We tie ourselves into knots trying to understand why more of our clients, who clearly love us so much, don’t tell their friends and families about us. I’ve written, at length, about why clients don’t refer and why they do and I believe that understanding the answers to both questions is critically important. What I haven’t specifically addressed is ‘how’ they refer. And how clients refer is almost as important as if they refer. We know, from our investor research, that very few referrals are actually introductions. If you think about it, two things need to be in place for a referral to result in an actual meeting.  First, your client has to make a compelling case for the value you deliver. Then, the prospect needs to be so motivated to talk to you, he or she will track you down and set up a meeting. I’ll go with ‘unlikely’ on that one. The answer to the problem, of course, is that we need to find a way to encourage our clients to make direct introductions. But how?

At the risk of over-simplifying the solution, I’m going to over-simplify the solution.

Ask clients about how they referred and they will likely tell you. Then use that information to encourage more clients to refer (or introduce) successfully.

So how do you go about it? Consider this. Identify five clients who have provided referrals over the last year and invite them to lunch or ask for ten minutes of their time at the end of a review. They referred you to someone they care about (the world’s greatest indication of trust) so there’s a good chance they like you and will say ‘yes’. Let the client know you're trying to understand more about how clients refer and that you would value their input. Try this on for size. I was really honored that you referred me to <insert name of client>. It means a great deal. I wondered if I could ask you a bit about that? From there, dig in on the circumstances:

• Did <he or she> ask you for an introduction to an advisor?
• Was there something about his/her circumstances that made you think we could help?

Probe on the circumstances, how your client's friend raised the issue and why the client thought you could help. Had they experienced the work you do in that area, read about it on your site or learned about it through stories you shared? Then dig in on the process.  Try this as a starting point. It’s interesting but we hear that clients refer all the time but we don’t often meet those clients. Can I ask how did you make that referral? Probe on whether your client shared contact details, sent the friend to your website or perhaps passed on information or articles you had written. Dig into whether there is anything you could do to make it easier. The way the client responds to the first questions will help you understand:

• What topics are clients discussing when they think of you (e.g., was it related to investments, to life or to retirement?)
• Did your client refer you prior to being asked for a referral or did he/she wait for a clear indication that a referral was being invited?
• How do your clients perceive the problems that you can solve?

That information will help you craft stories that will help your clients spot a need for advice. The way the client responds to the second question will help you understand the specific ways in which they refer, and if and how that translates into introductions. It will also help you understand if there is anything you could do to facilitate more referrals or make introductions easier or more comfortable.

A Bonus

And you may just find that by asking the client to help you understand referrals, it reminds them that you are open for business. Not a bad result.

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Thanks for stopping by,

Julie