21 Feb, 2008
Published: 07:00 Thursday 21 February
By: Brett Davidson, FP Transitions
professional services business the most effective way to grow the
business is via referral. Successful IFAs measure the number of
referrals they receive per week. If your business is not receiving
several referrals per week then you have not yet hit the mark with
your clients. It is not good enough to say that because clients
don't leave your business they are satisfied.
SEEKING TO GROW VIA REFERRAL JUST MAKES SENSE AND HERE'S WHY:
* Referrals are a sign of a healthy business. If you are getting a
steady stream of referrals it is likely that many other aspects of
your business are working effectively.
* Referred prospects are more likely to see you as an expert,
arrive pre-qualified, and buy from you; lowering costs of client
acquisition and improving profitability.
* People generally refer people like them, so 'A', and 'B' class
clients can refer you more of the people you want to be dealing
with to improve your client quality over time.
Referrals can come from two sources: your clients and your broader
network of contacts (friends, family, staff, professional
connections, business associates etc).
Consistency is vital. Your business must deliver a known service
and outcome; same time, every time.
Failure to do so makes it hard for anyone to refer to the business.
Although one bad report may not stop you going back, it is far less
likely that you will risk negative feedback from a top client
again. What is the opportunity cost of that one bad service
Discipline comes from prompting, and reminding clients regularly
that your business grows by referral. At FP Advance we don't
recommend asking clients to get out their address book to provide
you with names. This is too direct and makes everyone feel slightly
grubby. However, many advisers are astounded to find out that their
clients haven't referred because they didn't realise the business
wanted more clients. How does this happen? Simply because clients
were never told that the business is looking for referrals.
The referral asking process becomes just that; a process like
everything else. From the very first meeting with a new client, to
telephone conversations with your support staff, to review
meetings, there is the opportunity to gently remind people that you
are seeking referrals.
Here are some ideas to help you increase your referral rates:
PACKAGE YOUR SERVICE OFFERING IN WRITING
Knowing what you can do for different client segments and being
able to communicate it clearly makes it dead easy for existing
clients to refer other people like them.
EXPLAIN THE REFERRAL PROCESS TO CLIENTS
Let clients know what they have to do to refer someone to the
business, explaining how you will approach the referral and what
you will say to them. This process must be transparent and
consistent every single time so they can trust you.
Try to acknowledge a referral with the person who referred the
prospect as soon as possible. This should happen regardless of
whether they do business with you or not, as you are encouraging
the referral behaviour in the first instance. This could be with a
card or small gift.
BRING A FRIEND STRATEGY
At every client seminar or client event ask existing clients to
'bring a friend'. This is a great way to meet new prospective
clients. If you take clients to corporate hospitality events like
the football or the theatre the people they bring are likely to be
like them, so invite your best clients to these events.