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.

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.

Get Yourself a "Networking Buddy"

Public speaking expert Patricia Fripp has this sage advice for getting yourself some good PR at your next event: enlist a co-sales professional, friend, or even a client to form a duo. Attend meetings together, meet people separately, then come back together and introduce each other, like this: 

Suppose Natalie and Fred are secret partners. As Fred walks up, Natalie says to the person she's been talking to,"Jack, I'd like you to meet Fred. Fred has taught me nearly everything I know about sales and our product line. There has never been a sales contest in our company he hasn't won." Then, Fred can say, "Well, Natalie's being very generous. It's true; I've been with our company for sixteen years. But, Natalie's been here for only six months, and she's brought in more new business than any other person in the fifty-three year history of our firm, so she knows a couple of things too. I tell you, you couldn't do better than work with someone as enthusiastic as Natalie."

When you do this, explains Fripp, it lets you say great things about each other that you'd love your prospects to know, but that modesty prevents you from telling them.

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.

Get More Referrals from CPAs

Saw a couple of good tips in Bill Cates' most recent ezine on becoming referable in the eyes of CPAs.  Bill's suggestions:

• Put CPAs through your process. If you don’t have a process to bring value early and often to your new clients, you can pretty much forget about getting referrals from them. You can also put your non-clients through your process. If you do financial planning, put that CPA or other Center of Influence through your planning process—without charging them.

• Become a CPA's "Advisor of Choice." Many don’t care if you give them referrals or compensation. They want to make sure their clients get the best financial advice. First, determine which of your 'A' clients have ongoing working relationships with their CPAs. So that these CPAs see your value, keep them in the loop with the work you are doing. Get written permission from your clients to share summary letters of your meeting with their CPA, as well as any other relevant work you do. Over time, the CPAs will begin to see the value of your work and how you relate to your clients. Soon, many of them will want more of their clients working with you.

Looking for more ideas to help enhance your relationships with CPAs? These articles (free registration required) may help:

How to Win Favor With Your CPA Allies
As April 15 approaches, savvy FAs take the initiative to shower their CPA allies with stress-relieving perks: it will build goodwill and stronger relationships.

Case Study: Quintuple Revenue by Co-Marketing With CPAs
This is the story of an advisor who took his production from zero to $50,000 in three months by cosponsoring teleconferences with CPAs.  Here's how.

Use Surveys to Boost Center-of-Influence Referrals
Client surveys not only strengthen your bonds with clients, they can be used to cement ties with strategic alliance partners. See how sharing survey data and conducting joint surveys with CPAs and estate attorneys can lead to more qualified referrals.

Hosting CE Credit Workshops for CPAs: A Primer
Providing continuing education for CPAs isn't as difficult as you might think. Here are seven guidelines that will get you on track to make it happen—and some insights on why you should consider this approach in the first place.

Why CPAs Distrust You—And What You Can Do About It
Still trying to get your strategic alliance off the ground?  Recognize how a CPA's worldview and work focus can create barriers to working effectively with a financial advisor. Then implement a four-step plan to win trust.

You can find many more articles on Horsesmouth about forming strong strategic relationships with CPAs and other professionals. Just search on the keywords "CPA" and "strategic alliances."

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!

How Can I Get Clients to Refer Up Instead of Down?

L.H., an independent in Montana, emailed last week and asked:

"I get many referrals to lower quality prospects. How can I get 'referred up' rather than'referred down?'"

It's a great question. There are two pieces to the answer.

The best way to get referred to the type of clients you want is to take control of the process: by asking directly for introductions to specific people your clients know, rather than waiting for them to suggest names.  Automatic Referrals teaches a process called "network mapping" that helps you match the types of prospects you want with the people your clients know, and then ask for introductions to those people. 

This is the referral method that the most successful advisors use.  It gives you much more control over your referral flow, and also makes it much easier to make contact with and make a good impression on referred prospects.

However, the reality is that sometimes clients will provide unsolicited referrals, and you want those prospects to be qualified.  The best way to deal with this is to make sure that you are properly educating your clients about your business and the types of clients with whom you work. Don’t assume that clients know your areas of specialty, specialized services you may offer, account minimums, etc.  You can educate them in casual conversations, in marketing materials, in your newsletter, or by discussing it with some standard language during client reviews.   And, to the greatest extent possible, it's good to train clients to check in with you before making a referral.

Here’s one example of how you might phrase this, either in a meeting or in language you include in a client letter or newsletter:

"A number of my valued clients have been kind enough to ask if I am accepting new clients.  I am always grateful for your trust in recommending me to friends and family members.  At present, I am able to take on new clients in two specific areas: business owners who are seeking the opportunity to sell or transfer their business, and corporate executives who are within five years of retiring.  If you have someone in mind who may be looking for this type of financial advice, please call the office. If I am not the most appropriate choice to provide the help they need, I will always try to recommend another advisor who would be suitable."

On a related note, if you are going to turn away underqualified referrals (which is entirely appropriate and necessary from time to time), make it a point to identify one or more other advisors to whom you will feel comfortable referring those referrals—advisors who will appreciate their business, and provide them with quality service.

Avoiding Conflicts of Interest with Friend and Family Referrals

We're continuing to revisit some of the great questions we received during our Referral Clinic and Blogathon.

Today's question comes from Shane, an advisor in Richmond, Va. and will be answered by Michael Brizz, creator of the Referral Mastery System.

Question: "Should you approach the referral process differently if you perceive a conflict of interest for your client? For example, your in-law's family is successful and you work with your in-laws. What is the best way to ask them about their brothers/sisters and not have it feel as though they'd be referring you based solely on your marriage?"

Michael Brizz's answer: Keep in mind that the reason for the referral is to help the referral, NOT you.  Therefore, it is important in your qualification process of the in-laws to learn about them and ways you can help them. 

When you do this, it becomes very easy for your client to refer you because there is a relevant reason for the introduction.  Your client would happily refer the heart surgeon who saved his life to a family member with a heart problem.  Your client will also refer you if there is a relevant reason for the referral.  Rather than try to get referred to many of the in-laws at once, focus on learning a lot about a few—starting with one. 

How to Avoid Sub-Par Referrals from Other Professionals

We're continuing to revisit some of the great questions we received during our Referral Clinic and Blogathon.

Today's question comes from Chris, an advisor in San Diego, and will be answered by Ginita Wall, co-founder of the non-profit Women's Institute for Financial Education and author of eight books, including The ABCs of Divorce for Women. We asked Ginita to respond to this question because she has long experience in co-marketing and collaborating with other professionals to conduct seminars for women who are going through divorce.

Chris' question: "How do you position yourself to ask politely for referrals from another professional (attorney, CPA) so that you are not in the uncomfortable position of turning away non-ideal prospects (i.e. too small, too conservative) that are referred to you?"

Ginita's answer: It’s kind of like training a dog, where you reinforce good behavior, and reprimand bad behavior.

Here’s what I mean—when you get a referral that’s wonderfully appropriate, call the professional and thank them right away. Tell them exactly what there was about the client that fit you to a T, and how specifically you are going to be able to help the new client.  Then you might even send a little gift to the referral source, just to thank them again.

When you get a referral that isn’t appropriate, make sure that you have a list of advisors who work with smaller clients so you can refer them on. Then call your referral source, and tell them, "Thank you for sending the client.  He/she wasn’t quite right for me and I referred them to so and so." Then say, "I am always happy to be a resource to help your clients find what they need, but let me tell you about the type of client that fits my practice, just so you know for the future."

When you are asking for referrals from someone who has referred good clients to you before, begin by thanking them for the old referral, and telling them what a good job you’ve done for the client and how happy the client is. That will reinforce what kind of client you are looking for.

When asking for referrals from someone who has never referred before, tell a story about a perfect referral you got from another similar professional, so that the source can picture what kind of client to refer. You could even add, "Sometimes I get referrals of clients who are not quite right, for example [fill in why they aren’t the type you work with], but I am always able to find someone good for them to work with." That lets the referral source know the standards you set for yourself and that you intend to stick with those standards.

Here's a case study about how an advisor succeeded (free registration required) using Ginita Wall's Second Saturday divorce seminar format—and a discussion board where you can ask Ginita Wall questions about putting together a divorce seminar that gets results.

Building Strategic Referral Relationships with Attorneys--Where to Begin?

Today we're featuring a guest post by Mark Colgan, CFP, president of Colgan Capital in Pittsford, N.Y. Inspired by the challenges he faced as a young widower, Mark authored The Survivor Assistance Handbook and created Plan Your Legacy—an online service that helps individuals organize their affairs and express their final wishes. As a nationally-recognized end-of-life planning pioneer, Mark has considerable experience building strategic relationships with attorneys, and that is the topic of his post today.

Many advisors are interested in building strategic alliances with attorneys, but aren't sure how to begin, or with which attorneys they should seek partnerships in the first place.

Before beginning your search, it is important to identify whom you want to have as a client. Some advisors only want high-net-worth folks, while others are looking for people with specific needs. Once you have established your primary target audience, begin your search for an attorney that has the same interest.

To develop your list, consider the following search methods:

1. Good old yellow pages. Find every attorney in town.
2. Ask other professionals, like the accountants you work with.
3. Ask your clients who they use. Satisfied clients can be a good source of suggestions—but exercise caution. Clients are not always the best judge of a professional's work, especially in complex legal matters. You don't want a bad lawyer with a charming personality.
4. Search legal directories. Martindale-Hubbell publishes the best-known directory of attorneys in the United States. You can search by legal specialty and geographic location.
5. Call your local bar association. Go to the American Bar Association's website and click on your state. A list of lawyer referral sources will pop up. Focus on those referral sources that meet ABA standards. This means that they operate solely in the public interest and do not charge extra for the referral.
6. Check for area of specialization. Martindale-Hubbell identifies four specialties that relate to financial planning: trusts and estates, wills and probate, eldercare, and family law.

After you have created a refined list, call each attorney and invite them for lunch. Tell them that you are looking for a reputable attorney in their area of specialty to whom you can refer clients. When they hear about the opportunity to obtain new business and get a free lunch, chances are they'll want to meet with you.

Once you are sitting across from them, ask questions about whom they enjoy doing business with and why. Showing a genuine interest in them is the best way to develop rapport. At the end of your meeting, you will walk away with a good idea as to whether or not you have common interests and/or the kind of chemistry that will facilitate a mutually beneficial relationship.

Build your professional relationship on a solid foundation. Instead of playing the "one for you, one for me" game, give them a unique reason that they should send clients to you.  For instance, my practice specializes in end-of-life planning. and I commonly work with widows and widowers. I even have a state-of-the-art website dedicated to helping people plan their legacy.  I'm the only financial planner in the community that has this specialization—so when an attorney with whom I have a rapport has a client with parallel needs, I am sure to get the referral.

And when the referral is client-focused, everyone wins.

Read more about forming strategic alliances with attorneys in these Horsesmouth articles (free registration required):

Teaching Attorneys to Prospect for You
Attorneys don't always understand what investment planning really entails. Explain to them the standards of care involved and you may find yourself on the receiving end of some extraordinarily powerful referrals.

How to Build a Robust Centers-of-Influence Network
Your best client has given you the name of her accountant, estate planning attorney, and insurance professional. This is your chance to meet other professionals who care for the needs of the wealthy. After all, you already have common ground—you share a mutual client.

Collaborative Divorce: A New Opportunity for Financial Advisors
Advisors with a strong planning background can become central players in a more civilized divorce process that's gaining popularity. Those who do will also be tapping into an unexpectedly strong referral network.

9 Ways to Connect With Estate Attorneys
Building strong ties with estate-planning lawyers can yield an abundance of high-net-worth referrals. Here's how FAs initiate these key strategic relationships.

Referral Clinic: Bob Cobb on how to get referrals when your book is small

Today we're featuring another advisor question we received during our Blog-a-thon and Referral Clinic in May. This question, from Alison in Middlefield, Connecticut, is answered by Bob Cobb, the President and CEO of sales training and coaching company Ultimate Financial Advisor.

Question: "I am having trouble building my book of business and so do not have a good base of clients to ask referrals of. How can I get referrals when my book is small? I have asked my current clients but they say their friends all have sons in the financial services or they already have advisors, etc."

Bob writes: He who hires himself as an attorney has a fool for a client—and hiring your kid is even worse (that being said, I don’t think my mom would have made a good prospect for you when I was an advisor).  So let’s tackle the "other advisor" problem.  I would expect them to all have advisors (just as almost everyone that buys a car, house, or television already has one). 

You can bypass that by saying, "You know, I can’t remember the last time that I opened an account with someone that didn’t have an advisor."

Here are some steps to start getting referrals regardless of the size of your book:

• Exceed your clients’ expectations at every turn. The happier your client, the greater the likelihood they will refer.  Remember the client's Happiness Ratio: 

Happiness = Reality/Expectations

• Develop a referral mindset.  You and your clients should both think of referring business to you as a benefit of doing business with you, not an obligation.
• Plant the seeds early.  I coach advisors to be talking about referrals in the earliest stages of their story.
• Master your Ultimate Value Proposition. Your clients will never be able to position you better than you position yourself.  When I ask advisors what they do the often stumble and struggle.  It needs to roll off your tongue, and it needs to be in plain English (clients don’t understand "a holistic approach to comprehensive wealth management"—if you are going to say that, you must translate it for them).

Check out these Bob Cobb articles on Horsesmouth (free registration required):

• How to Turn New Clients Into Loyal, Referring Fans in 90 Days 
• Track Your Numbers Like You're Tiger Woods 
• Getting More Client Assets: A 5-Step System That Works 
• Case Study: Quintuple Revenue by Co-Marketing With CPAs

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.

Referrals: Are You Worthy?

Last week I told you about a great marketing article by Robert Middleton on the topic of what we at Horsesmouth call "sales shame" (free registration requred) While reading comments on the article submitted by Robert's readers, I came across one that contains a great teaching point.

A reader named Victoria said that as she read Robert's article,

"I realized that the only times I have disliked and demonized selling have been when I had no confidence in the value of what I was offering. From now on, when I feel reluctance to sell, I will look a lot more closely at what I am offering for sale!"

This is a great point.  When you do a gut check, you may find that you feel great about your knowledge and service and just have negative feelings about asking for referrals... or, you may find that you actually don't feel very good about yourself professionally. 

If that's the case, give the matter some real, honest, objective thought.  Are you selling yourself short?  Are you better than you're giving yourself credit for? Or do you have some bona fide deficits you need to address in your knowledge base, your client service approach, or in some other key area of your practice? 

As Victoria points out, it's very unpleasant to sell when you don't feel good about what you're selling... and as an advisor, that "product" is really you and your services.  If you don't think the product is up to snuff, it's time to make the necessary improvements. 

Give yourself a "product" you can feel proud of, and you'll find that asking for referrals (and prospecting in general) will get a whole lot easier.

Get Over Your Sales Shame to Get More Referrals

If you read this blog regularly, you know by now that I'm a big fan of marketing expert and Horsesmouth contributor Robert Middleton.  His tactical marketing advice is always spot on... but I REALLY like Robert's stuff because he understands so much of the psychology that underlies marketing success and failure. In particular, he is always (albeit gently) riding his readers, pushing them to be more aware of their own negative or fearful attitudes and self-talk. 

One of Robert's recent blog entries, entitled "Ruffling Some Feathers," identifies a problem with which I'm all too familiar—I hear it day in and day out from advisors struggling with referrals.

Robert writes:

...In the past week I lost a few hundred subscribers.

Why? Because I committed the unpardonable sin (in the eyes of some subscribers) of trying to actually sell them something!

When I do a special promotion (which I did two weeks ago), and send out a few follow-up emails, a lot of people unsubscribe. I even get comments from people who are infuriated that I would stoop so low.

"You should just give away free information and then let people decide for themselves if they want to buy something from you." is often the tone of these emails. Or, "If you didn't promote anything in your eZine, we'd like it so much better."

...Inevitably, those who recoil when someone tries to sell them something are, without exception, people who are afraid to sell themselves. Selling is characterized as "beneath their dignity."

We at Horsesmouth call this attitude "sales shame," (free registration required)—and if it doesn't kill your career outright, it will most certainly give you ulcers.

Robert Middleton continues:

You'd think that people who went into business for themselves would be somewhat beyond this view of selling. Of course, many are. They understand that selling is simply an opportunity to share the value they offer to the world.

They realize the upside of sharing this value greatly outweighs any possible rejection they might experience.

Robert has captured the essence of a mindset that is key to transforming your referral marketing. I boil it down to a simple phrase: "Always sell in the service of others."

You may be thinking, "Hey, I already do that.  My clients are always first and foremost in my mind." 

No doubt that's true in the realm of investment recommendations, product sales, and client service. But do you typically think of REFERRALS as being about the client?  Aren't referrals about YOU?  Helping YOU get more clients and assets?  Building YOUR business? 

Actually, no.  And that's the mindset shift I'm talking about.  Referrals (and indeed, prospecting in general) are not about scrounging for new business.  They're about offering your guidance and expertise to the people your clients care about.

We call this a "client-centered mindset." It means that your primary motivation is relieving clients' pain and helping them achieve their dreams.  If you always sell in the service of others—and ask for referrals in that spirit—you'll find that much of your referral anxiety will melt away.  And while that alone won't solve all of your problems, it'll take you a long way.

Some networking essentials

The Street.com recently featured an article from Entrepreneur magazine, "Upgrade Your Networking Mind-Set," that provides a nice, encapsulated reminder of some of the most important networking principles:

• The law of reciprocity or 'givers gain' approach. Don't worry so much about what you're getting out of your networking relationships, at least not early on. Focus exclusively on giving instead. You'll be amazed at the results.
• Network diversity. "Look for groups that don't target people just like you. In this way, you'll broaden the net you seek to cast for referrals." Bust out of your networking rut.
• Farming mentality. "For networking to yield extraordinary success, your mentality must be that of a farmer... It's a long, drawn-out process. There's no quick return."  Networking is a powerful method, but it takes real time, energy, and patience to do it right.

The Entrepreneur article contains a number of other useful tips for making your networking efforts more effective: seek to become visible and credible; understand and articulate your value in a targeted way; and sit down for one-on-ones with people you know superficially to explore possible deeper connections.

And to throw in my own two cents: Do try to think of networking as a process, not an activity.  The farming metaphor really is apt (something of which I'm acutely aware these days, as I'm finally harvesting the tomatoes, beans, and squash from my garden that I spent the last two months tending). You have to find the best location, cultivate the soil, plant the seeds, water and fertilize them, and be patient before any harvest will be possible. 

Don't rush it (why bother with unripe fruit?) and don't expect results too quickly.  Your efforts really will pay off in time.

More on client service expectations and referrals

I wrote last month about how the REAL reason for lost clients (and referrals) is the failure to communicate about clients' service expectations. 

Nicole Coulter has an excellent article on Horsesmouth today about this very topic, and how to deal with this sticky topic.

Nicole writes:

Setting clients' expectations is a process, and one you must begin even while you're prospecting. The process breaks down into two areas of responsibility: (1) profiling new clients; and (2) communicating with existing clients. You've got to do well in both areas to ensure that you and your clients are on the same page throughout the relationship.

Remember, the first step in getting more referrals is keeping your existing clients happy and, ideally, turning them into raving fans.  And setting appropriate expectations is 90% of that battle.

Read the rest of the article to learn how to get started on the right path (free registration required if you're not already a Horsesmouth member):

6 Ways to Manage Clients' Expectations--And Retain Their Business
Follow a systematic process to make sure you consistently deliver what your clients and potential clients expect, not only in the first meeting but throughout the client life cycle. (Plus, see great examples and checklists you start using now.)

Referral Clinic: Bob Cobb on how to get referrals without a track record

The response to our recent Blog-a-thon and Referral Clinic was overwhelming.  We received hundreds of great questions from advisors, most of which we weren't able to answer during the formal event. So, we figured, why not keep on going? 

Today's question comes from Mark, a wirehouse advisor on Cape Cod, in Massachussets, and will be fielded by Bob Cobb, the President and CEO of Ultimate Financial Advisor, a sales training and coaching company dedicated to helping advisors build the practice of their dreams.

Question: "My biggest challenge is that I'm new in the business. One year. Although I am confident in my abilities, when I ask for referrals I constantly run into the road block of people not willing to refer me due to not having enough of a track record. I think they might feel that they may be risking their own reputation."

Bob writes: Mark, I don't know you, obviously, although your market does. If they are telling you that you don't have enough of a track record, that must be something that you are projecting in some way or another. 

The Titans at your firm are not selling "track record" and they are not getting that objection.  Since you can't predict, forecast, or guarantee what results will be, they would not be part of my conversation with prospects or clients.  The best advisors who receive the most referrals convey a sense that they are knowledgeable and will help clients reach their specific goals, dreams, and aspirations. When you are conveying that, track records and length of service are less of a concern to your prospects. 

Editor's note: In addition to taking Bob's advice and looking at what you're projecting, Mark, it might make sense to try a little show and tell. I assume that the people you're asking for referrals are not clients, because if they were, they would presumably have enough faith in you to refer you (unless you're not meeting their expectations, in which case you've got more than just a perception problem). 

If it's other sources you're asking, have you sat down with them, discussed your business and your experience, and even offered to do some work for them gratis to demonstrate your abilities and approach?  That approach worked for Georgia French of Scott & Stringfellow when she was trying to generate more referrals from employees of the bank that owns her firm. She actually invited them to accompany her on appointments and did sample financial plans for them so they could see her work.  Other advisors show their stuff by evaluating potential referral sources' 401(k)s.  You can read more about these approaches in 12 Steps to a New Kind of Referral Business (free registration required).

Do you have a referral or business-development challenge that's got you stuck? Send it to us and we'll do our best to help.

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.

Why a "warmer" call just isn't enough

I just read a great rant about warm calls vs. cold calls by Wendy Weiss, the self-proclaimed Queen of Cold Calling.  Wendy meets a lot of salespeople who mistakenly treat the term "warm call" as synonymous with "easy money." and it bugs her.  She writes:

The idea of a "warm call" is that you've had some prior contact with your prospect and that you have somehow "warmed up" the call. The prior contact might be with a letter sent before your call, it might be that you have encountered the prospect elsewhere. It could be that you have a referral.

All too frequently, callers who use the "I only warm call" approach do not adequately prepare for their calls. Instead, they rely on the appellation "warm." If you are one of these callers, stop right here and ask yourself these questions:

• How many "warm" prospects have said "no" to me over the years?
• Would those calls have been more productive if I had been better prepared and more in control of my message?

Wendy repeats something I alluded to recently in a post about referral follow-up: "Although you may have a referral, that is no guarantee that your prospect will meet with you or have any interest at all in your products or services."  You MUST prepare for your call or meeting with every prospect, regardless of how they came over your transom. 

I do want to clarify one point. Wendy writes: "'Cold call, warm call,' it's simply a state of mind. Your mind. Your prospect does not make those distinctions. Just because you have designated a call to be 'warm' doesn't mean that the person you are calling thinks it's 'warm.'"

While she's right that a referral doesn't guarantee a receptive prospect, we shouldn't ignore the fact that a referral or introduction from the right person can make a big difference in the prospect's mind and give your credibility a tremendous boost.

Nevertheless, even the warmest call can only get you so far.   You still face the ultimate task of selling the prospect on why they need you.

And that brings me to my final point.  When you get a referral, you provide yourself with access to the single most valuable sales tool on earth: information.  Your ability to learn something about prospects before you speak with them is ultimately more valuable than the warmth factor.

Once you've been given a name or the promise of an introductory meeting, start doing your homework.

1. Gather all the information you possibly can about the referred prospect from your referral source (if you've been wearing your detective hat, you'll have some valuable info even before you ask for the introduction).
2. Do your own research based on what you already know. 
3. Prepare a good list of questions that you can ask the prospect relating to what you've learned (don't assume what you've been told by the referral source is correct-you'll want to use the information as a jumping-off point and confirm it directly with the prospect before trying to use it as a selling point).
4. Prepare some benefit statements that tie your expertise, services, products, etc. to the problems or issues you believe the prospect has based on your preliminary information.  Again, confirm these issues directly with the prospect before you start talking about the benefits.

Remember, you are an ADVISOR.  You're a professional problem solver. 

ad·vice   n. Opinion about what could or should be done about a situation or problem; counsel.

The more you know about the prospect's problems and concerns when you initiate contact, the more effectively you can articulate the benefits of working with you and how your capabilities can make a difference in the prospect's life.

Referrals are by no means a sure thing.  What they ARE is an opportunity to prepare more effectively for the same task you face with every prospect: understanding their problems, and then convincing them that you can solve those problems better than anyone else.

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.