One of the biggest challenges you will face in the New Year is likely a familiar one: how to drive referrals to help you build your business.
Gaining referrals is a science that cannot be perfected easily, says Julie Littlechild, president of Advisor Impact Inc. in Toronto. But a few key steps can significantly increase the likelihood that clients will recommend you to relatives, colleagues and friends.
To boost your referrals in 2013, Littlechild says, think about what motivates clients to make a referral in the first place: "The tactics need to be about expressing value in a way that your clients actually think about value."
To help you boost referral in 2013, Littlechild offers the following suggestions:
1. Demonstrate your value
Based on Littlechild's research, clients typically make referrals to help a friend or colleague, not the advisor.
"Thinking about that simple statement," Littlechild says, "could change the way we think about referrals completely."
Framing the referral question as a request for a favour to you is ineffective because clients often are unable to think of someone who needs your advisory services.
Instead, incorporate a value-driven skills approach to tap into a client's specific needs. For example, present your skills as a retirement planning expert or as someone who is very familiar with disability insurance. Your goal is to make the client feel he or she would be doing a friend a favour by making the referral.
"Show how you've changed lives for the better in very specific terms," Littlechild says. "People will refer you."
2. Get some feedback
Ask to meet with your top clients for 20 minutes to get their feedback on how they would describe your value and how your services have made a difference for them.
Listen carefully to the language they use, Littlechild says, because those words will help you build an effective story on how to communicate your value to others.
3. Focus on your engaged clients
Most of your referrals are likely coming from your most engaged clients, says Littlechild, so why not focus more of your attention on them to drum up new business?
"The notion of trying to generate referrals from [clients] who are disgruntled or complacent with their finances is probably like hitting your head against the wall," she says. "They probably aren't open to that conversation."
In contrast, clients who are engaged and financially literate are more likely to appreciate your value and recommend you.
4. Make an introduction
When clients do make referrals, Littlechild says, only about 12%-14% ever bother to formally introduce the advisor to the prospect
Make it easier for your client by telling him or her how you would like to be introduced. For example, suggest your client send an email to you and the prospect. Alternatively, you could add the referred prospect to your distribution database so he or she can get your newsletters or market commentaries.