The Definitive Guide to Referrals for Professional Advisers

Appointment by Referral Only

Bernie Madoff had written on his business card “Appointment by Referral Only” and I’ve known many Independent Financial Advisers to have this embossed in gold on theirs. Now I’m not condoning Bernie of course, he’s a crook, but the impact of exclusively building your business from referrals and introductions from clients is nirvana for professional advisers.

I love referrals in my business, which is professional advising like yours. It ticks all the boxes. A 90% closing ratio, they follow your recommendation without hesitation, a very low cost of sale enabling superior client service, removes risk from the client’s perspective, little or no competition and you’re able to reciprocate to your clients in the form of recommendations for their business.

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Who Wouldn’t Want Referrals?

Far too many of us operate the “Pray and Wait” methodology. I’ve met many an IFA who has been in business for over 25 years and received organic referrals on a regular basis. And why wouldn’t they? 25 years of servicing clients and you’ll be blessed with organic referrals, in other words, clients in their own initiative, make referrals. It’s not a managed service.

If you’re looking to expand your business and increase your client bank or you’re new to an area or business, then adopting referral management system is a must.

Like all business model changes, you have to believe in it. I’ve trained hundreds of professional services people, who agree wholeheartedly in the concept of referrals, but when it comes to asking clients, they shy away. “Too pushy, too sales’ey, it feels awkward, they’ll refer if they want to” are just some responses.

Let’s eradicate this Inner Game thinking first.

Belief Systems for Referrals

Do you have an abundance mind-set, a belief in feast? This is where you believe wholeheartedly in what you do and the immense value it brings to clients. You offer a superior service, you do a great job and you truly are an expert in your field. This self-confidence comes with time, don’t wait to receive validation from external sources or feedback… you are valid.

The acid test is this. If you were in the market for the professional service that you provide, you would buy from you wouldn’t you?

My research and work in professional services fires up the following beliefs that support an abundance mind-set:

  1. I’m responsible for the outcomes of my role
  2. I’m good at solving client problems and issues
  3. I feel good about myself and my abilities
  4. I have rugged self esteem
  5. I’m an expert in my niche
  6. I’m clear of the value that I bring to the table
  7. I want to build my client’s businesses and be regarded as a trusted partner
  8. I’m here to build long-term relationships with clients
  9. I know I can add value to clients
  10. I know what I want
  11. Even if I don’t make any sales, I’ll feel good about my performance.
  12. Change is good
  13. I compare very favourably with other professional services people
  14. I am confident in what I do
  15. I believe in the bigger picture rather than the detail
  16. Stepping outside my comfort zone is scary but vital for my self-development
  17. I am capable of keeping abreast of all industry problems and challenges
  18. I believe in sometimes asking really tough questions and enjoying the silence
  19. Everything I do adds value to clients
  20. I wholeheartedly believe that to grow my business I can achieve this exclusively with a proactive referral management system.

The last belief is the cornerstone to being successful with referrals. If you feel you want and need to adopt this belief and own it, then here’s a little bit of Neuro Linguistic Programming (NLP) to help. It’s about questioning away the belief first.

Write down below your current belief around adopting and succeeding in a proactive referral system. Go on and be honest.

Now ask yourself these questions or better still, get a colleague to do so. Verbalise the answers, don’t dwell on them too long; answer all the questions within 5 or so minutes. Be honest with the answers.

  1. What is your limiting belief?
  2. Does this belief help me?
  3. What examples can you think of when your limiting belief was not true or didn’t apply?
  4. How is this belief ridiculous or absurd?
  5. What caused you to have this belief in the first place?
  6. What’s the consequence of having this belief?
  7. If you keep this belief, what will it cost you in the future?
  8. For whom is this belief not true?
  9. Do top performing professional advisers have this belief?
  10. How would you know if this belief were false?
  11. What was the original purpose for having this belief?
  12. What do you want to believe in instead?
  13. What would be the advantage to you of having this new belief?

Now we have the right mind-set, we need the appropriate context for setting up a referral management system. Professional advisers who have this nailed regard clients as partners. I like that – it’s equal and smells of reciprocity – if they help you, you can help them with referrals. After all you are partners now. It’s a nice touch, when at the end of the first dealings with your client, you begin to refer them as a partner.

The Context for a Referral Management System

To conquer the “needy” mind-set, advisers set a context of scarcity. They’re not desperate for new business, they are proactively expanding their client bank but only allowing one or two more clients in.

I admire the scarcity mentality which increases desire – Cialdini’s influencing strategies – a classic. Expanding the business entails heavy marketing spend and time which takes them away from servicing clients.

Referrals are a very low almost nil cost of sale, and reward the client by knowing that the people they refer can have access to you. Access which they’ve enjoyed and had tremendous value from. It’s this context setting that happens early on. It’s logical, compelling and ultimately successful.

Referral Management Aphorisms

  1. Clients should know how they benefit from being a partner and helping each other with referrals.
  2. Clients should be crystal clear of the type of clients you help best. Does anyone know anyone called “anybody” so why ask them for anybody.
  3. Clients should be aware of all the value you provide, not just the segment of your expertise that they’ve benefitted from.
  4. Clients should know exactly what you’ll do when they lay on a referral. Use the “non-sales just and exploratory approach”. They don’t want you to steam in a force sale their referral. This is one of the greatest hurdles in the client’s mind to prevent them offering a name. “I’ll fix up an exploratory meeting on my dollar, no pressure, see if there’s some synergy and I’ll feedback to you. They’ll be in good hands”
  5. Be pure in your intentions.

Referral Management System

There’s a small river which blocks my way to my local pub, the Red Lion, called the River Chelt. When the water levels are low, there’s one place you can cross. It comprises 3 stepping stones and ensures a dry crossing every time. If you try and jump the river, you’re virtually guaranteed to get an early bath.

This analogy works in the world of referrals.

However, many of us are reticent to ask, customers putting us off by saying they’ll have as think about it. You see, it’s too much of an ask all of a sudden, it’s like jumping the river, you’ll fall in.

Instead adopt a stepping stones method.

Let me give you an example. Last week I bought a small gadget that attaches itself to my broadband router and feeds extra Wi-Fi from my phone when I need it most. It’s boosted my speed by 3 times, pretty cool.

I “live chatted” as I had a couple of questions to ask. I said thank you for their help and the chap typed back, it was a pleasure to help with any query as they valued customer service since most of their new business comes from referrals.

Seed sown and the first stepping stone.

Next the installation, where you “live chat” them again as it installs. It worked perfectly and the chap typed in. “If you’re pleased with the service and results, would you be so kind to give us a review on Trust Pilot.” I was pleased so I did.

Feedback given and stepping stone number two.

Finally a follow up email came in asking if it was working well. I replied back yes and the next email offered me a voucher if I was able to refer two friends to them. I did.

Stepping stone number three and success.

If they had just waited until the end to ask, I doubt if they would have been successful. They also used reciprocity to make me owe them a favour. Clever.

It really does work too and eats very little of your phone’s expensive data. Thank you Boosty.

My two dogs ignore the stepping stones over the River Chelt, they love to cool down in the cold waters, have a look.

Sowing the Seed

Picture the scene. Janine is in her client’s office, he’s the CEO of a local firm and he’s contacted Janine to discuss loan finance for the expansion plans he has for his business. The meeting went very well and Janine has further meetings with their firm’s accountants.

Janine “Brian I think this has been a fruitful first meeting don’t you think?”

Brian “Yes, interesting and I’m keen to explore further what you can do, let me know how you get on with Shelley”

Janine – “Of course I will. Before I leave though, can I say it’s been a pleasure, I believe I was referred to you from a colleague and that’s an excellent way to do business. Here at Jupiter we put a lot of our focus on client referrals rather than spending time and money on marketing effort preferring to be very competitive with our lending. We’re going through some extensive expansion plans just like you and we’ve decided to focus our attention on referrals to build our client base, that way Brian, I can spend all my time with you and my other clients.”

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Brian “That makes total sense”

Janine “So when we get to the ‘I’m impressed stage’ you might feel comfortable to look through your network to see who might benefit in the same way as you have. But we’ll wait until then, because I’ve got to concentrate on impressing you first”

Brian “Janine that’s excellent, great to meet you today”

Janine “Same, shall we LinkIn in the meantime, I’ll send you a LinkedIn request later, if that’s OK”

Brian “Splendid.”

Seed sown

Value Discussion

Last weekend we had some friends over for a couple of days. The morning of the night before, we all sat around having breakfast at the local pub, the Red lion of course, and the discussion turned to the Olympics. As you know the Brits did good, coming second in the medals’ table to the mighty USA. We shared some personal memories of the games chewing on our sausages and celebrated together with the bacon.

We wallowed in the success of the Brits. And that’s the value discussion. It’s a short agenda item where you ask the client about her value, what outcomes has she achieved with your advice, what has the value been like. It’s all about timing, have the value discussion when the client has experienced first-hand the value you provide.

Picture the scene. Email calendar invite from Janine:

  1. Agree next stages
  2. Value discussion

Janine “Last item on our agenda Brian, the value discussion. I’m really curious at this stage what value you’ve gained from our work together, do you mind me asking?”

Brian “ummmm, interesting question. On a results driven piece you’ve met my demands for the lending proposition and I really valued the way you explored our business here and the time you spent with the team especially Shelley and her team. You’re competitive which is vital for the targets to fit and I’m looking forward to this continuing. All in all Janine, I’d say you’ve delivered for us”

Janine “That’s great to hear, has there been anything you weren’t expecting and valued?”

Brian “I have a saying here at Acal ‘over promise and over deliver’ rather than the under promise version, we like to give our customers a delightful experience. Hand on heart Janine, I think you’re achieving that which is why we agreed to do the business with you”

Janine “Wow I’ve not heard the ‘over promise and over deliver” phrase, nice. Brian, can you remember earlier when you sought some references for myself and the bank, you were keen to eliminate risk at that early stage, weren’t you. Could I call upon you for a reference that I can use with future clients that would be so helpful?”

Brian “I’d be delighted. Do you have a template I could use to save time?”

Janine “Yes, I can email it over to you. You can edit it if you wish, it’s just a start to save you time. And if you could put it on headed paper, I’d be grateful”

Brian “Leave it to me, if you email it to Penny, and give her those instructions, I’ll sign the bottom”

Janine “Thank you and look forward to meeting again next week when we finalise everything”

References, testimonials, net promoter scores come in various guises nowadays but the value of a third party endorsing what you do is immeasurable. Testimonials can go on LinkedIn,,,

The Introduction

Janine “Well Brian that about wraps up the details, if you can get the FD to countersign we’re good to go”

Brian “Excellent”

Janine “Brian do you remember a short while ago when we first met, I mentioned that Jupiter are going through an expansion phase and to ensure our products remain competitive and our service personal, we’ve decided to grow with partner referrals”

Brian “Yes I do, I was particularly impressed with your strategy, it made sense to me”

Janine “As a business partner, which I refer you as, I’d like to talk to you about that right now because your name would add a lot of weight, is that OK, it’ll take around 10 minutes”

Brian “Shoot”

Janine “My specialist field is electronics which is why I’m working with you; I find it easy to understand the sector with my experience. I’ve a list here of various firms from this sector in this area, I’ve been conscious to ensure they’re not competitors with you. I was wondering whether you had connections in these firms you could introduce me to?”

“Before you answer that Brian, let me outline what I would do if you were able to refer a connection to me. With all referrals, I offer them a pure exploratory meeting on my dollar, no pressure, I’m not going to sell anything, just show them the kind of value that I provided you. I believe in synergy, if it’s not there then we’ll say our farewells and move on. How does that sound to you Brian?

Brian “I’d have expected that but it’s reassuring to know. Let me have a look at your list… uhmm… no, no… yes, I know Philip at Zynia he’s in Round Table with me, I’d be delighted to make a referral”

Janine “Thank you Brian, there’s a few more companies on the next page… ”

Many professional advisers make the grave mistake of asking for anyone that you know. This is an error. No one knows a person named anybody. It’s wrong in two areas. One, it often leads the client to put you off saying they’ll have a think about it later, and to avoid any conflict, advisers move on from this. Secondly it doesn’t help you because you know your ideal client, your sector, your niche and having to spend valuable time on an “anybody” is not a good use of your time.

Has anyone ever heard of someone called “anybody” – it’s ridiculous.

Other strategies that work at the introduction stage:

  • Use the LinkedIn connections from your client. You would have linked in at an early stage, take a look at their connections and pick out specific people you would like an introduction to. This can be done face to face with your client in a similar manner to Janine’s meeting or you can use the LinkedIn engine to automate the referral.
  • Talk about the client’s own business. Other departments, subsidiaries or their supply chain. That’s bound to jog their memory.
  • Make the client feel OK with this by suggesting: “to jog your memory Mike, here’s a list of my ideal types of clients.
  • Reciprocate. Offer to provide the client with a referral from your network. Now they’re a true partner.
  • And above all remember to maintain control of the referral management, don’t leave anything to chance.

Janine “Thank you Brian. Let’s summarise the next steps. You’ve agreed to phone Philip to expect my call, I’ll do that and fix up an exploratory meeting to see if I might help with his plans and I let you know how I get on.”

When Brian phones Phil.

Brian “Phil, it’s Brian, no it’s not about Saturday’s paintball. I’ve given your name to Janine White from Jupiter, she’s the best loans adviser I’ve ever come across and I know you’re looking to expand in China. She’ll give you a call, make sure you do everything she says, follow all her advice and pay her whatever her fee is. You won’t be disappointed. Now Saturday… ”

Referral Nirvana.

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