How To Generate An Amazing Number Of Referrals
By Michael Roby
Today I share with you some of the findings of The PraxMax Project, a study of how financial service professionals generating $1 million per year in commissions and fees and up became great, continue to stay great, and continue to get better…."PraxMax" stands for "Practice Maximization." PraxMax means not only high production but also client-centric production….
One differentiator of PraxMax advisors is that they generate an amazing number of referrals, often 100 percent of their new business, and they generate those referrals in an unconventional manner.
As a speaker and sales trainer, I have asked thousands of salespeople a simple question: "What is the No. 1 rule for getting referrals?"
Audiences and individuals alike shout out, "ASK!"
That answer is correct, but only partially correct. Certainly, successful salespeople ask for the order. Legions of salespeople faithfully ask for referrals. They ask buyers. They ask non-buyers. They ask centers of influence. They enthusiastically say something like this: "The vast majority of my business comes from referrals from satisfied clients and other people like you. Whom do you know who might be interested in seeing my services and the type of work I do?"
Still, they do not get nearly the referrals they expect they should get. Most of the time they get a response like this: "Let me think about it, and I will get back to you."
What does this mean? What is the result? Where does it lead?
• It means NO.
• The result is NO REFERRALS.
• It leads NOWHERE.
Oh sure, many times we get referrals from clients long after we asked for them, but not nearly as many as we should.
Calls upon those referred to us are often five to ten times more productive than cold leads. If referrals are really that valuable, maybe it is incumbent upon us to tell our clients to whom we wish to be referred! So what is a better strategy?
A better referral strategy
Make a list of your top relationships: your clients and centers of influence. Focus on not only those people and firms that do substantial business with you but also those you consider advocates. I'm talking about “A” clients! They fit your business model, have reasonable expectations, and have the wherewithal to refer you to others. You love them, and they love you!
Then build a list of people and/or firms that know or are acquainted with your client. Building the list can even be delegated to a member of your team, or outsourced. This list includes but is not limited to:
• Friends
• Family
• Business associates
• Neighbors
Call your clients for a breakfast, luncheon, or dinner meeting, or just coffee. Tell them that the reason for the meeting is you have decided to make a major change in the way you do business, and you need their help and their advice. At the meeting, say something like this:
"Like other businesses we are trying to grow. The challenge is to achieve that growth without reducing service to our existing clients. In order to hit our growth targets and maintain a high level of service, we have decided to focus on referrals from our best relationships. The reason I am telling you this is because I admire you, and you are the type of person other people admire and respect. I trust your judgment, and feel that you will give me good advice.
"New client relationships are the way I will make my business grow, and because people know and respect you, I think it would mean a great deal to them if they knew you are a client/close friend/associate. I have this list of people and/or businesses that I plan to call in the next five to ten days."
Show them the list
At this point show the list, complete with addresses and phone numbers if you can get them. You continue:
"I believe you know or know of the majority of these people. It would mean a lot and be a huge personal favor if I could mention that you are my client. While I would never tell anyone anything about your financial affairs, would you have any objection to my mentioning you are a client and friend of mine?"
One quick comment about the word “objection”. Objection is an extremely strong word. Objection is one of the most powerful concepts in our culture; people do not like to object to other people. Words are important, so use the word objection.
At this point, the vast majority of people will say that of course you can mention they are your clients. Then simply proceed to qualify the names: "What can you tell me about So and So?...
Michael Roby is a sales and marketing strategist, business coach and professional speaker, and author of the book, “The Ultimate Small Cap Business: Building a Financial Advisory Practice.” His firm, Michael Roby and Associates, is based in Savage, Minn. He has been in the business since 1975, serving not only as financial advisor and sales manager but also as wholesaler and consultant, and cultivating expertise in helping professional service providers grow their businesses. The comments above are excerpted from “The PraxMax Project: How the Super-Producers Become Great and Stay Great,” a talk he gave at the MDRT 2013 annual meeting in Philadelphia.
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