Positive word-of-mouth marketing is one of the strongest and most effective ways to strengthen your prospecting efforts. Studies have shown that more than half of the sales opportunities generated as the result of referrals end in a sale. The act of recommending someone to another person is a form of endorsement in that individual, and it naturally provides a level of credibility you can’t get from other marketing techniques. It removes the potential barrier of trust in the person being recommended and can build rapport more quickly.
The question then arises: How do you effectively leverage this concept and approach your clients to ask for referrals? The following examples illustrate some ways to generate referrals.
Ask for Them
This may seem simplistic, but you would be shocked by how many financial professionals we speak to on a daily basis either don’t ask for referrals or, if they do ask for them, don’t do anything with the referrals once they have them. If you are an honest, hard working, successful financial professional who has built rapport and trust with your clients, they should have no reservations providing you with the contact information of their friends or family members who may benefit from your services.
Tip: Make a bigger impact by suggesting that your clients reach out to the referral first, provide an introduction, and ensure that the referral is open to be contacted. Then they can provide you with the contact information. Not only are these referrals a “warm lead” because they’ve said “yes,” but they will be primed for the conversation when you contact them.
Make It an Event
Host a client appreciation event and request that your clients bring a guest (other than a spouse). Most people associate with like-kind people — similar age groups, income brackets, home values, etc. By hosting an event that allows your clients to bring like-kind prospects, you are not only generating referrals but are getting to meet them face-to-face during a special event that will reinforce the kind of professional firm you operate.
Tip: The event should be something fun and classy. An evening on a dinner cruise, a private tour of a winery, a nice dinner at a location your target market would enjoy. You should kick off the evening with a short “welcome” speech and then mingle with all the prospects and guests during the event. Close the event by thanking them for coming and perhaps giving a very short (and appropriate) commercial about your background and your firm. Be subtle and let them enjoy their evening out.
Host a Table at an Upcoming Workshop
One of the most effective ways to build trust and rapport is to conduct educational workshops that educate prospects about money management. One technique that works well is to hold a dinner seminar and ask your clients to host a table. Typically, you would seat six to a table for this type of event. Assuming your clients bring a spouse or personal guest, that would leave four spots for them to fill at each table — essentially two couples. Conducting an educational workshop with clients and referrals in the room allows you to showcase your financial expertise. If the material is powerful and you are a charismatic presenter, this technique should persuade your referrals to take action and contact you.
Tip: Although the primary purpose of this type of prospecting event is to get in front of qualified referrals, don’t discount the opportunity you have with your existing client base. Unless you have all the investable assets of all your clients, your seminar may offer some additional ideas that could make them seek additional services from your firm.
It makes no difference whether you are clever in generating referrals or simply ask for them. You need to create a referral marketing plan, implement it, and stick with it. You should be comfortable with how you approach referral marketing and make sure you are maximizing all your opportunities. And when it’s all said and done, make sure to send a personal, handwritten note to “thank” your clients for providing a referral or inviting guests to an event.