Referrals are the best way to build your advisory practice. Word of mouth marketing has been shown to be the fastest, most cost-effective way to bring on new clientele. Because it takes a lot less effort to win someone over if you’re already working with someone they know and respect. In negotiating terms, this is called leverage—and you should strive to always have it in sales situations.
And obviously, if you’re following best practices and providing exceptional client service, you should be getting referrals regularly.
But what if you’re not?
What if your referrals hit a lull—they’re withering—and that lasts for quite some time. (Always make sure you’re providing excellent service—through surveys and verbal follow-up with clients.)
But if your client service is excellent then it’s time to get to work on asking for introductions to people your clients know. This is a dynamic growth strategy regardless of whether you’ve got referrals coming in right now. The truth is, if you’ve got between $25 million-$50 million in assets under management, you probably have all the potential clients you need, sitting right in front of you in your client book. You just need to tap into the potential connections with your client base.
And here’s how you do that.
- Start mapping your client networks. I’ve written about this a lot, but it works. Take the top 20 percent of your clients (or just a handful of your favorite clients) and start a category list for each of them that includes the following:
- Community / Neighborhood
- Research and fill in the categories. This will take probably six months at least—or longer. But in each category, you can start adding names of people your clients know—or companies or institutions they’re aligned with that you’d like to explore as potential sources of new business. You should know who your clients’ family members are if you’ve probed them well and you interact with them and you know whom they talk about. So you know who their parents, siblings, and children are. That’s how you start. And you proceed down the list, asking “who do my clients know that I would like to get to know?” Maybe you know your clients belong to a certain community organization and you’d like to get to know the director. You can even ask your client to tell you about the people they work with. Start by writing down the names and connections!
- Ask for introductions. Once you’ve got the names, this is easy to do. You just bring up the person’s name. And your goal in asking for an introduction is not to gain immediate business, but to build your network. So you would tell your client: “Helen, so I know you work on the board of the United Way. Do you by chance know Barbara Hutchens? I’d love to add her to my professional network and get to know her. Many of my clients are looking for ways to give back to the community.” Your clients will be delighted to help you connect with the people they know if you approach is as “building a network.” Otherwise, it just looks like you’re gonna hit their friends up for cash.
- Build shared relationships. Your clients represent the building blocks of your business. And every person they know is a potential member of your own business development network. By researching the people your clients know, and the organizations they belong to, you’re going to find commonality points. You will find boards you can serve on, service you can provide, and networking opportunities. All of this leads to referrals. And new clients!
So, if you’re stuck in a referral rut—or really want to build your referral network methodically—try this approach!