The Prospecting Professor

Referral Blog

Mark Twain said that "All you need in this life is ignorance and confidence, then success is sure." As much as I love the wit and wry advice of the greatest of America's humorists...his formula for success is incomplete with regard to the state of business today. Success in business is a direct function of our visibility and credibility within the networks that we invest in...and the word-of-mouth referrals that are generated from these networks.

Today, I want to refer you to a new feature of the Automatic Referrals website, a Referral Clinic and Blog-a-thon!  Automatic Referrals asked financial advisors to send in their toughest referral challenges. Now they're featuring the 20 best, along with solutions from top referral experts and veteran financial advisors. 

This should be interesting and valuable. Take a moment to check them out.

Getting Referrals

Miriam Lawrence, of Automatic Referrals, has a good post on how to get "back-door" referrals. In the same vein, here is a note that can be used...whereby your client can contact a potential referred prospect.

This note can be especially effective using email. Here is how it might work. The client sends an email to the referred prospect...and copies you on the email. You wait a few days, no longer than a week, and contact the referred person by email directly, asking them if you might call them on the phone. In this conversation, you will make initial introductions and set up a face-to-face meeting.

Here's the body of the note:

Dear Prospect:

This is just a note to introduce Miriam Lawrence who will be getting in touch with you soon.

Miriam has done some work for me in the investment and insurance areas.

Certainly, neither Miriam nor I are assuming that you would be in the market for her services; however, I felt very positive about my experience with her, so I  would like to introduce the two of you.

Probably, like  me, you are not eager to talk to another person in this business, but in this case it might be well worth your time to make an exception.

Best regards,

Of course, this doesn't always work. Emails are very easy to ignore...especially when the referred prospect is a busy-type who might be getting 100+ emails daily already. In that case, a handwritten note may be more memorable and effective.

How many handwritten letters did you get today?

Henry David Thoreau on Referrals

"Cease to gnaw that crust! There's ripe fruit above your head."...Henry David Thoreau

Henry David Thoreau, (1817-1862) was a writer, philosopher, and naturalist...who believed in the primacy of personal insight and experience; and advocated simple, principled living.

In all likelihood, the quote above alludes to Thoreau's belief in the doctrine of Transcendentalism...rather than his espousal of the use of referrals in growing a professional practice. For what I know of Thoreau, he doesn't seem to be the type to provide business-development advice to sales professionals.

Nonetheless, referrals through personal introductions are the proverbial "low-lying fruit" with regard to how sales professionals can expand their business efficiently, and cost-effectively.

A great new resource for referral ideas has recently become available. "Automatic-Referrals" is a sales weblog that is devoted exclusively to the business of sharing ideas and best-practices in the realm of Referrals and Introductions. Assembled by the folks at "www.horsesmouth.com". Automatic-Referrals looks to be a valuable resource for all advisors, financial and otherwise, who seek to grow their practice the easy way.

As such, "Automatic-Referrals" bears The Prospecting Professor's seal of approval.

Targeted Referrals

According to Sean Bailey, the senior editor for Horsesmouth, the #1 referral strategy for financial advisors is to ask clients for referrals closely following a positive interaction with that client...preferred by 64% of advisors.  The second most popular approach, used by 52% of advisors, is to ask existing clients who fit the advisors' ideal profile if  they could  refer similar prospects.

The Prospecting Professor recommends a strategy called Targeted Referrals...an approach that is not inconsistent with either of the approaches outlined above.

When many advisors phrase their referral solicitation question, it begins something like this, "Who do you  know that...?" The problem with this phrasing is that it allows the client to wiggle out of an immediate response. In many instances the client can respond by saying,  "You know, that's a good question. Can I get back to you on that?" The advisor must respond by saying "Of course," yet too often the client never gets back to the advisor, and the follow-up never occurs.

Here's how a Targeted Referral is different. The advisor lays out a specific name, or names, of persons who are peers to the client...and asks the client if they know this potential referral, and if they would/could provide an introduction. For example, let's say that the client. is the owner of an asphalt paving company. The advisor has done some due diligence on the asphalt-paving industry and is aware that the industry is guided by a statewide association. By doing some preliminary research, the advisor can be much more precise in their referral solicitation request. As opposed to the "Who do you know...?" question, the exchange can be much closer to the following:

• Advisor: Mr/Ms Client...we have worked together for a number of years, and I have very much enjoyed our relationship together. I most appreciate working with business-owners like yourself because I strongly identify with the entrepreneurial challenges that you face.
• Client: Well...thanks. I've enjoyed working with yourself as well.
• Advisor: I was wondering about something...since you have been in the asphalt-paving business for a number of years, you must have a pretty good network with other owners of asphalt-paving companies.
• Client: Well...I know a few...in fact, ten years ago I was on the board of directors for the state association.
• Advisor: What a coincidence! I wanted to ask you about some of  the board members. I notice that the current president of  the association (Use the specific name here) lives quite close to where I do. I wanted to ask you if you would be willing to provide an T to the two of us?
• Client: I don't see why not.

Three things have happened here:

1. The advisor has demonstrated an interest in the client's industry, which the client should rightfully interpret as a compliment.
2. By using a specific name, the advisor decreases the likelihood of an "I'll get back to you..." response.
3. The advisor has requested an Introduction, as opposed to a Referral. From an advisor's standpoint, they are one-and-the-same. From the client's perspective, an Introduction is less threatening than a Referral.

Effective Targeted Referrals require that the advisor spend some time researching the industry/profession of their clients. Five years ago, this could be a cumbersome effort. Today, with the benefit of Google, it is a 15-minute task.