It turns out you can ‘do nothing’ and still attract some referrals.
However (and as you can imagine) there’s probably more to the story, or this would be the world’s shortest blog post.
So to start, I should qualify that opening statement as follows. “It turns out you can do nothing but deliver a high standard of service, and still attract some referrals without being proactive in your approach.”
You know the drill. If you deliver great service, some clients will share that experience with the people they know. Malcolm Gladwell called them ‘Connectors’ in The Tipping Point and we love them. They are the clients who are driven to connect the people in their lives simply because they want to help.
So what’s the problem?
You do great work. You have clients who send you referrals. Life is good.
The real problem is that what I’ve described is your ‘natural’ level of referrals – the referrals you’ll receive without intentionally focusing on increasing referrals. However, you probably want to do more – moving over and above your level of natural referrals to maximize your referral opportunity.
Side note –
In case you don’t read to the bottom…. I wanted to flag a great opportunity to go deep on your own business and understand what you can do to increase referrals. You’ll need to participate by March 31st and can learn more here.
Maximizing Your Referral Opportunity
To maximize your untapped referral opportunity (which I would describe as substantial) you need to proactively focus on driving more referrals. The problem is that you may have been lulled into a false understanding of what actually works.
Your experience suggests that all you need to do to drive referrals is make yourself as referable as possible. And so you can focus all of your time on thinking about how you can enhance the level of service you offer without realizing there is also a limit to natural referrals.
The key to reaching your ‘natural’ level of referrals is to focus on becoming referable.
Here’s what we know:
- Clients are, in fact, very satisfied. Last year 91% of 1,000 investors told me they were somewhat (28%) or very (63%) satisfied with their advisor.
- Satisfaction makes people ‘comfortable’ referring. Among that same group of 1,000 investors, 95% said they are somewhat (13%) or very (82%) comfortable providing a referral.
So it seems logical to spend your time tweaking an already high standard of service. Not only have some clients referred, they are more ‘comfortable’ referring the more satisfied they become.
Here’s what we also know:
- Being comfortable providing a referral doesn’t mean you actually provide a referral. Just a third of clients said they had referred, despite being highly comfortable.
- To cause clients to refer (beyond those natural referrals) we need to understand what motivates them to refer. Clients refer, primarily, because they are trying to help a friend or family member find a solution to some challenge in their lives. (It’s true, they don’t refer to help you.)
All of this reminds us that there are, in fact, two critical parts to the referral equation. To reach your natural level of referrals you want to focus on becoming referable. To maximize your referrals, you also want to focus on facilitating referrals.
The need to facilitate is underscored when you consider that clients simply don’t know who to refer. Of those clients who didn’t refer, 78% said it was because they hadn’t met anyone they thought needed an advisor, or didn’t know who to refer. That’s a missed opportunity of epic proportions.
And while it might be a missed opportunity, that stat reminds us that we’re in control. You can (and should) continue to focus on becoming referable but you can also help your clients understand the problems you solve and the people you can help.
You can, in effect, help your clients spot a referral opportunity.
What’s Your Next Step?
The longer I study referrals, the more I realize it’s part art and part science. Whichever dominates, it’s clear that there are levers we can pull to increase our chances of success. The problem, of course, is knowing what will work for you.
Here’s how you can find out.
Until Friday (March 31st) you can access a comprehensive assessment of your business and referral process. You’ll receive a free report that will help you understand what you can focus on in your business to give you the biggest return on investment in attracting more referrals and new clients. The offer for your free report is part of an amazing new program being developed by my friend and colleague Stephen Wershing.
Thanks for stopping by,