Rid Your Clients of Common Referral Objections

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

They were:

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Good luck.

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.

How do I Get Clients to Refer "Up"?

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

Ginita Wall will be responding to today's question, which was sent in by Caragh, an advisor in Syracuse. A CPA, CFP® and CDFA practicing in San Diego, California, Ginita is co-founder of the non-profit Women's Institute for Financial Education and author of eight books, including The ABCs of Divorce for Women.

Caragh's question: My client has quite a few friends and associates who are much wealthier than her, but she is more comfortable introducing us to people closer to her worth level. How do we get her comfortable with referring us up?

Ginita Wall's answer: Well, let’s look at it from her perspective. "Who am I to give advice to people who are more successful than I am?" she is probably thinking. And in a way, she’s right. So the trick is to move it from a professional referral plane to a more social one.

Here’s an idea: When her birthday rolls around, tell her you’d be happy to host a celebratory luncheon in her honor at a local eatery for her and five of her friends. And you might even suggest some names of her friends (if you know them) that include the wealthier ones, as well as those nearer her income level. You are looking for an introduction, and a social context is great.

Here are some other social events that have been successful:

• charter a boat for a ride around the lake
• take a special group tour of the local Wild Animal Park
• sponsor a spa day in a local hotel
• afternoon tea at a local hotel

Anything that will get her off the plane of thinking of introductions being in a strictly business context is great.

Good luck!

Editor's note: One advisor, Phoenix-based wealth manager Becky Gaylor, actually used an idea like this as a full-on marketing strategy. For one year, she hosted birthday parties each month for top clients, at a budgeted cost of roughly $1,000 per event. She phoned the clients a month in advance and offered to host a party for them and 10 to 12 guests as a way of saying thanks for being one of her best clients. Five years later Gaylor says she's still getting referrals from these events.

You can learn more about Gaylor's strategy and other great marketing ideas in Nicole Coulter's Horsesmouth article The Best Marketing Money I Ever Spent (free registration required).

Referral Clinic: "My best clients are using me up!"

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

Today's question comes from Carol, a wirehouse advisor in Englewood, CO, and will be answered by Katherine Vessenes, JD, CFP®, RFC. Katherine is president of Vestment Advisors and the country's leading authority on building a multimillion-dollar practice.

Carol asks: My ideal client has said I have been spectacularly successful in getting them to consolidate, assess and plan. Our investments have done very well. My problem is they believe if I have fewer clients, I will have more time to attend to them—and they have inquiries nearly every month which require research. I need to tell them I will not BE IN the business if I do not service more clients in the $3M range-just like them. How do I say they are using me up, which is short-term helpful to them, but long term means they will be with a different advisor?

Katherine Vessenes replies: Carol, I have two thoughts about your dilemma.

First, you might not be feeling so burned out if you felt like you were getting compensated for your time. Many years ago I learned an important lesson while practicing law and trying to keep the difficult clients happy: I would just raise my fees until I fell in love with them again. Consider using your RIA to charge fees or raise them for the level of service you are providing.

Second—if that doesn't work, then go to plan B: I would invite them to be part of your informal client advisory board. (Although this technique will work with just this client, it would be better in a small group of similar clients.)

Call them and tell them you would like to invite them to a dinner party and get their feedback on a couple of things because you really value their advice and are seeking some ideas about your business.

Start the meeting off by describing your ideal client. Then get the discussion going by asking the clients what they think the ideal client would like about your current level of service, and what they think you should change. Take copious notes, of course. Then ask them for suggestions on how to get more referrals to this group.  Good ways to phrase this are: if you were me, how would you approach this group? Can you give me some specific suggestions? If you are really bold, you might say: some of my clients have been hesitant to give me referrals even though they really like my services. What am I doing wrong?

Two things should happen after this meeting: you should have a great marketing plan to your ideal client, and your existing clients should be much more motivated to give you referrals.

Good luck and let me know how it works out for you.

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

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.

How do I Get My Bank Colleagues to Send Me HNW Referrals

Welcome to Day 11 of our Referral Clinic and Blog-a-thon.  We asked advisors to send us their toughest referral challenges. Now we're featuring the 20 best, along with solutions from top referral experts and veteran financial advisors. 

Today's winning question was submitted by Dylan, an advisor from British Columbia, Canada. Congrats, Dylan!

Dylan's question will be answered by Bob Cobb, the President and CEO of Ultimate Bank Advisor, a sales training and coaching company dedicated to helping advisors build the practice of their dreams. Bob's 20-year brokerage career included six consecutive years of Chairman's Club Production and 12 years of Sales Management and Branch Administration. Bob was voted Banc of America Investment Services Sales Manager of the Year in 2000.

Question: "I work at a full-service brokerage firm owned by a bank and we are competitors when we come across prospects or existing clients. On paper we are to work together, and we are positioned better to work with HNW families. I have sent referrals their way. How can I position myself to be on the receiving end?"

Bob Cobb's answer: Great question.  You are already sending some referrals their way, so you are already letting them know that it will not be a one-way street (this is one of their biggest complaints), but just as when you are attempting to work with CPAs and attorneys, that is not enough.

Here is a 5-step process that will have a dramatic impact on your referrals received:

1. View the world through their eyes.  Bankers often see only risk when they refer to you.  They have the relationship with the client (and they often have only 30-40 active at a time). If they don't know you, they often assume that referring business to you could be risky.  (This is the result of previous relationships that seemed like they were off to a good start, but were not). 

   Broadcast a bit on their favorite radio station WIIFM (What's In It For Me).  When you talk to them, be better able to answer the question "What will you do to make my relationships with my clients better?"  (Hint: Investment Management, Trust and 401K plan business all make their relationships with their clients much stickier, and give them a great reason to reconnect with clients that don't have a banking need today).

2. Develop a Joint Value Proposition. When you start working well together, clients will love that fact that you have experts on both sides of the balance sheet. 

   How can you position yourself as a team that will have the prospective client concluding you are different (read better) than the competition?

3. Walk the walk.  You say that you are referring people to them today. When you do that, are you positioning the banker powerfully in the mind of the client?  Does the client conclude that they definitely should meet with the banker? 

   Have you elicited the banker's ideal client and their value proposition so that you are making a powerful hand-off to the banker (and not sending them the equivalent of a 529 plan that starts with $500 and adds $50 per month)? The training that you have received dwarfs what they have been exposed to—so lead by example, be their sales coach, walk the walk!

4. Go on joint calls.  They have new business goals and in most cases are not comfortable making new calls.  Picking out some "joint prospects" is a great way for you to coach them on some new call strategies and demystify your process. 

   When they have seen you in action two or three times, and see that you have a client-centered process, much of the risk and resistance melts away.

5. Go above and beyond!  When you do get a referral, keep them in the loop.  Call them with updates as to exactly where you stand.  If you have left three messages and the prospect hasn't called back—or if you are playing phone tag—let the banker know.  In a new referral relationship, not knowing equals fear and uncertainty.  Think the Weather Channel and CNN: constant updates! 

   When you open the account, service the daylights out of them.  Nothing builds your credibility and trust as quickly as a newly referred client calling the banker back and saying, "Oh my goodness, John, I have been an investor for 20 years and I have never seen anything like that advisor you referred me to at Galaxy Financial!" A couple of newly referred clients that give you that feedback and you will be well on your way to the relationship of your dreams.

The bankers might be intimidated by you (like being paired with Tiger in a Pro-Am Golf Tournament) or might have a Hollywood impression (Wall Street and Boiler Room) of what advisors are like.  These five steps will reframe the way they look at you and help them to see you as an incredibly valuable asset in helping them reach their business goals.

Hope this helps!

Best wishes,
Bob

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

Getting Clients Comfortable Discussing Referrals With Friends

Welcome to Day 7 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 Bill C., an independent in Roswell, Georgia. Well done, Bill!

Bill's question will be answered by Chris Holman, a 20-year industry veteran and the president of Affinity Networking Systems, Inc. His sales prospecting nuggets and client acquisition strategies can be found on the Prospecting Professor. Chris is based in Minneapolis, Minnesota.

Question: "Most of my clients are more than happy to provide referrals, but it's obviously not on the top of their mind when they are amongst friends or colleagues, so they rarely bring up the topic. Or they don't know how to bring up the subject without getting personal. Do you have specific recommendations, dialogue suggestions, etc. to help my clients feel comfortable addressing the issue amongst friends and thus being able to effectively refer business to me?"

Chris Holman's answer: In the referral-dynamic between Advisor and Client, there are 6 sticky points that seem to continue crop up.

• Downside vs. Upside. From the client's perspective, what is their upside to referring their best friend, their mother, or a business colleague, to you? A thank you card? A free dinner? An 'attaboy?' In comparison, what's the downside? From the client's perspective, the downside and the worst case scenario of providing a referral—is that the referral doesn't go well, and the client loses a valuable friendship. If nothing else, the advisor should recognize and acknowledge that the client's downside outweighs the upside, when it comes to providing referrals. This acknowledgement lets the client know that you are empathetic to their concerns.


• Introductions vs. Referrals. In some cases, the term 'referrals' causes the client to freeze up, whereas 'an introduction' is much more benign-sounding. If this is the case, even though it is a semantic difference, so be it. You might find it helpful to remind your clients that you are only asking for an introduction anyway, not a lifetime commitment.


• Loose Lips Sink Friendships. It goes without saying, but I'll say it anyway. Are you completely discreet when it comes to your professional relationships? More importantly, are your clients aware that, should they provide a referral, you will guard client privacy (theirs and everyone else's) at all costs?


• Follow-Up and Thank You. Surveys have shown that one of the single biggest reasons that clients stop providing referrals is the lack of follow-though and thanks. After receiving a referral, be sure to thank your client appropriately, and inform them that you have followed through with your contact to the person who was referred to you.


• Be Specific. In some cases, it helps to remind your client as to what you will do, in specific steps, with the person who is referred to you. Some clients may have the mistaken impression that, when provided a referral, you will 'hound' this person with calls and letters—until they surrender. Outline the specific and professional steps that you take with all prospects that you are introduced to you—and this concern evaporates.


• A Touch of Class. Thank You Notes are a start, yet you might think of something even better. One advisor who I know sends out a gift certificate to the client's favorite restaurant—for BOTH the client and his 'significant other.' Another advisor learns the client's favorite charity, and makes a donation to that charity in the client's name. Either way, a creative 'thank you' is very effective.

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

The ABCs of Automatic Referrals: B is for "Back Door"

Let's talk about initial conversations with referred prospects.

I hope you'll agree that where referrals are concerned, protecting your relationship with your referral source is of paramount importance.  It trumps establishing a new relationship with the referral.  That is, in the best of all possible worlds, you'll do both, but if it comes down to one or the other, you care more about keeping your existing client than about getting a new one.

That prioritization should inform the way you approach your conversation with a referral.  You want to make a good impression and get them interested in working with you, but not at the risk of pushing too hard.

One way to accomplish this is to use the concept of a "back door" when you first start talking with the referral.  You explain that you think you might be able to help them, but emphasize that you are simply feeling out the situation and have no expectations one way or another. 

Here's an example of how this type of follow-up conversation might go (with a tip of the hat to Bob Burg).  Key phrases that emphasize your relationship with the referring client and reduce pressure on the prospect are highlighted in red:

You: Mr. Saunders, this is Pat Caruso. Your name came up in a business conversation yesterday with Skip Peterson. I believe you know Skip from the hospital board?

Referred Prospect: Yes, I've known Skip for a couple of years. What can I do for you?

You: Skip didn’t assume you’d be interested, but he was very enthusiastic about a succession plan I helped him set up recently—I specialize in succession planning for privately-held businesses—and he thought you might be interested in doing something similar for your own business, so I told him I would contact you.  Maybe we can meet for a quick cup of coffee and I'll run it past you.

There are two reasons for this approach. One, it keeps the pressure on the prospect super-low. As Bob points out in his article Referrals: How to Set More Appointments (free registration required), most of us automatically get defensive and resistant if we feel someone is trying to "sell" us—and when we're feeling defensive and resistant, we're not open or listening.

Two, providing a "back door" makes you more attractive to prospects, because your credibility and desirability increase when you sound like you don't need the business. You're animated and friendly, of course, but without pressure or urgency.  Burg calls this lack of attachment to the results "posture."

Obviously, you should find words that fit your personality and style.  Just remember that the goal is to generate interest without applying pressure.  Assure prospects they're not cornered, and they'll be much more likely to listen to what you have to say.

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