Stop Measuring The Wrong Things And Boost Client Referrals

Most Financial Advisors are confused about referral terminology and incorrectly describe many things as referrals which aren’t referrals at all.  By using imprecise language things get confusing pretty quickly. Know this; there are six separate categories you need to clearly understand around this powerful concept known as referral marketing. 

The business objective is “being extraordinary” in your clients’ eyes.

Just for the record, for me, referral marketing means that if you want more referrals, you need to be more referable. The focus is on delivering extraordinary service, not on how skilled you are at asking, or begging, for referrals. You need to spoil your clients.  You need to do things that consistently exceed their expectations, and be remarkable. And by being remarkable, you’ll find your clients will begin to remark about you to other people, even when you’re not around. 

You want to create an army of clients willing to go out into the world singing your praises whether you’re standing there or not. Imagine your clients routinely saying great things about you when you’re not around. By serving clients above their expectations like this, human nature takes over, and your clients will tell the story about your fabulous service to everyone they know and love and care about. A beautiful thing, don’t you think?

The 6 Ways Referrals Are Often Confused

So let’s dive into the 6 categories around referrals, which confuse many Financial Advisors so that we only track what matters and can ignore everything that doesn’t matter. 

• 1. Tip: If a person tells you “you ought to call Tom billionaire who lives over by the country club” But doesn’t offer to contact them about you. 
  • This is NOT a referral. This is a Tip. 
  • I might make a note of the name in my Client relationship management software (CRM), but that’s about it. No other action required.
• 2. Lead: Instead, lets say a person says, “call Tom Billionaire” & also provides some basic info (name & phone number). 
  • This is also NOT a referral. It’s only a lead and it’s setting you up for a cold call. YUCK! 
  • I’ll certainly enter the names of leads into my CRM, but I don’t cold call. 
  • Why would I? If you follow my business model, you’ll never need to ever cold call. You’ll be too busy following-up with potential clients.
• 3. Recommendation: A recommendation involves someone telling another person that they should consider using your services. 
  • But, until your phone rings, a recommendation holds little value. You usually aren’t even aware it has occurred. 
  • Unless the potential client follows through, this is NOT a referral.
• 4. Referral: 
  • You’re identified by a person as a professional who may be able to resolve a problem.
  • The person introduces you or instructs the person that they are to expect your call.
  • When you call them it’s not a cold call, the person is expecting you and understands why you’re calling (Also, a person introducing you via email, while copying both parties in, counts as a referral).
• 5. Client Referral: A Client Referral is exactly as described as a “referral” above, except it’s one of your happy clients who’s referring you, rather than a non-client. Client Referrals are so important that you need to count them separately. 
  • We recommend every retail Financial Advisor build your entire business model solely around Client Referrals. 
  • While referrals from non-clients might someday become highly profitable for you, forget them at the beginning.  Focus all your effort on impressing your clients.  Become indispensable.  If you want more referrals, be more referable.
  • Stop investing all that time and energy in acquiring non-client referrals.
  • Instead deploy 100% of that time and effort into exceeding (current and future) clients’ expectations. 
  • With that Client Referral strategy, our data shows that most Financial Advisors yield substantially greater numbers of total referrals and will yield them more quickly. Has always worked for me.
• 6. Unsolicited Client Referral (THE JACKPOT): An unsolicited client referral is a recommendation to a person, when you’re not present, who actually follows-through and contacts you. 
  • Also, since a current client-initiated it, we designate it unsolicited CLIENT referral (UCR).  
  • UCRs are like golden eggs. 
  • The experience is something like this.  
    • Your phone rings. 
    • A potential client, you’ve never heard of, slowly explains that you were recommended.
    • They clarify that they’re ready to sit down and “talk business.” 
  • In your metrics, UCRs and regular client referrals, both count as “Client Referrals.” But, of course, the goal is to inspire, drive, and separately measure UCRs. You’ll measure the golden eggs separately. Duh. 

Think about this, if your meetings were impressive enough that each of your Ideal Clients provided one super-solid referral after each meeting, then you could be doubling your Ideal Client community every single year.  Perhaps every “super-solid referral” won’t become a client, but if 1 in 3  actually become clients, you’re in luck because if you’re having at least 3 meetings with each Ideal Clients annually, then you will double your Ideal Clients every single year.

Creating Your Own Golden-egg-laying Goose

The Team Goal: Most Financial Advisors don’t have teams and those who do don’t usually set goals for their teams. But you’re going to change all that. You’re not only going to build a skilled team, but you’re also going to get your team onto the same page as you by creating “The Team Goal.” 

Your team will establish many goals regarding many things they see as important. So, let them run.  

But eventually, your group will begin to think about goals for exceeding Ideal Clients’ expectations consistently. Now they’re on a roll. 

This is what I’m calling The Team Goal.  But, just like every other goal, it will require a method of measuring success. A metric so you know whether you’re on-track or off-track at exceeding your Ideal Clients’ expectations.

At this point, you’ll chime in with the solution for this “measurement dilemma” since the resolution is simple.  

Thankfully, data confirms the easiest, the best and the most effective way of measuring Client Satisfaction is by tracking Client referrals. 

Turns out, a continually increasing rate of Ideal Client referrals over the previous 12 rolling months is your best indicator of “Satisfied Clients.”

So now you know about the golden eggs, which are unsolicited client referrals. But you now also have “the goose that lays golden eggs” since The Team Goal creates a team that’s relentlessly focused on creating golden eggs at an increasing rate.

From now on you’re the envy of every major Financial Services Industry conference. You’ll not only be known there as the only Financial Advisor who was willing to make an effort to create a golden-egg-laying goose. But you’re also “that advisor” who never attends anymore. Instead, you send your entire team to the conference because you’re too busy laying on a beach somewhere.