How can you effectively use client referrals to grow your financial services business?

Client referrals are one of the most powerful ways to grow your financial services business. They can help you attract more qualified prospects, build trust and credibility, and increase your retention and satisfaction rates. However, getting referrals is not always easy. You need to have a clear strategy, a consistent process, and a value-added approach. In this article, we will share some tips on how to effectively use client referrals to grow your financial services business.

1 Identify your ideal clients

The first step to getting more referrals is to know who you want to work with. Not every client is a good fit for your services, and not every client can refer you to the right people. You need to identify your ideal clients based on criteria such as their goals, needs, challenges, preferences, and demographics. Then, you need to segment your existing clients based on how well they match your ideal profile, and how likely they are to refer you to others. This will help you focus your efforts on the most valuable and loyal clients.

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Ben Lerche

Investment Sales Consultant | Annuity Liaison | Non-Profit Board President | at Northwestern Mutual
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Make it clear to the current client the value you provide. Once they see how you work and what you do for them, they have a better idea of who you can help. Give them kudos for being such a great client of yours and let them know they are the kind of people you can help. Then when you ask for an introduction to like-minded individuals/couples, they already know where you can help. This should help bring more referrals with investable assets as opposed to say someone that just needs help managing debt.

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2 Provide exceptional service

The next step to getting more referrals is to provide exceptional service to your existing clients. You need to go beyond their expectations, and deliver value that they can't get elsewhere. You need to show them that you care about their success, and that you are a trusted partner. You need to communicate regularly, provide timely and relevant advice, and solve their problems. You also need to measure and improve your client satisfaction, and ask for feedback. By providing exceptional service, you will increase your client loyalty, satisfaction, and retention, and create a positive word-of-mouth.

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3 Ask for referrals

The third step to getting more referrals is to ask for them. You can't expect your clients to refer you to others without asking them. You need to make referrals a part of your ongoing relationship, and not a one-time event. You need to ask for referrals at the right time, in the right way, and for the right reasons. The right time is when your clients are happy with your service, when they have achieved a positive outcome, or when they have expressed gratitude. The right way is to be specific, personal, and respectful. You need to explain why you are asking for referrals, what kind of clients you are looking for, and how you can help them. The right reasons are to help your clients' friends, family, or colleagues achieve their financial goals, and to grow your business.

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Ben Lerche

Investment Sales Consultant | Annuity Liaison | Non-Profit Board President | at Northwestern Mutual
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Ask for them! We often don't ask for them, or don't ask in the best fashion. When it comes to asking for the referral, plant the seed along the way. As you go through your pitch, work in other clients and how they were referred to you. In addition, make it a part of the initial sales/fact finding process to mention that you will be "asking them for other people they know that might benefit from the same planning process..." or however that sounds in your own words. Then they are not surprised when you ask them for names later on. As to getting the right referrals, I would say something along the lines of "I love working with folks like you. Who are some other people like yourself that you could benefit from this process?"

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4 Reward referrals

The fourth step to getting more referrals is to reward them. You need to show your appreciation and gratitude to your clients who refer you to others. You need to thank them personally, and acknowledge their contribution. You also need to provide them with some incentives, such as discounts, gifts, or recognition. However, you need to be careful not to violate any ethical or regulatory rules, and to avoid creating a quid pro quo expectation. You need to make sure that your rewards are appropriate, proportional, and transparent.

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Ben Lerche

Investment Sales Consultant | Annuity Liaison | Non-Profit Board President | at Northwestern Mutual
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Always keep rules and regulations in mind with this one. I liked to take out the referrer and the referred to a dinner or something similar. It thanks them and gets you all together to build that trust aspect of the relationship. And once again, opens the door for more referrals.

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5 Follow up on referrals

The fifth step to getting more referrals is to follow up on them. You need to contact the referred prospects as soon as possible, and introduce yourself and your services. You need to mention the name of the client who referred you, and explain how you can help them. You also need to keep your client informed of the status of the referral, and update them on the progress. You need to demonstrate your professionalism, expertise, and value proposition to the referred prospects, and convert them into clients. By following up on referrals, you will increase your conversion rate, and generate more revenue.

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6 Nurture your referral network

The sixth step to getting more referrals is to nurture your referral network. You need to maintain and strengthen your relationships with your existing clients, and your new clients from referrals. You need to continue to provide exceptional service, and add value to their financial lives. You also need to stay in touch, and provide them with useful information, education, or resources. You need to remind them of your referral program, and encourage them to refer you to more people. You also need to expand your network, and connect with other sources of referrals, such as professional associations, community groups, or social media. By nurturing your referral network, you will create a sustainable and scalable source of growth for your financial services business.

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7 Here’s what else to consider

This is a space to share examples, stories, or insights that don’t fit into any of the previous sections. What else would you like to add?

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How can you effectively use client referrals to grow your financial services business?

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1 Identify your ideal clients

2 Provide exceptional service

3 Ask for referrals

4 Reward referrals

5 Follow up on referrals

6 Nurture your referral network

7 Here’s what else to consider

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