They’re Not Mind Readers!
By Martin R. Baird

I’m surprised at the number of times I’ve had financial advisors tell me their clients should “know.” Every time I hear it, I’m so surprised you could knock me over with a feather. You need to understand that people don’t “know” unless you educate them. Clients do not have a sixth sense that allows them to know what you want.
 
Most clients don’t “know” or think about the fact that you want referrals. They don’t spend time thinking about how referrals help you and how much you appreciate them. Most of us focus on what’s important to us, not what’s important to others. I’m not saying everyone is like that, but the majority are. Think about it for a moment. When was the last time you thought about giving referrals to your plumber or landscaper? If they’re not a family member or a friend, it’s probably been awhile.
 
As I said, the way to get your clients to think about giving you referrals is to educate them. Great advisors invest time educating their clients because it pays huge dividends in the future. And one of the areas you need to help your clients with is definitely referrals. Help them learn why it’s in their best interest to give you more business.
 
Please note that I said why it is in their best interest, not yours. Most clients don’t care if you have a new car. They care about what is in it for them. For example, if Mr. Smith refers family or friends to you, he has done these people a very big favor that they won’t forget. Another way to look at it is that you are more likely to be around to continue doing a good job for Mr. Smith if you can increase your client base and grow your practice.
 
One of the keys to educating your clients is understanding that it’s a process and not an event. Education doesn’t start and stop. It’s ongoing. The education process about referrals should start at your first meeting. It can even start if you decide you don’t want them as a client. How about that for a thought! Just because they’re not the perfect fit doesn’t mean they don’t know people who would be.
 
Setting the expectation and explaining that referrals are a part of the relationship from the first meeting is a great plan. When people are new to your system, they’re open to new ideas. It’s easier to teach them the rules up front than it is to try to change their behavior later.
 
Another point I want to make is that rewards and incentives are a great way to motivate change. It’s amazing what people will do for an inexpensive reward.
 
Now is the time to transform your clients from mind readers to referral gods and goddesses in training. The sooner you start their education, the sooner you’ll have a system in place that keeps new clients coming to you.
 
When it comes to referrals, one of the easiest ways to get more is to ask. I want to share with you some of the referral-generation methods we’ve heard about over the years. If I knew who invented them, I would give them credit!
 
And when it comes to asking for referrals, it’s important that you are comfortable with it and that you put your own spin on it. It’s also important that you practice so it becomes your own. One of the hardest things to do is to try to be someone else.
 
OK, here are some of my favorites.
 
This is an easy way to ask without asking. What you do is frame a bright-colored sheet of paper with a large “R” on it. You place the framed “R” behind your desk so your clients and prospects see it while they’re meeting with you. At some point, they’re bound to ask what is the “R” for?
Now is your chance to share with them that you would like to help their friends and family, too. It’s a great way for your client to bring up the idea of referrals.
 
I also like using reverse referrals. When you do this, you show your client a list of people who are in the same industry or the same country club as them and then ask who they know on the list. This avoids the problem of people saying that they don’t know anyone. You can find lists to use in business papers or in magazines.
 
My last one is having client birthday parties. If you invite a client out for a birthday lunch, they get to invite four friends. This is a great way to meet four new people who may have similar problems as your current client.
 
Referrals are one of the most effective ways to grow your business, and they can usually be generated with very little up-front cost. To get more referrals, you need to educate your clients about why they want to give them to you. This is an ongoing process that works better if you start today.
 
Probably more than 80 percent of our speaking engagement clients come from referrals and the reason is that we ask. As soon as someone says they liked our program, we ask for a referral letter. Simply asking has paid huge dividends for us and it can for you, too!
 
Martin R. Baird is chief executive officer of Robinson & Associates, Inc., a consulting company that helps financial professionals measure and manage the quality of client service and improvements to their internal operations to enhance business performance and increase revenues. He is a highly regarded speaker in the areas of marketing and client retention and development. Baird is author of “The 7 Deadly Sins of Advisor Marketing,” a book that offers easy-to-implement marketing ideas for financial professionals. He may be reached at 206-774-8856 or mbaird@raresults.com.