Five reasons you are getting bad referrals (and how to fix them)
Let me guess.
- You do GREAT work. People should refer to you on the basis of your great work alone, shouldn’t they?
- You HATE asking for referrals.
- You are not getting enough referrals.
Another common complaint I hear from financial advisors is this: “I get plenty of referrals – the problem is not quantity, but quality!” Have you ever been sent a well-meaning referral from a colleague / friend / family member, only to discover that the prospect is not the right fit? To borrow a phrase from David Newman, did you wish you had a get out of referral jail card?
Well, I have not found that card just yet. But there are a few things you can try to fix your referral process. These steps are borrowed from David Newman’s “Do It! Marketing,” as well as from my experience as a coach. Read on to generate more and better referrals with less pain and suffering.
- Ask for what you want. Be specific.
Important note: you cannot do this until you are yourself crystal clear about your ideal clients and prospects. Once you are, don’t be afraid to get very specific!
A common referral request is, “I’ll talk to anyone who needs financial planning.” Do you see a problem with that? Is it any wonder that you get “anyone” walking through the door? How about, “I am a great fit for successful women entrepreneurs who want to stop worrying about investments.”
If someone in your network came across your ideal potential client, how would they know it?
2. Line up fantastic testimonials (if you are allowed by compliance to do so.)
Let’s be honest: a big reason why people don’t refer is because in making a personal recommendation, they take a risk. What if their friend / colleague / family member has a bad experience with you? It is difficult to completely remove that risk, but you can minimize it with great testimonials.
Pull together a referral testimonial / success story sheet with 2 kinds of quotes. One set is the client success stories – quotes from people who have been referred to you and became happy clients. This next detail is important, and most professionals don’t do it: include referral success stories – quotes from your referral sources about how good they looked for making the referral.
This may not apply to you for compliance reasons; if it doesn’t, let’s consider the next point.
3. Train your referral sources.
Very few of your referral sources can naturally describe your service offering as well as you can. Don’t believe me? Schwab backs it up!
According to a recent study by Schwab, when clients describe the firm, they are not able to explain the offering or experience in a way that’s compelling enough to inspire the listener to actually set up an appointment.
So, train them (in a nice way). Better yet, give them the tools to make the referral process painless and easy for them (and coincidentally perfectly crafted for you). I am talking about a referral blurb. Don’t have one? Send me an e-mail and I will send you a sample one! Natalia@AutenriethAdvantage.com
4. When a bad referral lands on your desk, help your referral source tune the GPS
Bad referrals happen. When they do, kindly and gently turn down the opportunity that is not the right fit for you – and tell your referral source what happened, and what to do differently next time. This is a delicate communication, so you will want to be sensitive and thoughtful in your wording. Be sure to thank them for the referral – regardless of the final outcome, the trust and the risk were very real, and in that sense every referral counts. Describe where the candidate profile was perfect, and where there was a disconnect. Apologize if your decision to not take on the prospect causes a relationship strain. This is a tricky balance to get right, so if you would like a template for this, I am happy to share one.
5. Give and you shall receive!
Give good referrals to the professionals in your network! To do that, learn to ask great questions of your colleagues, vendors, partners, friends, current clients. Are them about their best clients, how they could tell the prospect would be a great client fit, and specific key words / details / pain points that you should be listening for on their behalf. In doing that, you are modeling what you want them to do.
The last advice is carving out the time, space, and discipline to do these things in a regular structured way – consistently, patiently, and graciously. Sporadic referral cultivation works no better than sporadic gardening.
What will you try?