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

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

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

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

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

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

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

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

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

'Tis the Season for Referrals

Christmas is only 5 days away. I know this without even thinking about it, because my kids have been asking me every single day for two weeks now how many days are left until Christmas! I can do the math in my sleep at this point. 

So I understand that right now, your mind may not be focused squarely on your business. But I want to remind you that the holiday season brings a special gift to financial advisors who know where to find it, and how to unwrap it. 

Right now, your clients are going to lots of holiday parties. They're seeing friends, and may be preparing to spend a good chunk of time with family. Many of them are thinking a lot about giving, and bonding, and what makes life worth living. 

Come January 2, all of this activity and thought will add up to a treasure trove of valuable information that you can unlock to generate more referrals.  As we've discussed in past articles here, one of the keys to a good referral strategy is putting on your detective hat and learning more about who your clients know.  As any good detective knows, asking the right questions can make all the difference. 

Here is your assignment for the remainder of the holidays, and for the month or so afterward. Turn that standard post-Christmas chit-chat with clients into a real priority. Ask every single client what they did for the holidays. And then, when your client tells you how lovely it was to see her new baby granddaughter enjoying her first Christmas, don't just say "that's nice" and then turn the discussion to how you want to change her asset allocation in 2008.  Ask more questions. Dig deeper. Recognize the information for what it is: an opportunity. Make a note of the information you hear so you can follow up on it later.

Ask where your clients spent the holidays.  "Did you host family?" "Did you go to any interesting parties?" "Oh, you vacationed with friends in Arizona?  Who are the friends, and where did you stay, and how do you know these folks?"  "What was the most interesting gift you received?" 

What you hear won't always be positive. The holidays can be a difficult time, people's lives aren't always going smoothly, and of course, friction can arise during those heartwarming holiday visits. If a client reveals this type of information, don't brush it under the rug or try to change the subject. Engage it. "Oh, your sister's husband just left her?  That must have been very difficult at the holidays. How are she and your niece and nephew handling it?"

You will be amazed what you didn't know, and what you'll learn, about your clients and their connections. Some of those connections may end up becoming clients, when you learn to ask more questions about them, uncover their needs, and ask for introductions.  Make sure to document every scrap of information, so you can follow up on it later. 

Oh, and there's no need to wait until after the holidays to put on that detective hat.  Any conversation you have with a client between now and year-end should include some good questions (and at least two or three follow-up questions) about their plans.  Even if they don't celebrate Christmas, you can still ask about what they'll be doing for New Year's, or whether they will be taking advantage of the season to get some vacation time in with family and friends.  For example, I asked a colleague recently what she was doing for the holidays, and she told me that her grandmother has recently been diagnosed with Parkinson's disease, and is coming to terms with the fact that it's getting to be too difficult to care for her home and her husband. This all came out in a very simple exchange (I asked one question and one follow-up question ). 

Hopefully, as an advisor, you already see the opportunity that would be opened up for you if you had this conversation with a client—especially if you just happen to have experience working with elderly clients facing similar situations.

While you're processing these suggestions, keep in mind also that the holidays are a great time to re-connect with the idea of referrals as "client-centered."  Focus on referrals as a way to give to your clients, not take from them... and you'll find that it gets much easier to ask for those introductions.

Good luck, and Happy Holidays from all of us at Horsesmouth!