|
|||||||
|
|||||||
|
Finding Gold
Science and the Quest for Referrals: WHEN to Ask for Them
By Michael Lovas
June 1, 2008
We know from research that 80% of revenue for most Financial Advisors comes from existing clients. In addition, of the remaining 20% of new business, as much as 70% comes from referrals. But wait a minute; those numbers are only relevant for advisors who already have a successful system for getting referrals. Our experience is that very few advisors know when or how to ask for referrals.
For those who do not yet have a successful referral system, the numbers are likely reversed. In other words, your client base is likely stagnant or diminishing, rather than growing at the rate it could. If that's you, it means you're working far harder and getting far less return. That's a sad scenario, but it describes most advisors.
This article focuses on how to get referrals. It gives some of the psychology at work, and gives you the first step in a psychologically valid referral system. Today, we focus on When to ask.
When to ask
Imagine you're a third base coach during the World Series. You have one runner on first, and your pitcher is at bat. You need to decide right now – yes or no, if the runner should steal second to keep the pitcher from hitting into a double play. Thing is, you can't guess. You need a guideline or formula to follow: If [fact one] plus [fact two], then make decision X.
It's the same thing with asking for and getting referrals. You need a formula for When to ask, and a strategy for How to ask. Obviously, you can't ask when you first meet the prospect because you have not yet earned the right or built any value. So, what builds value? And, how much value is enough?
We teach our clients to use two tools: 1) the Rule of 3 and 2) the Value Credit Card. They work together like this:
The Rule of 3 is simple in practice, but the psychology behind it is pretty sophisticated. It's based on a mental filter called Convincer Strategy. It's how many experiences a person has to have before he's convinced to take some kind of action. Each person has a different requirement in every different situation. However, most people's Convincer Strategy is satisfied by three experiences.
To get a referral, you have to earn the right to ask for it. And you earn that right by reaching out to your client with what we call "Value Events." Each value event puts one point into your Value Credit Card. You cannot ask for a referral until you bank three points in your Value Credit Card.
Performance is mandatory, but it counts for only one point. The other two points come from two sources:
1) Written connections, such as: greeting cards, letters, post cards and gifts.
2) Personal connections, such as: personal visits, lunches, sports events and other non-business activities.
For example, buying lunch for the client or prospect would give you one point. A gift would give you one point. A personalized greeting card would give you one point. An email would give you zero points. An e-card would give you zero points. A phone call about a great new product would give you zero points.
One of the easiest ways to get those points is by sending personalized greeting cards. Think back to the cards you've either seen or sent. Nearly everyone who uses greeting cards sends the same cards. Birthdays and big holidays. Why would you purposefully send something that you know other people are sending? The idea is to show yourself as different and better, to improve the connection. For example, for our clients who are military veterans, we created cards with their branch of service printed on the front. It's unique, personal and connects to that person via an extremely high value. (I'm happy to teach you how to use this.)
Remember, you cannot ask for a referral until you have banked three points. If you don't get the referral, you have to bank another three points before you can ask again. And, these "value events" cannot be connected to a pitch or presentation. Those are focused on you and asking for referrals is a process that must be focused away from you.
You want to initiate the referral talk within one week after you bank the third point. That is when your value has reached its highest level and the timing is not obvious.
Who does it help? Before you ask for the referral, you need to ask yourself if your value is transferrable. See, the referral is not intended to help you – it is intended to help the client's friend. If you approach the request in a way that's intended to help you, it shows you as needy. "John, I sure could use a referral." Who in his right mind would give a needy person a referral to a trusted friend? Fear of loss kicks in, and overpowers everything else. So, is your value transferrable to that person? Is your expertise relevant to that person?
In ConclusionReferrals are the life blood of a successful relationship-focused business. If you are careless or goofy about asking for them, you will damage your credibility. But, if you handle this process adroitly, you will show yourself as a true professional. Next month, I will teach you How to ask for referrals. I've created a six-step process with a script you can follow. If you'd like a "sneak preview," just let me know and I'll send it to you.
Your RewardAdding points to your Value Credit Card requires you to think strategically, and to find tools that help you be effective building value with your clients. Over the years, we've either created our own tools or found the best ones. If you want to learn how to build value with your clients, just send me an email (michael@aboutpeople.com) and I will teach you how to use one of the most effective tools we've ever found.
MICHAEL LOVAS is the author of ten books, three columns, and a thousand articles on Professional Credibility and the Psychology of Communication in the financial industry. He's the co-founder of AboutPeople and the founder of Credibility Marketing.
Michael speaks at conferences and seminars in Canada and the US. He is an inspiring trainer and coach who helps advisors improve their businesses. He holds three prestigious certifications: Licensed Master Practitioner of Neuro-linguistic Programming (NLP), Licensed Trainer of NLP; and Clinical Hypnotherapist. They make Michael an expert at helping financial professionals succeed at a higher level by building more meaningful business relationships.
AboutPeople Books:
- (NEW) Questions Are the Answer! - A guide for using questions effectively in sales conversations
- (NEW) Axis of Influence! - How credibility & likeability intersect to drive success!
- (NEW) Words that Sell - The language of psychological marketing & selling
- Face Values - How to read people and connect with them in less than 3 minutes!
- The Boomer Report - The financial advisor's guide to understanding the boomer mind
- Presentation Magic - How to gain a psychological advantage in your seminars and sales presentations
- The 5 Levels of Rapport - How to create a meaningful connection with people who are important to you
- Magnetic Connections - Consultative selling for financial professionals
- IDENTITY - How to create and deliver the most important statement of your business life
- Inside the Mind of the Senior Market
- Beyond Wave Marketing - How to add credibility to your relationship marketing
Find AboutPeople books at: www.aboutpeople.com
Michael Lovas, C.Ht.
AboutPeople
(509) 465-5599
1503 E. Riverview Dr.
Colbert, WA 99005
www.aboutpeople.com
