Five steps to securing good quality referrals

Jane Cuthbertson

Most advisers know referrals are one of the most effective methods of growing their business yet many still struggle to get them, let alone good ones. In our experience, too many firms do not even have a referral strategy in place. So, where do you start?

Here are five ideas to consider in order to achieve more good quality referrals.

1. Know who to ask

Clients tend to refer people like themselves, so will often refer down or across but seldom up. With this in mind, to ensure you get the right quality and type of referral, look to the top end, most profitable clients you most enjoy working with.

2. Know when to ask

We have come across advisers who ask for referrals at the first meeting with their clients but we believe this is too soon. In the early stages of the relationship your client does not have sufficient experience of you to be in a position to honestly recommend you. Asking too early on can also be a complete turn off.

You have to have earned the right to ask. The best time to do so is when you know that clients are happy with your work, such as when they provide positive feedback or when they have been a client for some length of time.

3. Know how to ask

There are many subtle and professional ways to kick off a referral conversation: you do not have to go straight for the jugular. Ice breakers along the lines of: “Which elements of our service do find the most valuable?” or “You’ve been a loyal client for a long time now. Why have you stayed with us for so long?” can start a conversation that can lead to you asking whether they could refer you. This also gives your clients the opportunity to feed back areas for improvement, which, if taken on board, can lead to an improved client experience for all and, in turn, even more referrals.

4. Make it a habit

Part of your referral strategy should include how, where and when you ask. The strategy should be adopted by all of your advisers and the approach should be consistent across the business.

Include appropriate text in your email signatures, letters and newsletters to make sure clients can see that you welcome referrals.

5. Help them to refer

Help clients to help you by providing guidance on how they might frame conversations with others about a referral. A short “script” that explains what you do and how best to refer you helps to make the process more like a friendly introduction rather than a big commitment.

You need to remain front of mind when the topic of finances comes up between your clients and their friends. As well as including reminders in all your communications with clients, you could also give them some referral cards or business cards.

Remember, underpinning the opportunity to get referrals is delivering value and an excellent service to your existing clients. Get that right and it is easier to implement a successful referral programme. Clients who refer you are putting their reputation on the line. They are expecting you to deliver (and you absolutely have to), otherwise you jeopardise your existing relationship too.

For many advisers the subject of referrals seems to have some sort of mysticism about it, as if those who are successful at getting them possess a hidden gift or talent. Amazingly, some advisers just never ask and are leaving their business to grow more slowly than it otherwise might. Sure, confidence plays a part but as the old adage goes: if you don’t ask, you don’t get.

Jane Cuthbertson is a chartered marketer and associate consultant with Steve Billingham Consulting