There are many reasons why the best type of new inquiry is an introduction from an existing client: there’s probably an immediate need; they will have already heard positive things about the value you add and the cost of generating referrals (they aren’t ‘free’, contrary to what some people believe) is significantly lower other types of marketing.
However, despite referrals being so important, we rarely find firms have a coherent strategy to generate more. That applies equally to firms who already get large numbers of referrals and those who receive very few. Therefore, much of the work we do is aimed at increasing the number of referrals firms receive from existing clients.
When existing clients are invariably happy with the service they receive and say they are willing to recommend others, a lack of referrals represents a missed opportunity.
How do we know this?
We believe client surveys are fundamentally important to running a successful marketing project. Consequently, at the start of any large projects, we always recommend firms survey their clients. These surveys help to: get feedback on any changes or initiatives we might be planning; understand what’s going right and what could be improved; build social proof to use online and in other forms of marketing and understand a client’s attitude towards recommending their adviser or planner to others.
Over the past 18 months, we’ve run numerous surveys on behalf of firms. Two things stand out: the overwhelming majority (96.04%) are happy to recommend their adviser or planner to others and even more (99.01%) say that working with the planner or adviser has helped them to achieve their goals.
The evidence is clear; clients are happy with their adviser or planner and willing to recommend them to others. However, in the quest for more referrals and introductions, that’s only half the job.
When we ask the same people about the last time made a referral, the picture becomes less rosy: 39.69% have made a recommendation in the past 12 months; 29.32% have recommended their adviser or planner, but not within the past year and 37.11% have never recommended their adviser or planner to someone else.
A missed opportunity
These figures clearly demonstrate a missed opportunity; clients are happy and willing to recommend their adviser or planner. However, four out of 10 have never made a recommendation, while three out of 10 haven’t done so in the past 12 months.
Even if you get most of your new clients through referrals or recommendations, for the average firm that might still mean hundreds of potential advocates for your business who aren’t making referrals or recommendations.
The reasons will be different for every business. However, here are 12 possibilities to consider:
- Not asking or informing
Experience tells us that many advisers and planners simply don’t ask for referrals or tell their clients they would welcome being introduced to friends and family.
Of course, I’m not talking about employing the crass tactics of the 80s and 90s; “You will need two books for our next meeting; your chequebook and your address book!”. But clients should be left in no doubt that you welcome being referred to others.
- Clients are concerned
Some clients might be worried that by referring you to others, the service they receive will be diluted.
- Not knowing who to refer you to
Clients might not understand the type of people you want to be introduced to. Rather than asking, they simply take the easier route of making no referrals whatsoever.
Educating clients about the type of people you want to work with has two key benefits: they are more likely to refer you on and to the right type of people and it helps avoid the potentially awkward situation of declining the opportunity of working with someone referred to you who isn’t a target client.
- Clients don’t know the value you add
Clients could probably explain the benefit they derive from working with you. However, they might not be able to do the same for other types of people you work with. For example, could a previously employed but now retired client explain the value you add to business owners?
- You’re not making it easy to refer you on:Part #1
In the unlikely event a client has had a poor experience, they are unlikely to refer you on. There may be others who are happy with the service and value they receive, but for whatever reason have doubts and therefore don’t recommend you to others. If this is the case, your client survey will help get to the bottom of this.
- You’re not making it easy to refer you on:Part #2
The easier you make it for clients to refer you, the more likely they are to do so. At best most advisers and planners might offer a handful of business cards, but most don’t even do that.
- Clients are referring, not introducing
Our research shows that nearly 40% of clients have recommended their adviser or planner to others during the past 12 months. However, have all of those got in touch with you? No, of course they haven’t.
Think about your client bank; if you have, for example, 150 clients, have you received 60 new referrals over the past year? Probably not.
That’s why clients should ideally be introducing you to others, perhaps via a phone call or email, rather than simply passing your name or business card along and hoping the person receiving it is motivated enough to get in touch with you.
- They are worried about looking bad
We all know the work you do changes lives. However, some of your more cautious clients might be worried about referring someone in case they are unhappy with your service.
Our surveys show that’s highly unlikely. However, if a client is worried about the possibility, it needs to be dealt with if they are to be turned into enthusiastic advocates for your business.
- Online invisibility
When someone is referred to you, they are likely to head to Google. That might be because they want to do some further due diligence having been referred to a couple of firms. It could simply be a case of looking for your contact details.
Either way, if your business is invisible online and they can’t find you, the chances of them getting in touch drops dramatically.
- Failing to impress online
Assuming a potential client can find you online, what they see will increase or decrease the chances of them getting in touch.
If your business dominates the results page for a brand search (one done for your business name), with links to your website and impressive Google reviews, the existing positive impression will be enhanced and the chances of them getting in touch rises. The same is true of your website. If it’s easy to navigate, gives the information they need and clearly demonstrates the value you add, they are far more likely to get in touch.
The opposite is of course true. Fail to impress online and the chances of you receiving that call or email will fall.
- Out of sight, out of mind
Our surveys show that clients get huge value from the face to face interactions they have with their adviser or planner. However, once the warm afterglow of those meetings has faded they will get on with their lives. That means opportunities to refer your services might pass them by.
We believe those firms which touch their clients more frequently are more likely to generate greater numbers of referrals.
- Not saying thank-you
Some firms provide financial or charitable incentives to their clients for referrals. Whether that is right for your firm and clients is a decision only you can make.
However, at the very minimum, a client providing you with a referral should be warmly and sincerely thanked. That might be a call, a handwritten note or a carefully chosen gift. Either way, their efforts should be recognised.
To grow your business by increasing the referrals and introductions you receive, we recommend following a three-stage process:
- Survey your clients
- Correctly identify the problems and issues
- Develop a strategy to deal with each
Then monitor the results. Create a baseline by looking back over the past 12 months, then compare future results after implementing your strategy. Otherwise, how will you know if it’s working?
The pay-off for generating more new inquiries in this way? Highly engaged inquiries and lower marketing costs.
We hope this blog is the trigger you need to review the way your firm approaches referrals and introductions. If you would like our help with any of the above, please don’t hesitate to get in touch by calling us on 0115 815 7770 or emailing [email protected].
Phil Bray, The Yardstick Agency