Is the Use of One of These Hackneyed Referral Requests Hurting You?

Speech is a free-flowing, spontaneous medium. When you talk with clients, often you don't even think about what you're saying or how you're saying it—you just go with what pops up in your head, and what pops up is generally the phrases and talking points you've used in past conversations.

When it comes to referral requests, "what you've always said" might be hurting you more than helping you, especially in the current atmosphere. Here are three popular phrasings of requests from the "Leading Your Own Referral Revival " AdvisorFest webinar (free registration required) hosted by Bob David, including why you should think twice about using them:

• "I'm taking on a select number of clients this year." This is meant to project exclusivity, but it can come across as too advisor-centric. Also, it's a similar approach to that used by Bernie Madoff, telling investors that he's closed but that he'll make an exception just for them, fooling them into believing that he must work wonders to be so overwhelmed with clients. Do you really want to be taking cues from Madoff's playbook right now?

Try being more inclusive and sympathetic. Ask clients if they know anyone who is unhappy with their investments, and if so, if the three of them would like to get together for lunch.

• "I get paid two ways, one is referrals." There are many variations of this. If you're not careful, clients may resent you for being less than honest and upfront. Also, with many portfolios having taken large hits, investors are questioning the fees they pay their advisors, so bringing up the issue of payment may not be the greatest idea.

  Instead, put the focus on giving. Offer to send your newsletter or articles to anyone your client knows, provided it's OK with them.

• "Who do you know that can benefit from my services—or is just like you—or who should I be talking to..."  Too vague and broad. Most likely to get a deer-in-the headlights response.

  In our research and experience, the more specific you get when asking clients about people you could help, the better. Mention specific examples of the kinds of clients you work with (like entrepreneurs, pre-retirees, etc.) and the specific issues you have expertise in (business succession, IRA rollovers, etc.).

Why Educating is the Key to Bringing on Clients and Keeping the Ones You Have

There is a paradox in today’s investment world, especially when it comes to the wealthy. In order to overcome loses from last year and recover their nest eggs, many investors want to get aggressive and capitalize on the market recovery. However, these same investors are still afraid of being burned again by a market plunge and many of them have lost confidence in investment professionals to guide them through.

Educating is a great way to overcome the fear and distrust many are feeling, since understanding grants peace of mind. An effective way to keep your clients informed is by sending articles to them, encouraging them to pass them along to friends and family, which also makes it a good stepping stone to referrals.

Here are some important points to keep in mind should you decide to start an article sharing strategy:

• Find articles that reflect who you are and your investment philosophy. Remember that the goal here is to educate the client or their associates, giving them knowledge about why and how you do what you do so that they feel comfortable with you managing their assets.

• Write a note on the corner of the article. This could be something as simple as, “Saw this and thought you’d be interested,” to explaining to them how the article fits in with their own portfolio strategy. This adds a personal touch, making it more meaningful.

• Keep tally. For an article sending strategy to work, you need to keep at it, and the only way to ensure that is to track how often you’re sending them out. Plan out how many you want to send each month and stick to it.

• Alternate mediums. Email makes it easy for clients to forward articles along to their friends, but don’t rely just on sending articles electronically. Mix it up by sending the articles via fax or physical mail. 

• Encourage clients to share! This one’s important. Always include a line written somewhere on the article or in the email about sending the article on to anyone who could find it useful. This is what will get you referrals.

• Get writing. Authorship is a powerful credibility establisher and trust builder. If you can, write articles for local papers or trade magazines and then send reprints to your clients.

• Avoid mentioning products. Whatever you do, avoid having the articles you send read like a product advertisement. This makes clients and prospects see you as a salesman, and that’s the opposite of what you’re going for.

See these articles for more on using education and article sharing to improve client service and ramp up prospecting (free registration required):

The Rule of 7: How to Build Mindshare and Win More Clients
How often do you follow up with a prospect? Do you make one call and hope that it's enough? Two? Three? Four follow-ups? Is there a magic number of follow-ups that will increase your chances of sales success when prospecting? Yes. The magic number appears to be seven.

How to Land New Clients in a Bear Market
Here's how one advisor is using a four-pronged approach to communicate with clients in a way that naturally grows his business during a market crisis. If you view the current turmoil as a buying opportunity, you must also see it as a once-in-a-lifetime opportunity to add new clients. Embrace it or waste it. The decision is yours.

Keeping the Faith With Clients
Now more than ever, the trust you engender will make or break your career. Here's how to consolidate clients' trust and keep it by being a leader in turbulent times.

Finish Referral Conversations in a Position of Control

How many times has something like the following happened to you: You're talking to a client or another professional when they mention someone they know who they feel could utilize your services, so you hand them your business card and ask them to pass it on to the acquaintance. Then comes…nothing. Time goes by with no call. If the person you gave the card to did pass it on, which is certainly not assured—it's more probable that they forgot and/or misplaced the card—the acquaintance might not get the prompt to action they might need to pick up the phone and ring you up.

Over at the Referral Authority, Matt Anderson identifies this kind of passive "pass on my card" situation as one of the biggest problems people have when it comes to referrals. "Always be in a position where you're asking: 'When should I get back to you to see if this person is interested?'" says Anderson. When you end a referral conversation on that note, with a confirmed future action set in place, you stay in control of the process and ensure that the ball will keep rolling.

The next time a referral opportunity comes up in a conversation, don't end the talk passively. Set the stage for future action, committing to a time when you can follow-up with the person who's agreed to pass the card along.

Be Upfront About Expectations in New Referral Relationships

Past posts here have discussed the seeds of referral opportunity in the current market environment—the chance that your clients know someone who is unhappy with their current advisor, whether due to lack of contact or poor performance, is very high. You should certainly be asking your clients if they know such an unsatisfied friend or associate.

But you should be careful if one of your clients refers such an acquaintance to you. Because the referral is coming off of an unsavory relationship with another advisor and you were recommended, they are likely to have unnaturally high expectations. It's not a bad thing that they think highly of you, but exaggerated expectations can lead to frustration when they're not delivered upon, and let's face it, no one is making miracles happen in this market.

In order to address these kinds of inflated expectations, you should be upfront early on in the relationship, before the referral agrees to become a client. You might tell them that your clients have not been immune from the market meltdown and that you won't be able to fix all the problems with their accounts over night, but also that you are dedicated to protecting and growing your clients' assets and would appreciate the opportunity to do the same with them. Whatever you choose to say, honesty and pragmatism are key.

By bringing up expectations and addressing reality like this, you encourage future client satisfaction. To ignore inflated expectations is to make dissatisfaction, and possibly defection, more likely.

Making Thank You Notes Personal When Hand-Script Isn't an Option

Replying to the post, "The Art of the Referral Thank You," an advisor named Justin wanted to know if there was a way he could send notes to his clients thanking them for referrals that had the same impact as a handwritten note, only not handwritten. "I have horrible handwriting and have resorted to typing all correspondence," he wrote. "Do you have any other suggestions?"

Firstly, the flaws in handwriting are part of the charm in handwritten thank you notes. It really sets them apart from word processed fare and gives them a personalized feel. You shouldn't worry too much if your handwriting is less than perfect—handwritten thank you notes will still be very effective. Think of a homemade gift from someone. It may be a little rough around the edges, but the time and care the giver put into it has a profound impact. It's the same idea with a handwritten thank you note.

However, one thing I must stress to Jason and anyone else worried about the legibility of their penmanship is that you should be wary of faking the handwriting. Some people try to make their correspondence look hand done by using a certain font that imitates hand-script-I'd advise against doing this. Not only will clients see through this, but they are likely to perceive it as tacky. It's far better to just word process them without the deception if your handwriting is truly illegible.

Another option is to pay a company like Send Out Cards to send thank you cards to your clients. The way this works is that they send you a form with a space to write each of the letters of the alphabet. Once you do this and send it back, they can create an infinite number of messages in your handwriting style. This way you only have to make the handwriting look good once, and you can save yourself an aching wrist, too. Send Out Cards even has a selection of gifts like chocolates, books, and candles you can send out with the card should you choose to. The downside to this approach is that you won't be able to use cursive, and perceptive clients may catch on to the fact that it's mass-produced. Still, it's a good way to add a personal touch if you don't have the time or the ability to do thank you notes by hand.

The Biggest Reason Why People Fail With Social Networking Sites

Social networking sites aren't just for college kids anymore. As testament to that fact, the stat tracking site Inside Facebook cites that the fasting growing demographic of users to the site of that name is women over 55. More and more, sites like LinkedIn and Facebook are becoming efficient and powerful ways for professionals to network.

But if you're going to take the leap and start a LinkedIn profile, make sure you do it right. At raintoday.com, Jason Alba posted a list of 11 tips for getting the most out of social networking sites like LinkedIn or Facebook. I found his first tip to be the most important:

"If your profile isn't complete, I might not trust who you are when you reach out to me."

This highlights a common problem I see with many people's profiles on social networking sites. Signing up is only the beginning—if you're going to get any meaningful networking done, you need to both fill out your profile with information about yourself and customize it in ways that reflect who you are and what your business is all about. Only when people feel like they know you and what you're about will they take the effort to reach out to you.

What's more, a blank or incomplete profile reflects badly on you. It can send the message to potential contacts that you don't follow through on things or that you aren't organized. It goes without saying that this is not the kind of impression you want to leave with people.

So be careful when you use social networking sites. Dabbling on LinkedIn and Facebook may be fun, but only by making your profile a true representation of yourself and your business can you hope to attract the kind of contacts you seek and project your professionalism.

Once you've joined a social networking website like LinkedIn or Facebook, your work has only begun.

Ramp up Referral Quality with a Joint-Client Survey

A strategic alliance with another professional such as a CPA or attorney is a valuable asset to any referral strategy. Yet Julie Littlechild of Advisor Impact has an idea to make these relationships even more effective: a joint survey, both independently run and confidential, of both client bases.

"In this scenario," writes Littlechild of such a survey with a CPA, "you would conduct an independent survey of your clients, and the CPA would conduct an independent client survey of his or her clients. Each survey would reflect your own needs and objectives, but you would look for cross-selling opportunities for the CPA (e.g., valuation or corporate audit services), and the CPA would look for cross-selling opportunities for you (e.g., wealth management or estate planning)."

Armed with this information, both you and the other professional will be able to give referrals where there is true need for the others services.

Here is Littlechild's sample letter to a COI (center of influence) introducing the joint-survey idea:

Dear COI,

I'm writing to let you know about a client survey program I thought you would find of interest. We are looking at conducting a client audit, which is a tool that allows you to gauge client satisfaction and to identify specific cross-selling and referral opportunities.

I thought you would be interested to know that in addition to getting feedback on the service we are delivering, we are asking clients to rate their overall satisfaction with their accountants and expect to be in a position to send you several referrals as a result.

The firm that conducts the client audit also works with accountants, so I am attaching the brochure. If you are interested, I would be happy to make an introduction and would be very interested in talking about how we can structure both of our surveys to gather feedback that would allow us to provide more focused, needs-based referrals to one another.

I'll follow up in the next week to discuss the idea further, but please don't hesitate to call if you have any immediate questions.

Sincerely,
[Your name]

For more ways you can use surveys to improve your referral strategy, see Littlechild's full Horsesmouth article, here (free registration required).

One Good Thing About the Down Market...

People are talking about money. It's certainly not happy talk, but their finances are on their minds, and this is something you can use to your advantage. Your clients have had their ears talked off, no doubt, by friends and associates who are dissatisfied with their current advisor and who are hungry for quality advice. Consequently, many of your clients' radars are chock full of referral possibilities right now. Now is the time to bring up the subject of referrals.

Matt Anderson of the Referral Authority has just the script for such conversations. As he points out, the key is to ask open ended questions and to get your clients to be specific:

You: You know, it's been real interesting. We're finding that most folks don't talk about their money with their friends and family when the market is good. However, when the market goes down as we've experienced lately and investors are fearful, everybody seems to be talking about their money. (Now be genuinely curious.) Are you finding the same thing? (An alternative question that also works is, "Who have you heard talking about it?")

(Pause to allow your client to elaborate.)

You: What are you hearing?

(Let your clients talk and hopefully mention specific people they have talked to recently. If they don't mention names, be genuinely curious and say: Was this a client of yours? Someone in your family?)

You: It's interesting: We have been adding new clients lately as a result of some of these conversations. I attribute it to the fact that a lot of financial advisors are not returning client phone calls or simply going out of business.

(Follow up the last comment with a small anecdote, such as: "I got a new client a couple of weeks ago whose financial advisor happened to be his own uncle-but after three unreturned calls, he got fed up and contacted me.")

You: "You mentioned David, your client who owns the IT company. Do you think he might appreciate having a conversation with us? We'd be happy to share with him our views about the market or even possibly provide a second opinion to make sure his assets are properly positioned."

(Provided your client says anything other than no, continue on.)

You: What would be the best way to find out if he might be interested? Would you mind asking him or shooting him an e-mail to see if he'd be interested in a quick conversation?

If you've been good about showing your value and addressing client concerns during the down market, this script can be very effective. Be sure to read Matt's entire Horsesmouth article (free registration required) to learn more ways you can enrich the conversation.

Are You Stuck in Defense Mode With Your Clients?

During a recent presentation of the Automatic Referrals Jumpstart Program, an advisor expressed his exasperation with getting his referral strategy up and running. His hands were full just reaching out to his client base, how was he supposed to find the time to expand his book with referrals? There are only so many hours in a day…

Many are experiencing the stress of this advisor and feel rundown. Without question the market situation has made client communication of vital importance.

But, while it's imperative that advisors proactively contact all clients and have in-depth discussions and make specific recommendations about how they move forward in this environment, it's also important to "integrate" those conversations with referral requests. The fact is that advisors need to dig deep and do both. Advisors may feel "bogged down" for a short while, but the reality is that meeting and/or speaking with every client takes only so much time.

It's like a football player that may be used to only playing "defense" but then during a critical game is asked to play offense as well. Smart advisors are taking advantage and gaining market share in this environment. They know that uncertain times make prospects more open to a second opinion. By the time the "crises" has passed, the "bogged down" advisors will have missed their window of opportunity while the ones that made the effort to play offense as well as defense will look up at the score board and have a commanding lead.

For advice on how to energize your referral strategy in this opportunity-rich environment, make sure to check out Horsesmouth's Automatic Referrals Jumpstart Program, and check out these articles as well (free registration required):

The 4 Keys to Referral Success
COIs can be the key to building a referral business-but only if you have enough of them. Here are four ways to increase your referral network and jump-start your business.

12 Referral Truths
If you're afraid of asking for referrals, you're missing out on a huge amount of potential business. Don't let this happen. Take a minute today to consider these points. Outstanding referrals will follow if you commit to making that happen.

3 Steps to Maximize Your Referral Radar
If you want to increase your referrals (and who doesn't?), first execute the three phases for finding great referral partners. Each phase-appropriate strategy will help you heighten your referral radar and win more business.

Why Many Referral Requests Don't Work

Over at the Modern Image Communications blog, Karen Scharf has posted her "6 Common Mistakes in Referral Marketing." It's a great list of common referral blunders, and I found her warning against ambiguous referral requests to be especially pertinent. It's a problem that is addressed extensively in Automatic Referrals.

When you ask a client a question like, "Do you know of anyone who could benefit from my services?" it is simply too open ended. The client's mind is likely to wander aimlessly and come up with either nobody or random acquaintances. They know a lot of people, after all, and searching through their entire mental-rolodex for people who could work with you is just too tall of an order to do on the spot. And those they do come up with are likely to be under-qualified.

The trick is to get specific. Think about who your average client is and certain features that stand out about them. What kind of income are they making, what kind of work are they involved in, are they near retirement? Implement those features into your referral questions to give your clients a narrower focus. When they have a clearer picture of who you can help, they're more likely to think of better qualified people and more of them.