Word of mouth communication remains one of the oldest but most vital tools available to us in business generation.
That said, too often our old school funnel approach to marketing seeks to put random people in at the top and trust that loyal customers come out at the bottom, telling all and sundry about how wonderful we are.
That is the obvious (and ineffective) path of outbound marketing. True loyalty, though, usually comes from within, from a story we like to tell ourselves and others.
We are loyal to football teams, products and people because being loyal makes us happy. Why else would anyone be an Arsenal supporter for the last 14 ground-hogging seasons? Some customers like being loyal. Those are good customers to have.
So you need to tell a story that appeals to loyalists. To generate the right referral you must first make yourself referable by developing a simple, powerful value statement that both resonates and can be re-told. Sounds obvious, or even twee, but you would be surprised how often one is missing.
There is much more to it than a punchy raison d’être. Much rests on circles of influence and the 52 rule. Research shows that each of your clients has an inner circle of approximately 52 close friends and family who form your best possible list of prospects.
People within these inner circles share demographic characteristics and have similar needs making them easier to target. Broadly, every advisory business has: suspects, prospects, customers, clients (‘honeymooners’ and more long-standing ones) and advocates. The latter three groups are the key to unlocking referrals but will need to be targeted very differently.
And so a more structured approach than perhaps we are comfortable (or see then value in) is a must. Be intentional about asking for referrals ahead of any client meeting; build referral teams; schedule meetings to discuss who is referring who; set up an advocate committee with clients; and thank your referrers – surprisingly it just does not happen often enough.
The world is becoming far less deferent to single sources of authority and increasingly influenced by broader, more personal sources. With every man and his dog purporting to play in the £100,000-plus assets under management pool, what will truly differentiate your business? Why should your clients recommend you, why should prospects come to you, why should professionals partner with you? And, more importantly, what can you do to facilitate this?
Phil Wickenden is managing director of Cicero Research