Gaining quality referrals

We all need to encourage much more than the current 20 per cent of consumers that are engaging with an adviser. So, what are the best practice techniques and processes to ensure quality referrals and new business revenue for advisers?

Referrals from existing clients

Mindset is very important. When approaching the subject of referrals you need to be taking your client on a journey – what’s in it for them to refer you to their friend/colleague?

This is where social proof comes into play, as illustrated by Robert Cialdini in his book The Psychology of Persuasion. “Every time your client refers you to their friend or colleague and a good outcome is achieved, it confirms the faith and trust they placed in you in the first place,” Cialdini says.

I highly recommend you begin the client conversation with a question about the value of the relationship. What parts of the relationship does your client find the most valuable? 

Frame the question as seeking feedback from your client.

Once you clearly identify what they value the most, you have the foundation for a conversation around people they may know who could benefit in the same way they have. Often people are referred when there are changing circumstances in their life like the family situation, new job, nearing retirement, redundancy etc. So, to help your client identify people you can talk to, you need to narrow the field and frame your questions around people they know who might be experiencing changing circumstances.

When your client suggests a person who might benefit from a conversation with you, don’t be tempted to run off and make contact with the prospect. It is very important that your client speaks to their friend/colleague first, so that when you call the subject is well introduced and your call is not cold.

It should go without saying but it is often not done well. You also need to keep your client informed about your contact with their friend.

Referrals from centres of influence


If you are seeking to establish a new centre of influence like an accountant, ask your client to refer you to their accountant.

When you first meet a prospective centre of influence, it's important that you only talk about the prospect of being able to refer to them. Don’t say things like “I can provide great benefits to the clients in your client base”.

Referrals between centres of influence are all about identifying the broader needs of clients, which starts with you, the adviser. Over the last 12 months, how many clients have you referred to other professionals?

It is highly likely your centres of influence – accountants, lawyers, finance brokers and general insurance brokers will need help with how to identify broader financial needs. To do this you will need to provide them guidance on what sort of questions to ask their clients and how to position the conversation.

When you do receive a referral, make sure you keep your centre of influence in the loop. Lack of action here is a large contributor to good referral relationships breaking down.

Apart from individual conversations with clients, you should also think about other activities you can do together that can generate business, such as webinars, references on websites and sharing office space to reduce rental costs.

David Phelan, Effective Referral Management

Gaining quality referrals
David Phelan
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