The most effective marketing tool you have is a referral from an existing client or an opinion leader in your community.
It would be nice to think that all you have to do is a great job by your current clients and the referrals will roll in. Few advisers report that working as a strategy. The reality is that you have to reach out and ask for referrals. That act of asking is often one of the hardest marketing approaches for many advisers because it opens them up to the possibility for failure. Will the client see me as too pushy, too aggressive? What if it opens questions in their minds as to the value of my services?
Getting referrals starts with delivering the value your clients expect and verifying that they recognize the value that they have received. At that point, you are perceived as a credible, valued resource. A referral then becomes a logical and comfortable next step in the relationship. Another benefit of a referral is that is gives the individual a reason to be more loyal to you and your firm. By making a public statement in support of your services, they reaffirm the benefits they have received from the relationship.
Regardless of how you ask for a referral, your request needs to be framed as a benefit. This is an opportunity for your current client to help a colleague or family member and raise their value with that individual. The individual your client refers will receive a valuable service.
Outside the advisory community, passive referrals from online reviews, likes and endorsements have become key as consumers look to the experiences of others in their buying decisions. While the need to avoid testimonials limits the use of passive referrals for investment advisors, as long as their are no regulatory drawbacks, encourage clients to submit reviews on your company.
Ultimately, you have to ask for the referral. Indirect methods of doing so include statement stuffers, notes at the end of letters and emails reaffirming the benefit the client has received and asking that they let others know of your services, and even letters directly requesting referrals and enclosing business cards or invitations to special events that can be passed on to others.
When you do a good job for a client, you earn the right to ask for referrals. Again, the request needs to be in terms of the benefit to the client. “Joe, it’s great to see your account is up --% this year. You are well on your way to reaching your goals. I hope you are pleased with your results and will refer our services to others. If you have family members or colleagues we can help, please share our contact information with them. In fact, I can give you some extra business cards.”
Your next step is to make certain and thank individuals for their referrals. In meetings with prospective clients, ask how they heard of your firm. If it was through a referral, send a thank you note to the individual who referred you. If the referral becomes a client, follow up with another note of thanks and an update on the individual (keeping in mind, of course, privacy issues!). Your goal is to make the referring individual glad for you and to feel good about being a part of your new client’s success. Feeling good about a referral is encouragement for the individual to send more people your way.