Asking for Referrals: Overcoming 3 Fears

It’s an oft-repeated axiom that that the hardest part about completing a task is starting it. This is certainly true about asking for referrals, and often what gets in the way is plain old fear. Horsesmouth contributor and president of Referral Coach International, Bill Cates, has identified three common fears that keep advisors from asking for referrals and given solutions:

1. Fear of appearing pushy. Almost all advisors out there will tell you they don't want to appear pushy or hurt their relationships by asking for referrals (there are some "old-school" agents who haven't learned better yet). I certainly understand this concern. But here's the good news: To move through this fear, all you have to do is find a way to engage your clients in a referral conversation that is not pushy—and will not hurt a relationship.

Don't assume they are willing to talk referrals; your first move is to get their buy-in to the referral conversation. Confidently ask for permission to talk about introductions. Give clients the opportunity to say no. Don't back people into a corner. At all times, let them feel in control of the conversation.

2. Fear of begging. Many advisors don't want to look unsuccessful or needy with their clients, but all you have to do is find a way to engage your clients in a referral conversation that doesn't come from a needy place. Instead, come from a place of confidence, success, and value.

Stay away from the old style of making referrals be all about you: "I get paid in referrals." "I'm trying to build my business and I really need your help. Please! Please!" Make your referral conversation about the value clients have recognized in their work with you—and sharing it with others. Get in the habit of always checking in with your clients to make sure they see the value in your processes and in your relationship. (This is usually best done in person, but it can be done over the phone if part of a scheduled phone appointment.) Focus on the importance of the work that you do and bringing that important work to others.

3. Fear of hearing "No." Successful, confident, and even cocky advisors can turn into a bowl of Jell-O when they face the prospect of a client turning them down in their request for introductions to others. Many advisors can dial for dollars until the cows come home, yet they are afraid a client may not want to give them referrals.

How do you deal with this fear? Just get over it! First, you are only going to ask clients who have seen value in your work and like you. Second, assuming they find the previous point is true, if a client doesn't want to give you referrals, it has nothing to do with you. It's their fear. It's their baggage from past experience. Just practice the "Zen of referrals." Ask for referrals without being attached to whether your clients say yes. Focus on your actions, not the results of your actions. Control what you can control. You can't control whether a client wants to play the referral game with you, but you can control moving through your fear and asking.

If these fears hit close to home, make sure to read the full article, "Asking for Referrals: Overcoming 3 Fears," (free registration required) to gain additional insight into defeating them.

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.

"Burn the Boats" to Achieve Referral Success

I recently saw a blog post by John Jantsch of Duct Tape Marketing that takes one minute to read, but can literally transform your business and even your life.

Here's the core of it (click here to read the rest):

Sometimes knowing and doing have a hard time intersecting. I learned years ago one of the best ways to get something done is to give myself no choice.

There is a fable that tells about a captain coming ashore to conquer a new land and finding his forces outnumbered 10-1. Seeing this a sergeant asked what they should do, to which the captain replied, "burn the boats."

For example, he says, if you want to do more public speaking, get yourself booked for a speech.  If you want to get in shape, enter an upcoming 10K.

So what are some referral-related "boats" you can burn?  Here are a few ideas:

• Schedule a referral event and start getting the invitations ready.
• Book an evening at an exclusive restaurant for a client advisory board meeting.  Then, you can actually set up the client advisory board (free registration required)!
• Make 5 lunch reservations for two over the next 30 days.  Now find top clients to fill those slots, and then figure out who they know so you can ask for introductions over lunch.
• Really want to challenge yourself?  Make those reservations for three. Now you need to ask the clients to invite the people you want to meet.
• Get up from your desk right now, walk into your branch manager's office, and tell him or her that you are going to commit to getting at least 2 referrals per month, starting this month. (Don't have a manager? Call a mentor or close friend whose opinion of you matters, and commit to that person.)
• Book a lovely vacation for yourself and your spouse for a year from now, with a nonrefundable deposit. This will be your reward for meeting your referral goals and increasing your production.  If you don't meet the goals, you're going to eat the deposit!

As Jantsch writes, it's funny how your priorities can change when you have no choice. Stop choosing NOT to get referrals. Instead, choose success—even if you have to force it on yourself.

The ABCs of Automatic Referrals: J is for Jumpstart

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

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

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

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

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

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

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

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

'Nuff said.

The 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.

Conquer Your Self-Limiting Thoughts and Get More Referrals in 2007

I have heard only a handful of speeches in the course of my life that actually transformed me in some lasting way. Six years ago, I heard one of those speeches. I was attending a performance improvement conference in San Francisco where the featured speaker was Debra Benton, author of a variety of books including How to Think Like a CEO and How to Act Like a CEO. Benton has studied and interviewed hundreds of chief executives and found that they share a number of key traits.  She addressed one specifically in her keynote that I found profoundly important.

If you want to think and act like a CEO, Benton explained, look around you, see what everyone else is doing, and then DON'T do that.  Do the opposite.

She illustrated this principle in a very immediate way that I was fortunate enough to experience firsthand. At the end of the keynote, she held up a copy of her latest book, and said, "This book is for someone in this audience.  I'm waiting." 

All of the 1,000-plus people in the room just sat there for a moment, looking around with confused expressions, waiting for something to happen.  After about 20 seconds, a few people somewhat tentatively raised their hands.  Benton smiled and said, "That's not it." Then one or two folks stood up and waved at the podium.  Benton just stood there, still holding the book, and shook her head.

That's when the light bulb went off in my head. I looked around at everyone else to see what they were doing.   What they were doing was sitting, doing nothing, waiting.  So I applied the lesson I had just learned in the keynote. I did the opposite. I stood up, squeezed past the row of other attendees and made my way to the aisle. Then I walked up to the podium with my hand outstretched toward Ms. Benton and the book. 

Out of a room of 1,000 people, I was the only one to take that risk—the risk that I might make a fool of myself.  And guess who went home with the book?

I have carried that experience and that lesson with me to this day.  I tell you about it now because I was reminded of it by Robert Middleton's More Clients blog entry today, "Two Huge Things." The bottom line of Robert's post: go into the new year with big intentions—and strip yourself of the mental limitations that are holding you back.  He writes:

"What beliefs are you addicted to that are holding you back from realizing your intentions? As long as you remain attached to them, they will shape your current reality as they always have.

• Are they about how much money you can earn?
• Are they about how successful you can be?
• Are they about your capability as a marketer?
• Are they about the difference you can ultimately make?

And what if those beliefs weren't really true at all? Take a few minutes to seriously question them."

That day six years ago in a San Francisco hotel ballroom , as I walked up to that podium to claim my prize, I realized how powerful self-imposed limitations can be, and simultaneously how easy it can be to jettison them—and what you can accomplish if you do.  How many conversations have I failed to initiate; how many opportunities have I failed to leverage; how many ideas have I failed to try in my life... all because of self-limiting thoughts?  How many referrals have you NOT gotten because of YOUR self-limiting thoughts?

You want more referrals, or you would not be reading these words today.  The new year is here.  Now is your chance. Resolve to map out your intentions—and more importantly, become aware of your own limiting beliefs, and work consciously against them.

There is a Dale Carnegie quote that I always use to close my presentations on conquering referral anxiety:

Inaction breeds doubt and fear. Action breeds confidence and courage. If you want to conquer fear, do not sit home and think about it. Go out and get busy.

Read Robert's post. Read the articles below (free registration required).  Then make 2007 a truly transformative year in your business and your life. 

Happy New Year!

How to Wipe Out Self-Limiting Thinking in 5 Steps
Your greatest barrier to success is not the market or your competition. It's your own mind. Find out today how to recognize and overcome self-limiting thoughts that prevent you from reaching your full potential.

Your Productivity Starts With Positive Thinking
Try these strategies for controlling negative thoughts and outbursts during difficult situations. You'll find yourself happier, more productive, and better able to maintain good relationships.

Turn Around Your Negative Thinking in 3 Steps
Your future success depends on your ability to meet adversity with renewed energy and optimism. Remember, your thoughts influence your feelings and actions. Follow this method for staying upbeat in the face of rejection.

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.

The referral opportunity - what you risk when you don't ask

Marketing expert and Horsesmouth contributor Robert Middleton had a characteristically wonderful post on his blog last week, the last in his series of 10 dumb marketing mistakes. "I've left the dumbest for last," he writes: "'Not Risking.'"

Robert recommends making a list of things you're not doing but would likely profit from if you got around to doing them.

Then, he writes, "Subject each item on your list to the following questions:

1. Is this something that would truly benefit me if I learned it or put it into action?

2. What are some of the possible benefits I might gain if I learned or did this thing?

3. What could I potentially loose if I didn't learn this thing or do this thing?

4. What's the worst that could happen if I took a risk and learned this thing or did this thing?

When you ask these four questions of every item on your list, you'll have reframed your risk. What used to look risky might not look so risky anymore. In fact, it might actually start looking like a great idea to learn or do this thing."

As Yogi Berra said, when it comes to marketing, "90% of this game is half mental."  The point of Robert's piece is that we often give up more potential opportunity by failing to take risks than we save ourselves. 

As an advisor, you're probably quite familiar with this idea.  You most likely have at least a few clients who used to keep most of their cash under a mattress, until you talked them out of it, because they were too scared of losing it by investing.  What they failed to comprehend was that NOT investing actually represents a greater risk over time (given a long enough time horizon, of course) than investing is.

You probably have other clients who weren't necessarily afraid to invest—they just couldn't seem to get organized enough to get their financial acts together.  Again, a lost opportunity that carries significant risk.

The same is true of referrals.  If you're not asking because you're too afraid of looking bad or offending clients—or because you just haven't taken the time to get around to creating a systematic referral process that works for you—you're taking a lot more risk than you may realize.

The truth is, the risk of asking for referrals is actually almost negligible when you do it correctly and systematically.  So don't let misplaced fear or disorganization cheat you of great opportunity.  Start getting your referral act together today!

Don't let self-limiting thoughts wreck your referrals

Gail, a regional advisor from Texas, wrote in to tell us that even after 20 years in the business and despite being a big producer, she still finds that asking for referrals is her greatest business development challenge.  She says she's concerned that "my clients will wonder why I'm asking at this point in my career."

We all worry from time to time (some of us more often than others) that people are thinking negatively or critically about us.  And certainly, it's good to be aware of how others might perceive us, to ensure that we don't do anything truly foolish or destructive.  But most of the time, we're projecting critical thoughts onto others, thoughts that are exaggerated or just plain fiction.  And those thoughts hold us back in unhealthy ways.

This is a common problem with advisors where referrals are concerned, and it's the problem Gail is having. She's got this idea that there's something inappropriate about a successful advisor needing to generate new business, and she's projecting that idea onto her clients.  It's problematic enough that the idea itself is flawed... but attributing it to clients makes it doubly dangerous.

Whenever we make an assumption about what other people are thinking or feeling, we should stop and examine it objectively.  (You'll find this works especially well with spouses!) Often, when we expose our assumptions to air and light, we're able to see their weaknesses and strip them of their power. 

So let's examine Gail's assumption.  Think of some high-end, successful industry icons.  Bill Gates and Microsoft, perhaps. Saks Fifth Avenue.  Mercedes.   When you see an ad for one of their products or services, do you think to yourself, "Wow, I can't believe they're still trying to get new customers?! I mean, they're so successful, and they've been around for so long..."

Of course not. 

Or let's look at it another way.  Do you assume your attorney or your accountant will never need another client again? Or if you needed back surgery and called the office of the most brilliant and sought-after orthopedic surgeon in your state to get a consultation, would you expect the receptionist to tell you to take a hike because the doctor is just too successful to take on any new patients? 

You see where I'm going here.  99.9% of clients are neither surprised nor concerned that their advisor is interested in or willing to accept new clients.  Most clients probably don't give much thought to their advisor's other client relationships or business development situation at all. Why should they? It's not their job, just as it isn't your job to wonder whether your dentist's practice is thriving or not.  But to the extent that they do give it any thought, your desire to take on new clients has no bearing whatsoever on your quality or professionalism. 

In fact, if you ask the right way, you can actually reinforce your exclusivity and make your clients feel like members of a small and elite club.  This is a secondary issue for Gail, who says, "I especially want to emphasize that I'm only looking for million-plus dollar accounts without sounding snobby."  She can play that up in the way she phrases her referral discussions.

If Gail uses network mapping to pre-identify prospects or prospect types in her clients' circles who are likely to be qualified to do business with her, she can ask for introductions to those people in a way that reinforces just how successful she is.  "John, I know you're on the board of the Houston Advertising Federation. I believe Kim Phillips is also on the board?  She's one of a select group of ad execs in the area whom I've been focused on meeting over the past few years. What would you think about the three of us having lunch sometime next month, on me?" 

Can you see how this kind of exchange would actually reinforce both John's and Gail's importance and elite standing?

Don't let self-limiting thinking (free registration required) dampen your success. Anytime you find yourself concerned that something you do or say has made or is going to make a bad impression on others, stop. Recognize that you've made an assumption. Examine it.  Maybe it's valid—but more likely, you'll find that it's both without merit and counterproductive. 

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.

How to Defeat Referral Reluctance and Change Your Outlook

Welcome to the last day of our Referral Clinic and Blog-a-thon!  It's been a great few weeks, and we're grateful to the hundreds of advisors who submitted questions. We will continue to feature new questions and answers in this space on a regular basis. In the meantime, you can revisit the Clinic questions and answers or read posts you missed by clicking on the "Referral Clinic" link on the right, under "Categories."

Today's winning question comes from Jerry R., an RIA in North Charleston, South Carolina.  Congratulations, Jerry!

Jerry's question will be answered by yours truly, Miriam Lawrence, resident referral expert at Horsesmouth and author of the Automatic Referrals blog.

Question: "I don't ever ask for referrals. I spend a lot of time trying to build a relationship with my clients but I stop short because I am afraid I will end up sounding like a salesperson (not that there's anything wrong with that) What advice can you give me to change my outlook on referrals in general?"

Answer: Jerry, you're in very good company. Many advisors never ask for referrals because of some degree of fear-ranging from vague discomfort to something approximating utter terror.  And typically they describe their feelings with words like "pushy," "greedy," and "salesy."

What's going on here?

One factor is that advisors often think their relationships with clients are much more fragile than they actually are.  Many also have negative associations around selling or prospecting. They think, sometimes on a subconscious level, that any overt business-building activity is selfish and bad.  (Our nickname for this at Horsesmouth is sales shame [free registration required].)   And they project those negative feelings onto their prospects and clients. So it's not that the client perceives the referral conversation as negative—it's that the ADVISOR perceives it that way, and projects those feelings onto the client. 

If any of these descriptions sound familiar, try this exercise to help you see yourself (and your value) from your clients' perspective and get past your fear.

There's an additional angle to consider.  Based on how you worded the question, you're primarily feeling uncomfortable about asking for referrals because you're framing them as a way to help YOU. 

And that's an entirely appropriate concern.  Ethical professionals understand that clients aren't there to serve US.  We're there to serve THEM.

But what most advisors fail to realize, because they're so wrapped up in their own concerns about building their business, is that offering to work with people their clients know IS another way to serve their clients. 

Most referrals happen not because clients are trying to help their advisors, but because they're trying to help the people they care about.  Sure, a referral will help you too, but that's secondary.  When the newly divorced client you helped get back on her feet recommends you to her friend whose husband just ran off with the babysitter, she's not doing it to make your bank account bigger; she's doing it to help her friend.   

So, in fact, a referral is an opportunity for you to help a new client—and, by extension, the person who referred you.  If you truly internalize your own value (there's a worksheet in the Automatic Referrals report designed to help with this, by the way), you'll be much more able to comprehend this truth.  It's a big paradigm shift for many advisors-and it's also critical to your success.

So, instead of thinking of yourself as scrounging for new clients, realize that when you ask for a referral, you're offering your guidance and expertise to the people your clients care about. Refocus your energies and start thinking of referrals as enhancing your clients' lives and the lives of the people they know.

If you're not there yet, don't worry—it takes time to get to this state of mind when you're used to thinking of asking for referrals as a self-centered, "salesy" activity.  But the more you ask for referrals from that client-centered place, and the more you find that you're not suffering any of the terrible consequences you were afraid of, the more confident you'll start to feel in your value and in the strength of your relationships with clients.

Good luck!

Got questions or thoughts about today's challenge or the response? Post a comment.

Asking Top Clients for Referrals—How Not to Appear Desperate

Welcome to Day 5 of our Referral Clinic and Blog-a-thon.  We asked advisors to send us their toughest referral challenges. Now we're featuring the best, along with solutions from top referral experts and veteran financial advisors. 

Today's winning question was submitted by Lynette B., who's with a wirehouse in Dublin, OH.  Congrats, Lynette!

Lynette's question will be answered by Dan Finley, President of Advisor Solutions, Inc. a business development consulting and coaching service for financial advisors.  Dan was a successful financial advisor for thirteen years before founding Advisor Solutions, Inc. 

Question: "I have done such a good job of packaging myself as an advisor to the elite that I have trouble now asking the chosen I work with for referrals without sounding like I am not who I purport to be. How does one elicit their help and ask them to help add onto my practice without looking as if I am needy or not as successful as I portray?"

Dan Finley's answer: Asking your elite clients for referrals when done properly can create a very powerful, positive image.  But setting the stage for a very successful referral campaign with your elite clientele needs a well thought out plan complete with the type of content that elite clients can relate to.

First, you have already successfully completed the very first step, which is to convey the message that you are an advisor to the elite. You are not willing to work with just anyone. Your niche is to help the elite with their complex financial challenges.

Second, you need to take the message to the next level by explaining to them that you are not growing your business in the traditional sense; meaning by adding just anyone—even people who may be considered elite clientele—because you only have so much time in the day to devote to your current client base, who are people that you like.

Third, you need to convey the message that you always have time to help your clients' friends, family and colleagues. In fact, you prefer to work with people who have a relationship with your clients.

Fourth, you need to structure the message that giving you referrals is not about helping you get another client, but rather about helping your clients help someone else.

Fifth, you need to dig deep inside and have a genuine belief system that your mission is to help your clients help others. This may or may not produce financial results for you in the short run, but it will definitely produce incredible monetary and non-monetary results in the long run.

In the right dialogue, this conveys a very powerful message that you are not needy at all, but rather very successful and again are only willing to help those whom your clients want to help.

Let me illustrate a very brief dialogue:

Client: How's business?

Advisor: Great! In fact, I've been so busy that I have decided not to take any additional clients unless they are friends, family or colleagues of my clients, people that my clients want to help.

Client: What do you mean by, “want to help”?

Advisor: Well, how have I helped you the most since we have started working together?

Client: You have helped me reduce my taxes, consolidate my investments, and make sure my estate planning is in order.

Advisor: Who do you believe needs your help the most by getting that level of service?

This is a brief dialogue that powerfully expresses the messages that you have a successful business, you are busy, you have brought value to your client and you want to help those whom your client wants to help. There is nothing needy or desperate about it.

Since you have already positioned yourself as the advisor to the elite, your clients will refer you to someone whom they want to help that will naturally fit your elite clientele. Remember, most affluent investors feel most comfortable speaking with a financial advisor to whom they have been referred.

Got questions or thoughts about today's challenge or Dan's response? Post a comment.

The ABCs of Automatic Referrals: D is for Damage Threshold

What worries you about asking for referrals?

If you're like many other advisors, you're afraid you'll offend and alienate clients by asking.  In fact, though, that fear is completely unfounded—assuming you ask in the right way.

The problem is that advisors often view their client relationships as much more fragile than they really are. Daryl Logullo calls this line the "damage threshold"—the line you can't cross without harming the client's perception of you.

Is there really such a line?  Sure.  And if you took your client out to dinner, got drunk, and danced the Can-Can on the tabletop, you might cross it.  The line exists... but it's probably a lot farther away than you may think.

Advisors often operate as if the damage threshold for every client relationship were zero. Even when they're dealing with a long-time business associate or a client of 20 years, they actually think that the relationship is so fragile that a simple request for a referral or introduction might blow it to bits. A great analogy is the anorexic who looks in the mirror and sees a fat person instead of someone who is skeletally thin. There’s a skewed perception of reality going on here that is very destructive.

If you're deathly afraid of offending your clients by asking for referrals, there are a few remedies at your disposal.

1. Take an objective look at the evidence, which will show you that your fears are irrational.
2. Become more aware of your own value, so you feel more confident in the resiliency of your client relationships.
3. Learn to think about referrals as a way to help clients, not you.
4. Make sure you know how NOT to ask for referrals, and build confidence in your ability to do it gracefully and effectively.

Don't let imaginary barriers stand between you and success.  Get past the damage threshold.

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More on comprehending your value

Last week we talked about adopting a client-centered mindset toward asking for referrals.  I said the key to that mindset is recognizing that you offer people valuable knowledge and expertise, and focusing your referral efforts on sharing those gifts with OTHERS, rather than on helping yourself.

This is a difficult paradigm shift for many advisors. In this new paradigm, you're focused on enhancing your client's life and the lives of people they know. But if you're like many advisors, you are so immersed in your own need to generate business that you tend to forget that your clients perceive you as someone who does, in fact, enhance their lives.

To comprehend the client-centered mindset, you've got to be able to think like your clients, and see yourself through their eyes. Your clients see you as someone who brings value to the table. That means you've got to recognize that value too. But this is something advisors often have trouble doing.

So today I'm going to suggest an exercise that may help shift your thinking. I want you to close your eyes and think of a trusted professional in your life—someone who has contributed to your life in some way and counts YOU as a loyal client. This could be an attorney, an accountant, an architect or real estate agent, a doctor—any professional whose services you truly value.

Take a moment and think about this person. Visualize the role they play in your life. If they've done something tangible for you (like built a house or healed your child), picture that. Think about how they've helped you or your family, and how their help has made a difference in your life. Really feel that relationship and their value to you.

Now, imagine that this person has just asked you to introduce them or recommend them to a specific person you know—someone they could help in the same way they’ve helped you.

For example, imagine that your cardiologist (who saved your life with open heart surgery) remembers that you mentioned your mother was having heart trouble, and asks if she might be open to a second opinion. Or your accountant (who saved you $20,000 on your taxes last year) says he recalls you play golf with the owner of a certain small company every Tuesday and asks if he might join the two of you in a round, on him?

Pay attention to how you feel about this request from this special professional in your life. Are you angry or offended? Do you feel they were out of line?  Are you likely to say yes to their request? How do you feel as you think about this scenario?

For most advisors, a light bulb goes off when they go through this mental exercise. Suddenly, they see THEMSELVES as that essential, valued professional their clients see.

Try it. It may transform how you think about referrals—and your relationships with your clients.

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The ABCs of Automatic Referrals: C is for Client-Centered Mindset

Do you feel like the Cowardly Lion every time you think about referrals?  Does the mere thought of asking make you feel uncomfortable ?  If it does, chances are you think that referrals are about YOU and building your business.

Ironically, not only does that mindset make many advisors reluctant to ask for referrals, it also makes the requests less effective. That's why one of the first keys to referral success is adopting a client-centered mindset.

What does that mean?

When you adopt a client-centered mindset, you begin to recognize that referrals are not all about YOU. In fact, a referral is an opportunity for you to help someone ELSE—a new client—as well as the person who referred you.

Here's an example, a true story we heard from Laura, an independent CFP. One of her clients mentioned in passing that he had a friend who was sick and had to go on disability. A week later, Laura was meeting with the client, and because she’d read the Automatic Referrals report and was wearing her referrals detective hat, she thought to ask after the disabled friend. She asked how he was doing, then mentioned to the client that she has a lot of experience helping people with disabilities, and perhaps she could help his friend.

Laura's client got on his cell phone right then and there—still sitting in Laura's office!— to call his friend and tell him he must IMMEDIATELY call Laura and schedule an appointment.  The friend took the advice. It turned out that he and his wife were quite wealthy, and became clients.

This is a textbook example of the client-centered mindset. But it doesn't have to be about disabilities. Whatever your specialty or target market (free registration required) happens to be, remember that your job is helping your clients overcome certain challenges and achieve certain goals.  Their friends, family members, and colleagues most likely have similar challenges and goals with which you can help.

So, instead of thinking of yourself as scrounging for new clients when you ask for introductions or referrals, realize that what you are really doing (or should be doing) is offering guidance and expertise to the people your clients care about.

You're not asking for help. You're OFFERING it. That's the client-centered mindset in action.

By the way, asking for help is fine too.  It's all in how you do it.

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Referral fear--or just good timing?

I had an interesting email exchange about referral aversion with Connie Kadansky, a call reluctance expert who writes for Horsesmouth.

Connie took exception to the following passage from the article 10 Referrals You Can Get This Month (free registration required):

When it comes to new clients, you might be even more reluctant to ask for referrals. Give them a couple of months to develop a trusting relationship with you before approaching the question. But if you feel comfortable doing it right up front, go for it.

In Connie's view, that passage "reeks" of Referral Aversion call reluctance. She writes: "I believe that anytime we come from 'don’t want,' we are coming from fear. 'I don’t want to prematurely ask for referrals'... 'I don’t want to jeopardize this relationship.' We may be making up a story that 'it is too soon' to ask, when our new client may be the type of person that will give a great referral that afternoon. Why not gently put it out there in the initial appointment and ask the prospect and/or new client what their style is as far as introducing people?"

Connie raises an interesting point. In my view, there is a difference between being reluctant to ask and having a sense of timing. Some advisors (you may be one of them) are taught to start asking for referrals before they even sign a prospect as a client. I do not personally adhere to that approach. Looking at it from the client's perspective, I would be very reluctant to refer people to a financial advisor before I'd had a chance to really evaluate his service and performance—but I am thrilled to provide referrals once I really know and trust someone.

High-quality referrals and introductions come when clients recognize an advisor's value. That may happen immediately with some clients, and take longer to develop with others. I do believe it's best to ask when you can be confident the relationship has reached the right stage of development. It may be appropriate to ask new client A for an introduction or referral a few days after opening his account, while client B needs to be cultivated for a month or two.

I'd point to Scott Carr, a very successful advisor (well over $100 million under management) who has built his practice almost exclusively through referrals.  But he will sometimes wait for as long as a year to ask for certain introductions.  He believes, and I agree, that it's better to be patient and get the introduction than to rush things and force an unnatural situation. Patience is key, he says: "It might be a year before I feel comfortable asking to talk to someone." (A case study detailing how Carr used referrals to build his business is included in the Automatic Referrals action reseach report).

However, I also agree 100% with Connie that advisors DO tend to make up stories in their own minds about whether it's appropriate to ask a client for referrals—and, due to irrational fears, usually come to the conclusion that it's NOT appropriate. Some advisors won't ask for referrals even when a client relationship is years, even DECADES old. It's like the difference between the guy who knows it's not a good idea to kiss the girl ten minutes into a first date (good sense of timing) vs. the guy who's still shaking the girl's hand at the door after 10 dates (fear).

As I see it, the critical question to ask yourself is, am I really waiting because that's what the situation demands, or am I just making excuses because I'm scared to ask? Learn to take each situation individually and honor your own judgment—but if your “judgment” is constantly telling you it's dangerous to ask, you've probably got a case of referral fear—and you owe it to yourself to work on that.

Want to weigh in on this issue? Click "comments" and tell us what you think.

Thanks, Connie, for a great discussion!  Connie's article on referral aversion will appear on Horsesmouth in the near future (we'll let you know when it's ready for prime time).  In the meantime, you can read her other articles on call reluctance here (free registration required):

12 Types of Call Reluctance: Are You Plagued by Any of These? 

How Sales Shame Kills Your Prospecting--And How to Stop It

Stop Freezing in Front of HNW Prospects

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Referrals: More on "failure to launch"

Do you wonder why your referral requests always seem to crash and burn?

Bill Bachrach has a theory:

If nobody's finding you, maybe you're not as attractive as you think you are. Do your clients make excuses when you ask them for referrals? Do you they tell you, "I don't know anybody who's looking right now, but if I come across someone, I'll let you know. Why don't you give me a couple of your cards?"

In "Referral failure: it doesn't mean you're unworthy," I respectfully disagreed with Bill's premise that advisors are afraid to ask for referrals because they know deep down that they're not really referable.  I also take exception to this notion that clients respond to referral requests with "I don't know anyone," because their advisor is not good enough to refer. 

I understand where Bill is coming from; certainly, there are some FAs out there who have some improving to do.  But our research suggests that nearly 90% of advisors routinely get the "don't know anyone" or "can't think of anyone" objection when they ask for referrals. And it's not because all of those clients are unwilling to refer.  It's because advisors usually don't ask in a way that makes it easy for clients to think of appropriate referrals.

Your client's brain is basically a big database. When you ask for referrals, it's essentially the same as doing a Google search. Ever try Googling without being specific? I don't know about you, but I don't have time to sift through 42,356,356 hits because I didn't type in specific-enough search terms.

If your client is just average, she knows more than 200 people. If she's well connected, that number is much higher. So, when you put her on the spot and ask her a question as general as "who do you know who might benefit from my services?" is it any surprise she comes up empty?

On the other hand, consider what might happen if you gave your client some parameters, such as "Do you know any other women who are also going through a divorce right now?" Now you've narrowed the field from hundreds of acquaintances to a much smaller group. That makes it easier for her to think of specific people and their situations.

So, if you typically hear some variation of the "I don't know anyone" referral objection, odds are the problem is not with your referability, but rather with your referral methodology. Once you figure out who your ideal client is, learn to convey that information to your existing clients, and understand how to ask for referrals in a targeted way, you'll stop hearing those unpleasant words and start getting introductions instead.

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Referral failure: it doesn't mean you're unworthy

If you're uncomfortable about asking for referrals, does that mean that somewhere, deep down inside, you know you don't really deserve them? 

That's what Bill Bachrach asserts in his article "A Boomer-Smart Business" in the March issue of Advising Boomers magazine. He writes:

If you’re great at what you do, you won’t be uncomfortable asking people to introduce you to others. You’d never hear someone say, “I’m a great pilot, but I wouldn’t want to ask anybody to fly with me.”

With respect to Mr. Bachrach, I have to disagree with this premise that advisors are reluctant to ask for referrals because on some level they know they're not really referable.

The truth is that some of the best performing, most client-service-oriented and most conscientious advisors in the business feel extreme discomfort about asking for referrals.   

It's not because they doubt their ability as advisors—not on any level.   In fact, they have the opposite problem. They consider themselves to be professionals of the highest caliber, and they mistakenly view asking for referrals as unprofessional and "salesy." They're afraid that asking will make a poor impression on their clients.

It's that erroneous belief—the idea that asking for referrals is somehow beneath an advisor or will make clients uncomfortable—that prevents most advisors from being more proactive about referral marketing.  Fortunately, these referral fears are unfounded and relatively easy to eradicate.

Is it possible that you're afraid to ask for referrals because on some level you're not fully confident in your abilities, or suspect you're not giving your clients all the attention they deserve?  Sure, it's possible.   It's also possible, and much more likely, that you're a very good or even exceptional advisor who doesn't realize how much you do for your clients and how much they value you. 

If asking for referrals makes you anxious, you owe it to yourself to take an honest and objective look at your skills, your practice, and your client relationships.  If something does need improvement, you can get to work.  And if you're already pleasing your clients more than you've been giving yourself credit for, you can start trusting those relationships and making the most of them. The truth—whatever it may be—will set you free.

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Why your referral fears are irrational

Does the thought of asking your best clients for referrals make you feel queasy? Do you avoid asking because you're convinced your clients will run screaming, convinced that you're, in the words of one advisor, "a greedy bastard?"

By far, the greatest fear among advisors is the concern that asking for referrals will erode their existing client relationships—that clients will feel put upon and burdened by the request. But this fear is unwarranted. In fact, multiple studies have been done establishing that some 85% of clients are happy to give referrals—if asked (unfortunately, most never are). And in all the years that my colleagues and I at Horsesmouth have been interviewing advisors, we've never once heard a story of damage to a client relationship from asking for referrals.

So, if you're afraid of asking, chances are you have a distorted view of how fragile your client relationships are. You can overcome this challenge with just a small set of mental adjustments. Step back and take an objective and realistic look at your client relationships. For the most part, you're delivering value, right? In some cases, you may actually have changed a client's life—literally. They can retire earlier, or care for their elderly parents, or send their kid to a better college, because of what YOU have done for them.

Unless you have serious problems in your practice, it's probably fair to say that most of your clients like you and trust you and think you're worthy of their friends, family, and colleagues.

After all—if they didn't, would they even be your clients?

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Why referral success is entirely up to you

Business coach Joe Lukacs makes a powerful point in his most recent Practice Power Audiocast  (make sure your speakers are on before you click), part of his series on the Seven Myths of Success for Financial Advisors.  The myth he busts this week is the idea that external forces play a significant role in your ability to succeed. 

Poppycock, says Joe. "If you look at people in any business, in any area, that achieve at high levels, they take responsibility for their success, and for their failures. They don't blame somebody else, they don't make excuses. They say, 'Look, I achieve, or I fail.'"

Joe points to the bear market of 2000-2003 as an example.  He says that many of his coaching clients simply ignored the things they couldn't control and were able to grow their businesses by 20%, 30%, and even 40%.   We found the same thing at Horsesmouth through our interviews with advisors.  While many FAs were crying in their coffee about how the market made it impossible to do business, a select few