of guest blogger Bill Cates.

I believe that you should do everything you can to encourage your clients to complain.

Now, you must think I'm nuts. What I mean is this. Some clients will complain about important things, and a select few will complain about anything and everything. But most clients do NOT complain about the small stuff.  They prefer to let things slide.

The problem with this is that it usually leads to resentment and lost business.  A client with an unexpressed complaint is not going to give you referrals, and they're probably a candidate to move their business somewhere else, sooner or later. That's why you have to create an environment that fosters your clients' candid communication with you.

How you receive complaints is critical.  When a client is registering a complaint with you, the first few words out of your mouth and the first few actions you take can make all the difference. Start off on the wrong foot and things just get worse. Start off on the right foot, and they usually get much easier.

Here are some specific things you can do to ensure you are "receiving" complaints in the best possible way. 

1. Say "I'm sorry." (Be genuine!) Saying "I'm sorry" is not admitting fault. You're sorry they are upset, frustrated, or just unhappy with something you or someone in your firm did. Saying "I'm sorry" is an expression of empathy that begins to diffuse the client's negativity.
2. Honor their perspective (whatever it is). Their view of the situation may be way off base. That doesn't matter, at least not at first. First, you have to treat their position with honor. As you learn more about it, and they feel heard, you can begin to work on changing their perspective (if appropriate).
3. Don't get defensive. I think there is a natural tendency for most people to want to protect themselves when someone complains. Resist this at all costs. Demonstrate you are there for them with statements such as "Tell me more."
4. Don't make excuses or argue. First, you never win an argument with a client. Even if you win the battle, you'll probably lose the war (the client will walk). After you have completely heard the client's position and after you have a solution that pleases the client, you may tell them some of the reasons that contributed to the problem, but doing this too soon in the process will appear as if you are making excuses and not taking responsibility.
5. Fully understand the problem. To demonstrate that you fully understand their complaint, repeat back to them what you think you heard.
6. Tell them what you're going to do next and when you'll be done - if appropriate to the situation. Some complaints have no resolution, your client just needs to be heard.
7. Tell them when you'll call them back. Make a commitment and then honor it. If you can't honor the commitment, call them and let them know you're still working on it.
8. Thank them for bringing the issue to your attention. Especially for the little stuff, you want to thank your clients for not holding back. You want to let them know that you desire communication that is as candid as possible.
9. Resolve the issue as quickly as possible. The faster the resolution, the less the problem will affect the overall relationship.
10. Follow through and follow up until the problem has been resolved and all residual emotions have been cleaned up.

Remember, a relationship that has overcome a problem, handled well, is a stronger relationship than one that has never had any problems at all. 

Here are some helpful articles (free registration required) about client satisfaction and complaints:

How to Handle Angry Clients
Nobody finds it easy to deal with irate clients. But if you learn to handle them adeptly, you can actually use the experience to retain their business and build a stronger relationship.

Why Satisfied Customers Defect
You should be thrilled when 95% of your clients say they are "satisfied" with your service, right?  Wrong.

Should You Apologize to Clients?
Sometimes—but carefully.  The way you say "I'm sorry" can make or break you.

How Strong Are Your Client Relationships?

In the current issue of his "The Trusted Financial Advisor" e-newsletter, Bill Bachrach makes a great point about measuring the strength of your relationships with clients. He writes:

Ask most Financial Professionals if they have good Client relationships, and they say, "Yes, of course." Ask them how they define a good client relationship, and it gets a little fuzzy. Sometimes we describe our Client relationships more by how they feel than by tangible evidence. "We have rapport." "I like them and they like me." "We have been doing business for many years so we must have a good relationship." "They own three products I recommended." Much like a good golf shot is more effectively measured by where the ball lands than by how the shot feels, great Client relationships are better judged by proof than by feelings. If you have ever hit a golf shot that felt really good, but the ball didn't go where you wanted it to go, then you know what I mean.

Bachrach goes on to identify five criteria you can use to determine in a more scientific way just how strong your client relationships really are.  I have reframed these as questions to ask yourself.

1. Do you know where all the money is? Bachrach suggests that if you're still discovering assets months or years into the relationship, the client is sending a message that you need to hear.
2. Does the client do what you advise with little, if any, explanation, and no need to "sell" your advice? When clients listen to you, it's not because they're ignorant or lazy, Bachrach explains: it's because they trust you.
3. Is the client influenced more by you than by other outside sources? Again, Bachrach points out, this is a matter of trust. If CNBC holds more sway over your client's opinion than you do, something's wrong.
4. Does the client understand that you don't control market conditions, interest rates, world economics, etc.? As Bachrach points out, no one enjoys bear markets, but great clients don't blame you for them.
5. Are you getting referrals from the client? If your relationship is strong, you should certainly be getting at least a few unsolicited referrals—and if you're positioning your requests in the right way, you should DEFINITELY be getting introductions and referrals when you ask for them.

Here are some helpful articles about measuring and encouraging client loyalty (free registration required):

Raving Fans: 7 Examples of Intense Client Loyalty
You know you've got loyal clients when they call you on your birthday. Or invite you to sail around the Bahamas. Here are seven stories of true client commitment—and tips for strengthening your clients' devotion.

Ask Your Clients, 'How Am I Doing?'
If you're not sure what your clients think of you, ask them. Here's a step-by-step approach to using a client advisory council to elicit the most useful feedback from your top clients.

How to Turn New Clients Into Loyal, Referring Fans in 90 Days
Are you guilty of neglecting clients once you've won their business? It's tragic how many advisors drop the service ball in the first 90 days. If you don't have a system in place to contact your new clients eight to 10 times in the first three months, you're missing a huge opportunity to build loyalty and earn referrals.

Cement New Client Relationships With a 45-Day Review
A well-trained client is an enjoyable client, so be sure your intake process includes scheduling a 45-day review meeting. Remember, new clients often feel anxious and uncertain with a new advisor. Use this meeting to allay doubt, reinforce value, and hook your client for life.

15 Ways to Inspire Total Client Devotion
You work hard to land new clients. But how do you move them along from the fleeting glow of opening that first account to a deeper loyalty that inspires passion, friendship, and enthusiasm? The answer comes from the faithful employment of three ancient ideas.

The Five-Minute Referral Secret

Here's the shortest great referral idea you'll ever get, courtesy of the Golden Practices blog:

"Find your five favorite clients.  Take them to dinner.  Don’t let them leave until they answer this question:  What can I do to get more clients like you?"

I know an advisor who started using this approach after going through the Automatic Referrals Jumpstart program.  Dennis words it a bit differently, but the idea is the same: "How do I find more of you?" 

He asked one of his favorite clients this question; she was delighted and complimented, and soon thereafter referred him to the man she was dating, who is the executive of a corporation.  Dennis got his accounts.

Now, this gets hard to follow, but next, she referred him to the son of her ex-husband, who is an executive at Microsoft, and his wife. Dennis got that account too.  Then the son's wife introduced him to her parents, who are a very wealthy retired doctor and mathematician.  He got that account too.  When he was telling me this story, he said, "This one million dollar account will be worth $20 million when it's done."

Can you afford NOT to try this great idea?  (Oh, and if you want to take it to the next level, consider a client advisory board (free registration required).

9 Tips for Referral Success In a Choppy Market

A sales manager in Canada called today looking for help talking to his advisors about asking for referrals in a volatile market.

Here is a key rule to remember at times like this: look around you, see what everyone else is doing, and then DON'T do that.

During choppy markets, most advisors have their heads stuck firmly into the sand.  They're hiding. But this is no time to hide. This is the time to INCREASE your visibility and show your clients just how great you really are.

1. First and foremost, make sure YOU are calm.  Reacquaint yourself with what you really believe and what your real value is.  This is a great time to get clear about what you actually do to help clients,  what is special and unique about you, and why a client working with you and your firm is better off in this market than a client working with another advisor, or going it alone.

2. Take proper care of your clients.  Your best referral strategy in a volatile market is to make your existing clients feel cared for and special.  They may not even be feeling especially concerned about the market, but you will make a big impression when they get that call from you saying "I thought you might have some questions or concerns about your portfolio and I wanted to call and put your mind at ease."

Again, remember, most advisors will NOT be proactive in a difficult market.  The referrals will come naturally if you show your clients you care enough and are confident enough to get out in front of the problem.  Just think about how you feel when you can't get a wholesaler to return your calls when his funds are tanking—and how much you appreciate those wholesalers who not only take your call, but who reach out to you proactively when there are performance issues, even if you don't have a ton of money in their funds.  So reach out and call every single client. Even the smaller ones. Even the ones whose portfolios are in the toilet.

3. Be ready to answer clients' questions in as much detail as possible. Be prepared to offer them specific comfort—not platitudes about how the market always goes up again, but details about how THEY are protected from disaster and why THEIR financial future is not crumbling before their eyes.  Put what they're seeing on the news into perspective based on their specific investments and your particular investment approach. 

4. Be a good listener. Sometimes clients just need to vent. This may be their life savings, after all.  Don't be defensive. But once they've vented, be prepared to explain to them how they are protected from the volatility, and focus on the ways that YOUR advice and counsel are contributing to helping safeguard their financial lives.

5. Watch and listen for referral opportunities.  In this environment, clients may mention family members or friends who are having problems, feeling scared, or being neglected by their current advisors. They may mention people they know who have been do-it-yourselfers but are now rethinking that approach, or who are otherwise unhappy with their investment situation.   

Be prepared to jump on those opportunities when they arise by talking about how you might be able to help those people.  "I can understand that your friend is frustrated and nervous that she can't reach her advisor.  If you think it might help, as a favor to you, I would be happy to sit down with her, take a look at her portfolio, and give her my perspective." 

6. Remember YOUR unique value proposition. If you happen to specialize in defensive investing or have special value to offer in a volatile market, be ready to mention that.  And even if you don't, remember that in your client's eyes, YOU are the expert. You have knowledge that you can share.  Offer to share it.  "Wow, it sounds like your mother is feeling very worried.  Would you like to bring her in to chat, and perhaps I can help put her mind at ease?" 

7. Listen for referral cues. During volatile markets, you're likely to hear compliments and recognition of your value from some of your clients.  You can probably guess which clients those will be—they're the ones whose portfolios are doing well, so they're likely to be feeling happy and grateful when you call them to discuss market conditions.  If a client does rave about how well his portfolio is holding up or what a great job you've done protecting her from volatility, be ready to leverage that compliment, because there's no better time to ask for an introduction or referral.  Learn to recognize praise and gratitude as a referral opportunity. 

8. If you have a newsletter or firm literature that offers valuable insights into what's happening in the market right now, you can offer to send it to people your clients know.  To add some urgency, you can mention that you're preparing a mailing right now because you want to get the word out to your existing clients quickly, to allay their concerns, and if they know anyone they think would find the information helpful, you'd be happy to include them in the mailing.

9. Continue using the same network mapping and targeted introduction strategy you've hopefully been using (the one you learned from Automatic Referrals), but in this environment, try to focus your efforts especially on clients who:

• are happy with how their portfolios are doing
• seem to have performance in good perspective
• have made it clear they value you for more than just their performance

Remember, change and uncertainty can be huge drivers of opportunity, as long as you're prepared to harness them.  Referrals happen because your clients recognize your value.  And there is no better time to prove your value than a choppy market!

The Simplest Way to Get Referrals

In the most recent edition of his Referral Minute e-newsletter,  Bill Cates suggests the following "7 Simple Ways To Get More Referrals"—all of which have come from actual advisors who are successful referral-gatherers:

1. Call clients 2-3 weeks before their birthday and offer to take them and a few friends to lunch.
2. Valentines Lunch for women—especially widows, divorced, or single women.
3. Print social cards for retired clients. They no longer have business cards, but could probably use them from time to time. You can put a graphic on it that reflects one of their hobbies.
4. Host fun bi-annual or quarterly events for single clients and their referrals (focus on the fun, not finances).
5. Invite women to "High Tea" at a fancy hotel.
6. Become a Resource Center for your clients. Gather the names of CPAs, attorneys, painters, HVAC, plumbers, handymen (who actually return your call and show up on time), etc.
7. When your client is in your office, have your assistant take their car for a wash. (Bill warns that you should be careful and always go brushless, because "some people are VERY particular about how their car is washed."

These are great ideas, but one caveat.  Most of them (the exceptions being those events where you invite clients to bring their friends) are NOT ways to get more referrals.  They are, in fact, ways to delight your clients. 

You want delighted clients, don't get me wrong.  But I don't want you to fall into that all-too-common trap of thinking that if you just do a good enough job at client service, you'll get all the referrals you could ever want without ever bringing up the topic.

Not true.

The truth is, only a small percentage of clients will refer proactively, even if they think you're the cat's pajamas.  Most people are busy thinking about their own problems and schedules. They're not walking around with you at the top of their minds, waiting to shout your name from the rooftops.  But nearly all of them WILL be more than happy to introduce you to their family and friends... IF YOU ASK.

So first and foremost, YES, delight your clients!  (Here are nine more creative ways to do that... free registration required.) But make sure you also learn to identify great prospects in their networks and ask for introductions.  Because THAT is truly the simplest way to get more referrals.

Have You Earned the Right to Bring Up Referrals?

A big concern that we often hear from advisors is, "I'm afraid that I haven't proven myself enough to my clients to talk about referrals."

I certainly agree that until someone trusts you and believes in you, there is little point trying to position yourself as someone to whom they should refer their family or friends.   However, it's also fair to say that most of your clients would not BE your clients if they didn't feel this way about you.  Many advisors many advisors feel irrationally insecure about where they stand with their clients. This goes back to the whole issue of undervaluing yourself.

If you generally feel secure about your value to clients but have red flags waving about one client in particular, heed them! Hold off trying to get introductions from that client until you've uncovered what's going on, and if your uneasy feelings are justified.  If you have real reason to avoid discussing referrals with that client, you've got bigger problems than referrals—you've got a client at risk, and keeping that client should be your top priority.  Where they are concerned, worry about the referrals later, and focus those efforts on other clients about whom you feel more certain.

However, if you experience these insecure feelings about most or all of your clients, chances are very good the problem is in your own mind—and you need to do something about that.  In addition to doing some referral confidence-builders, another remedy is to start soliciting client feedback more actively.  You can survey your clients, form a client advisory board, or just ask some good questions at meetings and really pay attention to the answers.

When you do solicit client feedback, stay alert for positive comments. They are door-openers for you to discuss referrals.  For example, one advisor who went through the Automatic Referrals Jumpstart Program was conducting a quarterly review with her clients, a married couple who were both medical technologists, and they were marveling at how well their funds had done.  The advisor had been wanting to penetrate this industry and get more medical technologists as clients,  so she jumped on that opportunity and said, 'Do you know a lot of people you work with who maybe don't have this type of portfolio? What about your trade association?' And they said, 'Of course!  We'll send you the roster.'  The advisor got 50-something names and email addresses and phone numbers because she recognized the client's praise and gratitude as a referral opportunity—and because she knew how to ask for referrals in a targeted way.

The articles listed below (free registration required) are just a few of many resources on Horsesmouth that can help you figure out the best approach to getting more feedback from clients—and open more doors for referral conversations.

Survey Your Clients Now!
The benefits of surveying your clients are enormous, and yet less than 1% of advisors have ever sent out a formal questionnaire. Find out exactly what you're missing by not surveying your clients.

Ask Your Clients, 'How Am I Doing?'
If you're not sure what your clients think of you, ask them. Here's a step-by-step approach to using a client advisory council to elicit the most useful feedback from your top clients.

How Well Do You Listen to Your Clients?
Many FAs have no structured method for compiling feedback. Business practice expert Tom Olivo shares strategies for measuring client loyalty and alerts you to its significance for your business.

Referral Clinic: "How Do I Get Around Referral Roadblocks?"

We're continuing to revisit some of the great questions we received during our Referral Clinic and Blogathon.  Today's question will be answered by Katherine Vessenes, JD, CFP®, RFC. Katherine is president of Vestment Advisors and the country's leading authority on building a multimillion-dollar practice.

Question: I have asked existing clients for referrals. One said he has a divorcee friend with $2mm investable dollars. Every time he speaks to her about me, she seems to be traveling. Another client gave my name to friends and they never called. I asked her for their number and she said if they wanted to speak with me they would call. I need ways to get around the roadblocks.  —Stewart, independent advisor, New Mexico

Katherine Vessenes' answer: I think it is time to do what I call the "Country Music" approach to marketing. There is a very popular song by Keith Urban with a chorus that goes: "I am gonna love you like nobody loves you and I will earn your trust building memories of us."  What you want to create for your clients is an experience so powerful that they can't stop themselves from recommending you.

Take these clients and the people they want to refer to you. What do these prospects really enjoy doing? Is it baseball? Opera? Gourmet dinners? Note I did not say what do you enjoy. This is all about the client and creating a great, memorable experience for them-something that other brokers are not doing for them.

Whatever it is that is important to this group, I would call them and give them this speech: "Say Jim—I know how much you enjoy baseball. Well, I got 6 tickets for the big game on (date). I thought this would be a good time for us to have a fun evening and for me to meet Suzy in a non-threatening environment—what do you think? Can you guys come?"  If they are busy, find out a day they are free and then plan an event around that.

Note the key thing here is pull marketing, not push. The night of the big party, you probably don't even mention getting together unless the prospect brings it up.  Once you know them personally, you can either add them to your drip list and invite them to seminars or other events you are doing. Or you could call them in a week or so directly and say you enjoyed meeting them and would like to get together again and see if there is a fit for what you do.  This depends on the prospect and the level of response you are getting from them.

Good luck.

Do You Have a Referral Personality?

In his Referral Minute newsletter a while back, Bill Cates asked this important question: "Do you have a referral personality?" 

By this, Cates explains, he means "Do you behave in a way with your clients that makes them want to refer you?"  He says that many advisors he meets are either too meek or too overbearing—and sadly, they have no idea that they're making a bad impression on their clients.

Cates offers the following checklist of personality traits and behaviors to consider. Since most of us can't judge ourselves objectively on this kind of thing, he suggests running the checklist by some trusted friends and colleagues and letting them rate you (1 is low and 5 is high):

         Trait                                 Rating

1. Positive Attitude
2. Pleasing Tone of Voice
3. Strong Listener
4. Proper Volume of Voice
5. Proper Eye Contact
6. Undistracted
7. Unrushed
8. Client Centered
9. Appropriate Wardrobe

If you discover that you're lacking in any of these areas, check out the Sharpen Skills area on Horsesmouth, where you'll find lots of useful resources to help you improve.  For example (free registration required):

9 Ways to Stop Rudeness From Hurting Your Business

Suit Up! Classic Business Attire Is Back

Energize Your Speaking Style

Advisor question: How do I handle performance-based objections?

Today, the answer to another question submitted during our Morningstar Advisor webinar "How to Trigger Natural Client Referrals by Conquering Referral Anxiety" (replay available here).  This one comes from J., an advisor with Charles Schwab:

I have been asking for referrals and the clients say, "Okay, I will think about and it and get back to you after seeing the portfolio performance."  So what does that  mean?

Well, to me it means a couple of things. First is that you're asking the wrong clients for referrals, and/or asking at the wrong time.  Second, you may want to rethink your value proposition and how you are positioning yourself in the minds of your clients and prospects.

These particular clients have not yet decided that you are referable.  Either they haven't been working with you long enough, or for whatever reason, they are not yet convinced that you are bringing them the kind of value they expect. And you will never get high-quality referrals from people who don't have full faith in you.

Learn to listen for statements indicating that clients recognize your value and how much you're doing to improve their lives, and use those statements as indicators that it's time for a referral conversation.  For example, one advisor who's had great success with our Jumpstart Program told us this story about a couple she works with:

"They had been clients quite a few years, and they were marveling at how their funds had done. They have almost a seven-figure portfolio at this point.  So I said, 'Do you know a lot of people you work with who maybe don't have this type of a portfolio?  What about your trade association?' And they said, 'Of course! We'll send you the roster!' and all of a sudden I get 50-some names and email addresses and phone numbers."

Notice that she positioned her request in response to specific value-recognition comments made by the clients.

If you're not hearing any of those types of comments, ask yourself if you're engaging in enough conversations about their expectations and your service. Try asking more questions, such as "What have you found most valuable thus far in our working relationship?"  Make sure you're conducting a sufficient number of reviews with your best clients, because quarterly and annual reviews (especially when performance has been good) are terrific places to have conversations that lead to confirmation of value—thus providing a great opportunity to ask for a referral or introduction.

It also sounds as though, in these clients' minds, your value equals their portfolio performance.  Performance matters, of course, but if that's the only thing they're thinking about, something is missing. You're trusting your professional fate to the ups and downs of the market—and even if you're consistently able to achieve fabulous performance, you're limiting your ability to differentiate yourself from the competition.  What if another advisor comes along who can point to good performance? What will stop your clients from defecting? 

Job #1 for you is figuring out what is special or unique about you?  Step back and invest some time and energy in your value proposition, your branding, and your client service and communication strategy. When those pieces come together, referral conversations will flow more naturally, and I suspect you'll start to find that your other marketing and prospecting strategies get easier too.

If you need help, Horsesmouth is loaded with resources on these and related topics. For example (free registration required):

The 'Everyday Advisor' vs. the 'Branded Advisor'
When you follow the three key elements of a disciplined branding system, you'll absolutely clobber the competition. The reason: A focused, concentrated effort shows people who you are, what you stand for, and why it matters. Compare that to the "everyday advisor" and see the difference for yourself.

6 Ways Value Statements Boost Business
A value statement is not just a catchy marketing slogan—it's a tool that enables you to set more meetings, close more sales, and make clients tell their friends you're the best FA they've ever had.

A 6-Step Client Service Strategy That Works
A Horsesmouth member called recently and said he needed to create a systematic client service strategy—fast! We said we could help. Here's the action plan.

Advisor question: How do I make my referral thank-yous memorable?

During our recent webinar on Morningstar Advisor, "How to Trigger Natural Client Referrals by Conquering Referral Anxiety" (replay available here), my colleague Sean Bailey and I were unable to answer a number of questions submitted by the advisors in attendance due to time constraints.  So I'll be answering those questions here on the Automatic Referrals blog.

This one is from Linda T.: "When I receive a referral, I send the client a thank you after I have met with that referral.  Are there any ideas you have for how to make that thank you memorable to ensure I get more referrals?"

Linda, it's great that you're aware of how important it is to say thanks for referrals.  Not only is it basic manners, but it really works.  At a bare minimum, you should be sending a handwritten thank-you note on fine stationery—but many advisors do find that a small but memorable thank-you gift can have a very positive impact. (In fact, I just spoke with the head of a brokerage firm last week who told me the firm has actually begun sending referral thank-you gifts (in the advisor's name) such as barbecue tools and MP3 players, and that while he initially thought the idea was "kind of cheesy," the clients are loving it and the referrals are flowing.)

We actually addressed this question on the blog a couple of months ago, during our Blog-a-thon and referral clinic, with the help of successful and very creative independent advisor Jay Eshbach. Check out his post, "How to Provide a 'WOW' Factor to Thank People for Referrals."

The one thing I would add, Linda—and this is my golden rule for all gifts all the time—is to try to take each client's tastes into account.  Yes, you can offer the same cool thing to everyone, and they'll appreciate it... but they'll appreciate your gift more, and feel even more special, if it reflects an understanding of who they are and what they care about.  That takes more effort, of course.  But if you've received an account worth thousands or tens of thousands of dollars to your bottom line thanks to a client's generosity, isn't it worth a little extra work and thought?

If you're drawing a blank, here are a couple of articles (free registration required) full of innovative ideas for creative personalized gifts:

20+ Ways to Build Client Relationships With Gifts
Why wait for the holidays to let your best clients know you're thinking of them? Here are more than 20 ideas on how to strengthen ties through gift giving year-round.

Holiday Gifts for Clients: Where to Buy the Best
Don't get caught like a reindeer in the headlights when it comes to shopping for client gifts this holiday season. These innovative ideas will not only please your clients, they just might generate some prospects as well!