The 7 Deadly Referral Mistakes
Jumpstart Your Referrals & Introductions for 2017
Check out these seven common mistakes most financial professionals are making. Are you making them? Are they killing your chances for more high-quality clients through referrals and personal introductions?
MISTAKE #1: Lack of Commitment to Referrals
How would your next great (best ever) client prefer to meet you? Through a cold call? No! In a seminar? Only by default. From a direct mail piece? You’ve got to be kidding! Study after study has demonstrated that the best clients WANT to meet you through an introduction from someone they already trust, like a friend, family member, colleague, CPA, attorney, etc. Why would you make referrals a passive process and not become proactive?
So, are you just dabbling in referrals or are you truly committed to building a referral-based business? Do your actions demonstrate a real commitment to making referrals happen for you?
I suggest you become a student of referrals. Learn all you can – from me and from others. Give referrals so you know what it’s like to be on the giving side of referrals. When you study referrals more – and actually ACT on what you learn, from time to time – your commitment to building a thriving referral-based business will become stronger.
MISTAKE #2: Making Referrals All About YOU
You’ve probably heard the old way of asking for referrals “Let me tell you how I get paid. I get paid in two ways.” Let me be perfectly clear about one thing, STOP saying that! Let’s take a look at this for a second:
I think you already know that not everyone likes to give referrals. No matter how referable you are, some people just don’t play the game. So, now let’s say you’re in the presence of a new prospect or even a new client – a client who doesn’t like to give referrals – or likes to take their time in participating in referrals. Then you tell them this is how you get paid! You set referrals up as an obligation and not an earned right. Now tell me, do you think you are building or losing rapport and trust?
Julie Littlechild, author of The Pursuit of Absolute Engagement, has studied this phenomenon for years. Her research revealed that 67 percent of financial clients give referrals to help a friend, colleague, or family member. 33 percent provide referrals to help their agent or advisor. First, make this process about your value and the people you help.
Think about it this way; when you get a referral without asking for one, why did that client give that to you? It’s because they saw the value in the work you’ve done for them and want to introduce others to that value. Perhaps they want to help you become more successful too, but that’s secondary motivation. Clients give referrals only when they see the value in the work you do. So, make your request for referrals all about your value and extending that value to others.
MISTAKE #3: Forgetting to Ask for Referrals
Do you ever forget to ask for referrals? Shame on you! If you’re making this mistake, then you’re clearly missing some huge opportunities to be introduced to some great clients. But are you really forgetting? Or is something else going on there?
I submit that what may really be going on here is that you don’t feel comfortable and confident asking your clients for referrals so – unconsciously – you make little decisions along the way that sabotage your referral efforts. Only you know if this is true for you. I can tell you with great confidence, that I know it’s true for many producers.
So, what do you do to fix this mistake? First, you need to truly commit to building a referral based business – as I’ve already addressed. Second, you need to get yourself a “prop.” Many producers are having great success using the Introductions Journal to collect their referrals. They have a small black book (or whatever color you like) that they put out on the table during all, or most, of their meetings. This Introductions Journal acts as a constant reminder (or prop) to plant referral seeds, have value discussions, and ask for referrals (many of the techniques we teach in our system). In this way, you don’t forget and can manage your appointments better.
Using this Introductions Journal doesn’t mean you have to ask for referrals on every appointment, it just means you won’t forget. Now, when you do ask and you begin to get some referrals, you open this book and use it to collect your referrals. This validates the process for your clients and treats the request with importance.
MISTAKE #4: Not Being Referable in the First Place
Are you referable? How do you know? Well, one barometer of your referability is that you’re getting referrals without asking for them. Are you? Every business owner, sales professional, financial professional – you name it – should be getting referrals without asking for them. Regardless of the exact nature of your business, there are people out there who like to give referrals. You should at least be getting those.
However, usually these passive referrals aren’t plentiful enough or are not always the right matches for your business. This is why we want to find ways to be proactive – as much as possible – without being pushy or obnoxious.
So, how do you become more referable? With prospects and new clients, it’s all about the process you go through with them. It’s NOT about your products. Having great products certainly helps, but the greatest product in the world won’t spur a client on to giving you referrals if your process is not referable. Think process, not products.
Now, what keeps you referable over the lifetime of your client relationships? There are 3 levels of activity you must engage in to maintain a high level of referability:
- Transactional: You must have systems, standards, and help in place to make sure you don’t drop the ball and handle all transactional aspects of your practice with impeccable service.
- Value Added: If you don’t continue to add value to your client relationships, then you are no longer necessary. Think of all the possible ways you bring more value to your clients. Being realistic, bring as much as you can to your ‘A’ client. Bring a subset of that to your ‘B’ clients, and a subset of that to your ‘C’ clients.
- Business Friendships: Build as many business friendships with your clients as possible. Some may not want to be your business friend and vice versa. But in most cases, this is a desired outcome with your clients. People do business with their business friends and they refer business to their business friends. One of the best ways is to host client appreciation events of all kinds.
MISTAKE #5: Thinking Great Service Alone is Enough
Many people walk around under the illusion that “If I just serve the heck out of my clients, they will refer me to others.” Well…some will, but many more won’t unless you nudge the process along and become proactive.
Let me give you the 60% rule that I share in my speeches, seminars, and training programs. Everyone’s numbers are different, but it goes like this:
20% of your clients will give you referrals – almost no matter what. These are the folks whose brains are wired to give referrals.
20% of your clients will never give you referrals – no matter what. You could run into a burning building and save their children and they wouldn’t give you referrals. They have different “wiring.”
The gap that exists for most financial professionals is the 60% of the clients who will have a conversation with you about referrals, but not unless you bring it up with them. Not everyone will give you referrals on the spot, but many will do so over time.
How big is YOUR referral gap? If you’re just getting started, don’t let this happen to you!
MISTAKE #6: Letting Your “Belly Button” Get in Your Way
My first sales trainer was a guy named Dave Sandler – founder of The Sandler Sales Institute. While Dave is no longer with us, he had a concept I really liked. He called it “Protecting Your Belly Button.” What he meant by this was “giving into your fear.”
Why don’t most folks ask for referrals? You already know the answer. FEAR.
I’ve heard just about every reason in the world why people don’t ask for referrals. While the exact words change with each individual, every reason I’ve ever heard is fear based. The good news is that at the core of each fear is the solution to that fear. In future columns, we’ll examine these fears in detail. Bottom line… Don’t let your fear run your career.
What’s your fear? What’s your barrier? How are you protecting your belly button? Figure that out and you’ll find the solution.
MISTAKE #7: Not Using a Systematic Approach
How can you expect to build a thriving referral-based business if you’re only dabbling in referrals? Sure, you know what to do with a referral when you trip over one, but to create referral momentum, you need to employ a systematic approach on a regular basis.
It’s like playing pool or billiards. In billiards, as you’re trying to make a particular shot, you’re also looking ahead to your next shot. You’re trying to leave your cue ball in position to make your next shot. In billiards, if you’re any good, one shot will lead to the next.
That’s what you want to do with your referral process. You bring a prospect into your office, or go to theirs, and you convert them into a client. That’s good, but if you don’t have a simple referral process in place, then what happens? Do you have to get back on the phone and make cold calls or call expensive leads? Do you have to gear up to do another seminar or another direct mail piece? Or maybe you just wait around for your next referral?
With a referral process in place – that you employ on a regular basis – you bring a prospect into your sphere of influence and convert them into a client in such a way that not only do they become a client, but they lead you to others. The good news about referrals is that one client can lead to two and two can lead to four and four can lead to eight. With a steady referral process in place, your business grows exponentially.
So, there you have it. The seven deadly referral mistakes. Are there really more than seven? You bet there are but these are some of the key mistakes for you to examine for yourself.
Bill Cates, is the author of Get More Referrals Now! and Beyond Referrals, and the founder of The Referral Coach Academy. Subscribe to his free referral tips and other free resources at: www.ReferralCoach.com/resources. Bill works with financial professionals and their companies to increase sales by attracting high-quality clients through a steady and predictable flow of referrals. To learn more about his Self-Study Video System, his books, Coaching Program, Referral Champions Camps, seminars and training go to www.ReferralCoach.com or email your questions or interest to him directly at BillCates@ReferralCoach.com.