Thank you for your questions. Second question first; While there are many aspects of building a referral business, the two general areas of referrals are exactly what you mentioned above; referrals from those not yet a client and from current client to new prospect. Both, of course, are important. The "Endless Referrals System" works with both.

Regarding techniques . . . I'm not really sure how to answer that in one posting. :-)  However, It certainly all begins by doing those things that elicit the new people you meet to know, like and trust you.

I call this The Golden Rule of Networking: "All things being equal, people will do business with and refer business to, those people they know, like and trust.

When we approach every new person we meet from that premise then every action we take springs from that foundation.

Thank YOU. Again, I'll go second question first. :-) Yes, "being referrable" is certainly very important. My good friend, Bill Cates (www.referralcoach.com) talks about that quite often. Check out his bestselling books, "Get More Referrals Now!" and Don't Keep Me A Secret" where he provides wonderful explanations on that topic as well as key information overall for cultivating your referral business.

Without actually "being referrable" one would certainly destroy their network just as fast as they are building it, so that is absolutely baseline. I have no doubt that anyone subscribing to AdvisorMax - by the very nature of the fact that you're wanting to improve yourself and the service you render - is referrable. The key is to help leverage that referrability into obtaining those A-list referrals.

In answer to your first question, there is indeed a difference betweeen referral marketing through clients versus through other COI's that are not actual clients. One difference is that, while the CIO might "know,like and trust you" , they still don't come from the viewpoint of a raving fan client who has personally experienced the benefits you are bringing to their lives.

None the less, both are great to have; both are important to have. And, those COI's lead to the first type. What an FA would do the same with both is continue to focus on - not only adding value to their lives  but - communicating that value.

In the case of the referral source who is a current client, you continue to do those things that demonstrate the wonderful service you are providing.

With a referral source or potiential referral source who is a COI, you communicate that value in many ways, including getting information to them that you promised, following up with them as you promised, connecting them with others whom they'd find to be of value to their lives, and all the other ways you've learned.

Remember, while it's ideal to constantly add value, you must also communicate that value. Of course, you can't do that by saying, "look at the value I'm adding." :-) But you do it in such a way that your very actions elicit the 'know, like and trust" feelings toward you.

I think part of having endless referrals is to actually expect them. 

Unfortunately, many advisors are afraid to ask for referrals as they feel they will make their client uncomfortable and risk "losing the sale".  They also feel that if they ask for referrals their client will view them as unsuccessful by asking for "help".

While I don't ask for referrals to the same extent as I had in the past, often, my clients will be excited to have me contact their friends and colleagues. 

Yes, we change lives and bring value to our clients.  Once we forget that fact or no longer believe it's true...it's game over.

While many younger advisors might not feel that they are experienced enough, seasoned agents and advisors are often more than willing to share ideas or do joint work.  I have also found as much as you might think a prospect knows, once you meet with them, you will always know more.  I have yet to find even the wealthiest client with the "perfect plan" and it been almost 20 years!

Larry

Thank you for your comments. Let's look at them one at a time.

Larry wrote: I think part of having endless referrals is to actually expect them. 

I agree. And, along with that, is the skill-set of knowing how to ask correctly, which we can get into in another post if you'd like. Positive expectation certainly goes a long way. Combine that with knowing how to ask correctly , however, and it makes you pretty much unstoppable. On the other hand, using the wrong language when asking can stop a potentially referral-laden situation right in it's tracks. (Think: "I can't think of anyone right now but, when I do . . . I'll call you."?) :-).

Larry wrote: Unfortunately, many advisors are afraid to ask for referrals as they feel they will make their client uncomfortable and risk "losing the sale".  They also feel that if they ask for referrals their client will view them as unsuccessful by asking for "help".

Those are great points, Larry. I find that there are several fear-based reasons why Advisors won't ask. For reasons of space I won't go into detail but we can take these individually in future postings. The reasons are generally:

1.Fear of rejection

2. Fear of talking past the sale

3. Fear of making your new client angry

4. Fear of coming across as needy (or pushy)

5.Fear that you are not worthy of referrals

6. Fear that you don't know how to ask correctly

Fears #1-5 are mindsets (which, again, we can discuss specifically in future posttings) and fear #6 is a skill-set (which we'll definitely discuss in future postings) 

Larry wrote: Yes, we change lives and bring value to our clients.  Once we forget that fact or no longer believe it's true...it's game over.

Exactly. As Zig Ziglar (www.ZigZiglar) explains (paraphrased): "You've got to believe that what you offer is so valuable that when they buy, THEY are getting an even better deal than you are."

Larry wrote: While many younger advisors might not feel that they are experienced enough, seasoned agents and advisors are often more than willing to share ideas or do joint work.  I have also found as much as you might think a prospect knows, once you meet with them, you will always know more.  I have yet to find even the wealthiest client with the "perfect plan" and it been almost 20 years!

Those are great points that I hope all young Advisors take to heart. Thank you, Larry!

I have found this conversation both valuable and insightful.  Thanks for your time on Advisormax.

You mention the potential for a discussion about how to ask in another thread.  I think those of us following the conversation would love some ideas about what "the right way to ask" for referrals is.  Can you share your thoughts on this?

In this posting we are jumping way ahead; to the point in the relationship where you have earned the right (in both your own mind and – you’re very confident – in theirs, as well) to ask for and receive referrals.

The next step – after obtaining agreement for them to provide referrals (we’ll actually review how to do that in a future posting utilizing what I call “The Referral Bridge”) – is to ask correctly so they can provide names instead of their having to tell you, “Well, er . . . I can’t think of anybody right now but, when I do, I’ll call you.”

And they’ll probably answer that way, if you ask the way so many people do; by saying, "Do you know anyone who . . . ?" Or "Who do you know who . . . ?" Both elicit that same basic response.

The reason is that, either way, you're asking them to pick people out of a crowd in their mind of about 250 people (the average person’s sphere of influence). It's like being asked if you've heard any good jokes lately. It’s often difficult to just pick one out of thin air.

I learned years ago from the great sales teacher, Tom Hopkins, author of the classic, How to Master the Art of Selling (check out www.TomHopkins.com),  that the key is to isolate. Isolate people they can "see" by narrowing their frame of reference.

Let’s look at an example (we are assuming you’ve already communicated to him the general profile of the type of person you are looking to work with):

You: Dave, you're an avid golfer, aren't you?

Dave: Yes, I am. I play every weekend.

You: Hmm. Is there a specific foursome you play with?

Dave: Absolutely. Harry Browne, Michael Cloud and Dr. Mary Ruwart.

You: Dave, would any of them seem to be . . . ?"

Another Frame: We know Dave is a Rotarian. Instead of asking if "anyone" in Rotary would be a good prospect (that's still too large a group), try:

You: Are there one or two people in your club that you tend to sit with every meeting?

Dave: Just one; Mike O'Brien. Been friends for years.

You: Do you feel Mike would be a good candidate for . . . ?

Have three or four specific frames of reference that you know in advance you are going to ask. All it takes is one name to trigger off an avalanche of referrals. From there, keep proceeding as appropriate. There are other frames of reference, of course, that you could utilize, as well, including neighbors, fellow religious congregants, association members, hobbyists, etc.

For the sake of this example we are assuming generical financial planning as opposed to a particular product or a referral within a niche market. We're also assuming the Do Not Call list is not an issue.

Receiving a referral is one thing, but setting the appointment with the referred prospect can be quite another. Let’s discuss a method of dramatically improving the odds that you’ll get the appointment once you’ve received the referral?