Here are some things I read this week — applicable to all the audiences I write for (entrepreneurs, financial professionals, and real estate professionals)…
- 5 proven ways to drive more word of mouth referrals. It’s well known that word of mouth referrals are among the best and most profitable type of “marketing” there is. But it also seems like you can’t control it. But in this excellent article, the writer describes some ways that you can empower others to spread the word about your business. A must-read for everyone!
- Free exchange: Ad scientists. In this article at The Economist, the writer talks about online ads and how an increase in ad results and sales may not necessarily meant that the ads are working. (The sound you hear is your whole world shattering). I’m spending a lot of time thinking about data, econometrics, statistics, and analytics in advertising and this was a really good (but alarming) read.
- The dipper and the bucket: A leadership principle. In this article at Realtor.org, Scott Lalli describes how we all have a bucket and we all have a dipper. The bucket (which seems to be shorthand for our psychological/emotional well-being) can be full, which leads to contentment, or can be empty, which leads to dissatisaction. But it’s the dipper that makes all the difference, he says. Lalli says that the dipper can be used to fill our own bucket or to take away from others. It’s a good way to think about how our interactions can impact the people we connect with.
Running your financial or real estate practice takes time and effort and money — and a good portion of that investment is spent on putting potential clients into your sales funnel and trying to turn them into paying clients.
Getting referrals makes for more profit because you spend less time, effort, and money to find potential clients.
So, how do you generate referrals? I’ve collected the advice, best practices, and ideas I’ve used and seen, and combined it with a comprehensive list of ideas collected from the web for a go-to reference on referrals.
Just before I get into the list, I want to highlight something that you’ll need to think about: There are two kinds of referrals but we often use the same word (“referrals”) to describe both. Some referrals occur when a client GIVES YOU the name and contact information of someone they think you can help, and you contact that person. Some referrals occur when a client SENDS someone to you. In the list below, I’ve included tips for both types of referrals.
HOW TO GET MORE REFERRALS
- Just ask for referrals: This seems like the most basic advice but it’s easy for a financial or real estate professional to skip the question. Yet asking it is so easy, it takes 10 seconds, and it can dramatically boost your business.
- Not just clients or friends: When we think of referrals, it’s easy to think of your clients or your friends and family as key referrers. And they probably will be. But they won’t be the only ones. You can get referrals from people who don’t become clients.
- Explore your internal blocks of asking for referrals: What keeps you from asking for referrals? There’s an internal block — some kind of mental list of objections — and you need to overcome it. Take a long look inward and overcome that internal resistance! Often, I think that internal block has to do with embarrassment at asking for something so seemingly personal as your client’s friend’s name and contact information.
- Prepare to address your client’s objections: Along with your own internal objections (above), your clients might have some objections about giving you referrals (instead of just referring people to you). If you are prepared for these objections, just as you would be prepared for any objections in a sale, you can handle them. Check out this article on the topic: Objections to getting referrals. In my opinion, one of the biggest things you need to do is outline what you will do and say when you contact that referral.
- Shape your client’s thinking: When you ask for referrals, be specific about who you are looking for. If you just ask “is there anyone else that you think I could help?”, you’ll be met with blank stares because they know a lot of people. However, you can shape your client’s thinking by asking “Is there anyone on your bowling team who I could help?” or “Do you know of anyone else on this street who I could help?” This was a tactic I learned when I was a stockbroker.
- Write a script: Yeah, we’re going old school with this tip! When you first started out, you probably had a script or two for every sales situation. Now’s your chance to write another script — this one is a “tack on” that you add to the end of any conversation — in which you ask for a referral. Make it fast and smooth and positive.
- List the benefits to your client: It’s easy to skip asking for referrals because we think it benefits us and the referral… but not the referrer. But that’s not true. Take a few minutes to think of the ways that your client benefits when they refer someone to you. For example, if you are a real estate professional, your client is helping their friends find the house of their dreams by referring them to you. That’s just one benefit… there are a bunch of other benefits.
- Know the two types of evangelists: There are two types of people who “evangelize” your business and send referrals. Learn what those two types are and read about how you can help your evangelists. Source: How to get your customers to talk about your business.
- Practice asking for referrals: Like everything else you do in your profession, asking for referrals is a skill that requires practice. So practice! Start by practicing in front of the mirror. Then practice in front of your spouse. Then practice in front of family and friends (who might actually do some referring!). Then, as one website suggests, practice in front of your low-risk clients. After all of that practice, you’ll be ready to ask anyone and everyone for a referral!
- Social media referrals: I’m only scratching the surface when I suggest that social media is a great tool for referrals. Use Facebook, Twitter, and LinkedIn to get referrals. But don’t abuse those sites: It takes time (just like offline) to build relationships, establish credibility, and finally to ask for a referral. Start by posting interesting, authoritative content and remember to recommend other people!
- Set the stage for your clients: Your clients lead busy lives so as they are going through their day, they don’t always remember to refer people to you. But you can set up triggers that will help them to remember. For example, say something like: “Next time you’re at the gym, can you mention my name to the people who play basketball with?” They might not remember at other times but there’s a greater likelihood of them remembering when they walk in the gym because you’ve planted the idea in their mind.
- List who you know: Chances are, you’re not tapping into the potential market you already have. I’ve heard someone estimate that we all know an average of 200 people. So sit down and list everyone you know. Once you’re done with the list, put it away for a day and then take it out and write down more: Your hairdresser, your dry cleaner, your dentist (don’t forget the hygienist and the receptionist). Heck, you probably know more than 200 people. Then go out there and tell them about your biz. (What does this have to do with a referral? Well, nothing in this step except that you are growing your own business while you are reminding yourself that your clients know the same number of people).
- Give to get: Remember that giant list of people you just listed? Why not refer someone to each of them. Your hygienist is probably looking for a house and your dry cleaner probably needs a new accountant. Send them to your peers. Some of that good referral karma will come back to you.
- Enable your customers to refer you: At the end of each visit with your client, hand out some business cards. Say something like, “You already know how to get in touch with me but here are some business cards in case you know of someone else who I can help.”
- Make referring normal: Clients don’t refer because it feels weird to them. But if you make it seem normal then it’s okay. For example, point out that most of your clients refer at least one person a year (or whatever your referral rate is). That sets the stage for you to say: “so who would you refer to me?”
- Be an expert: Pick a topic that resonates with your clients and their friends and become write a book on that topic. Imagine that you are a financial advisor and your client is talking to his friends about their retirement accounts. Their friends say: “I’ve been looking at ETFs” and your client says: “My advisor wrote a book on ETFs.”
- Be exclusive: This is a counter-intuitive way to get referrals without even asking for them! Tell your clients that you have strict guidelines about who you serve and that you can only help people who fall within the following parameters… then list a series of attributes of your perfect client. For example, you might say: “People refer their friends to me all the time and I love to help people out but you should be aware that I only take on clients who have a net worth of $250,000 or more.” Don’t make the parameters too exclusive; just make them detailed enough to appear slightly more exclusive than anyone else.
- Set a weekly goal: I love this one and I wish I did this when I was a stockbroker! This idea comes from Ray Silverstein’s article on Entrepreneur.com. Among his short list of referral ideas, he suggests setting a weekly referral goal. I like this because it decouples the idea of referral-asking from your interactions with clients. Of course you’ll ask clients but you’ll also need to (probably) ask other people for referrals as well. Strive to reach a goal then stretch yourself by increasing the goal.
- Contest idea #1: Have a contest among your clients for the most referrals. Give a prize for the winner. Be careful with this one because you might end up getting people who aren’t qualified to be your clients… but if you communicate the contest correctly, it might be a fun way to educate your clients on your desire for referrals.
- Contest idea #2: Have a contest between yourself and another professional to see who can get the most referrals. This makes asking for referrals fun and gives you a little extra incentive to remember to do it. The loser needs to buy the winner lunch. (Although if you both increase your referrals then you have both truly won).
- Redefine referrals: The word “referrals” conjures up a businessy feel. And asking clients if they have anyone to refer to you isn’t much better. I really like Dan Richards’ idea from Advisor Perspectives. He talks about “getting introduced”. Instead of asking your clients for someone they’d refer, just change the terminology and ask them if they would introduce you to someone you can help. It feels WAY less threatening.
- Be unique: No one sits around and says “my real estate professional was bland” only to have someone else exclaim: “so was mine!” People share things that are unique and memorable. Although you should avoid the chicken suit syndrome, you should find ways to be memorable in your business. You can get referrals just by being different.
- Create non-threatening referral situations: I hate referring my friends to professionals because I’m afraid that the professional will hassle them. But I would definitely be open to a situation where there was a seminar or workshop on a relevant topic and I was invited and strongly encouraged to bring a friend. (Make the event an exclusive event and only give out two tickets per person, or two tickets per spouse).
- Written reminders: Include a referral reminder in the footer of your direct mail and in the signature lines of your email. My favorite is: “A referral is the best way to thank me for my service”.
- Make the referral about your availability: This is the one I use most often when I want more business (PS, it helps if it’s true). Send out an email to your clients and let them know that you have some availability to take on one more client and before you open it up to the world, you wanted to give them an opportunity to reach out to their friends/family/peers/colleagues/contacts first. I love this method and I’ve never been disappointed with the results!
- Show up: I think this is one of the least-utilitzed ideas in financial and real estate but it’s so powerful. Become your client’s biggest fans. If they are playing softball, go to the game and cheer them on. If their kids are in piano, attend the recitals. Your clients will love it and, as you’re standing around at the end, they’ll introduce you to people. Those other people will see that you show up for your clients and they’ll look around and wonder where their financial advisor or real estate agent is. Sure, this might make you really busy but you’re out doing prospecting work.
- Another “sneaky way” of asking for referrals: This is the first time I’ve heard this idea and I love it! In Rain Today’s Rainmaker blog post, they suggest that professionals list out the qualities they want in a referral and then go over it with clients. I think this is a great idea to do regularly. Pull out the list (hint: DON’T call it a “referral list”) and go through the points with your client.
- Network with the hubs: Some people hang out in a circle of friends and coworkers and never really expand beyond that. And some people are hubs — especially entrepreneurs and business owners who serve a lot of clients. Get to know them. Tell them about your business and who you serve. Focus on peer-professionals (financial advisors, real estate agents, accountants, and attorneys) because they are likely to have clients with similar needs. But also consider your friendly hair dresser and barber because they have a captive audience for 15 to 30 minutes and those people spill their guts about their financial and real estate needs. Check out this excellent (but difficult-to-read) page on Tier 1 and Tier 2 Centers of Influence. This page has a bunch of great ideas about referrals.
- Make referrals a condition: I love this tip, mentioned by PJ Weiland at SuccessNet: “Make giving referrals a condition of doing business with you.” That’s brilliant.
- Thank your referrers: A simple thank you goes a long way. Express appreciation for the referral and invite them to send more referrals at any time.
- DON’T contact the referral: If you’re scared of referrals, you’ll love this one: Once you’ve asked your clients for referrals, don’t contact them. Instead, thank the client for suggesting those names and ask the client if they would tell them about you next time they see them. Although this takes the control away from you, it increases the likelihood that the referred person will get in touch. (Source: Inc. Magazine’s “3 Tricks to Getting Sales Referrals”)
- Incentivize your referrers: When someone refers someone to you, do something nice for that person. Send them flowers or a gift certificate or something. (Note: There are might be some regulations around this). This blog post from nimble.com gives some good, easy, and inexpensive ideas for incentives. If you’re not sure how much to spend on incentives, figure out the lifetime value of your clients. Once you know how much every client is worth on average, you know what you can comfortably spend to get quality clients who will be profitable quickly.
- Go on a referral frenzy: If you are out of the habit of getting referrals and you want to get started, schedule your own little referral frenzy — a short period of time when you commit to asking all of your clients for a referral. You can tie it around an event to help break the ice. For example, if the new year is approaching, why not contact each client and say this: “It’s almost the new year and I want to start out with a bang. That means adding a couple of clients to the list of clients I serve. Would you kindly recommend someone to me? Thanks in advance!”
- Motivate yourself: Figure out how much money you make from an average client. Then do the math. If 1/10th of your clients referred another client to you, your income would boost by 10%. So how many clients do you need to ask for a referral to get a 10% raise? Since the close rates on referrals are so high, you might only need to ask 40% to 50% of your clients. That’s right: If you just add a 2 second “who else do you recommend?” onto the end of your sentence for half of your clients, you could potentially boost your income by 10%.