Now Is a Good Time to Get Referrals
This article appeared in the Jan/Feb issue of the FPA’s Practice Management Solutions magazine
By Duncan MacPherson
Since September 2008, we’ve been on the phone constantly helping advisers adapt to these new market conditions. Many of them are somewhat shocked when we mention the concept of referrals. Most tell us that they feel that when things are so uncertain, it’s the worst time to get a referral. That to me is a self-fulfilling prophesy. And while working with existing clients is an ongoing task regardless of market conditions, I’m here to tell you-a good financial adviser is at his or her highest level of refer-ability right now.
Never before have money and all things related to the markets been more topical and never before have the friends and family members of your best clients been more open to listening to your clients brag about you than right now. Why? Because of the degree of doubt your clients’ friends have for their current advisers. This chaotic period has shattered the trust many people have for their financial advisers.
The Best Use of Your Time?
The question is: How can you take action so that you can tap into that reality? There are countless business development activities that you could be doing; the key is what should you be doing? In other words, what is the best use of your time?
Contrary to the old cliché, time is not money. Time is more valuable than money. If you think about the 80/20 rule, 80 percent of your productivity stems from about 20 percent of your activity. You make about 80 percent of your income every day in about an hour of focused effort. What goes into that hour?
This is what separates the best from the rest-the best don’t major in minor things. They focus on what matters most. They know that this is not the time to dabble or experiment on things that either aren’t proven or are difficult to quantify. Furthermore, they focus on client-driven activities that are multi-dimensional in terms of competitor-proofing, uncovering new assets and opportunities from existing relationships, and stimulating referrals.
Make the Calls
Do not be misled by the simplicity of this concept. There are far more esoteric and laborious activities out there, but this is an essential first and ongoing step. You have to launch, at the very least, a consistent, 60-day, proactive call rotation to your clients.
Simply take your client base-let’s say it is 300 clients-and divide it by 60. Take away weekends and holidays, and it means you are contacting five to seven clients a day through a 60-day cycle.
Perhaps you will narrow your focus and reach out only to the 20 percent of your clients who generate 80 percent of your business. You live by the rules you set. It’s up to you, but you have to do it. And then you do it again, and then again.
Aristotle said it best, “Excellence is a habit, not an act. We are what we repeatedly do.” This has to be a habitual action that becomes as natural as breathing. A lot of advisers initially brush us off when we suggest this idea because of its simplicity or because they’ve tried it before with little impact. But we often reveal that it’s not the action that was flawed, it was the approach the adviser used.
Be Interested and Create Dialogue
In order for your call rotation to make an impact, you have to differentiate yourself and connect on a different level. When you call your ideal clients, you’re not trying to be the bearer of any profound news, nor are you trying to sell something. You’re simply touching base to project strength and reassure them that you are the voice of reason.
The volume and velocity of noise out there is staggering. With the Internet, ’round the clock business news and all the so-called experts, knowledge is no longer power; it can be a black hole. In fact, we’re at a point where your clients are experiencing information fatigue. What to believe and who to trust is becoming blurry.
Remember, the products and services you provide, the firm you represent and your credentials are your message. You are the messenger. Too many well-intentioned advisers call their clients and begin data dumping them with more information. You end up swimming in a pool of sameness along with all the people trying to lure your clients away. Stand out from the pack. It’s more important to be interested than it is to be interesting.
To do that, ask your clients questions. The premise of “permission marketing” is that good questions engage your clients to the point where they opt in and give you permission to go deeper with a far more predisposed audience. If the conversation is a monologue, the client tunes out your attempt to impress them. With a dialogue, you are impressing upon them that this is a long-term relationship built on trust.
When it comes to good questions, use the acronym FORM as your guide. FORM represents the four key components to a balanced conversation with clients. Weave in questions about their Family, Occupation and Recreational interests among your Money and markets updates and insights.
It sounds trite, but facts tell; stories sell. Everything you say to a client is either a ‘me too’ that they connect with, or a ’so what’ that they detach from. If you make it about them, you strengthen chemistry and trust-both of which create the foundation for loyalty and refer-ability.
Ask Good Questions
In conversations with your clients, simply ask this question: “How are your friends and family members coping during this period of uncertainty? Are they facing the future with anticipation or apprehension?”
Not only does this question convey your sincere concern, it also opens up the conversation for you to go deeper. Simply follow-up with this question: “If you don’t mind me asking, when you talk about me with a friend or family member, what do you say? How do you describe me?”
There is a good chance you aren’t going to like what you hear. And here’s the point. If your best clients can’t describe you to you, what are they saying when that moment of truth presents itself and a friend asks them, “Are you happy with your adviser, because I’ve just about had it with mine.” You want your client to know what to say, and you may have to coach them to that end.
And to do that, simply say this:
I’m asking you these questions because I want to remind you of a value-added service that I provide for my clients that many really find to be of value. I make myself available to act as a sounding board for friends and family members of my clients. Now I’m not asking you to think of anyone right now, this is simply for down the road, but if someone asks you about me or you feel compelled to introduce a friend or family member to me, give me a call and get the wheels in motion. I don’t want to claim miracles will occur, but I have a really helpful process and one of two things usually happens when I meet a friend or family member. I either validate for them that their current plan is fundamentally solid and they need to tough this out, or I reveal a few flaws that need to be adjusted, and as you know, minor adjustments can often lead to major improvements down the road. And just so you know, anyone you introduce to me does not need to become a client to take advantage of this service. But either way, if they are a friend or family member of yours, I will make myself available to act as a sounding board for them.
The key to this approach is that you are positioning the concept of a referral as a service you are providing, rather than as a favor you are asking. When an adviser says, “I’m trying to grow my business and I’m looking for new clients through referrals,” he or she looks needy and in some cases, downright desperate.
You can’t bring your needs to your clients; it’s just not attractive. You can only bring your value. And remember, it’s not what you say, but rather what clients hear that really matters. When you use phraseology such as “service,” “value,” “process” and “introduce,” you become far more compelling, memorable and of course, refer-able.
Duncan MacPherson is co-CEO and co-founder of Pareto Systems and Pareto Platform. Find his blog on LinkedIn under his name, follow him on Twitter at Duncan8020, and find more resources at www.BreakthroughBusinessDevelopment.com.