Filed Under:Your Practice, Practice Management

Networking makes for profitable referrals

I recently went through a mental exercise that exemplified the power of referrals and networking. I had met with a prospective client for the first time and after the meeting my office manager innocently asked me how these fine folks came to meet with me. Such a simple question, yet it triggered a 20-minute thought process to trace exactly who was responsible for referring these people to my firm.

Here's a summary of how the conversation went after I was able to successfully remember the sequence of referrals: These folks that I just met with were referred to me by my client Barbara. Barbara was the lady who retired last year and she was referred to me by her sister JoAnn. JoAnn has been a client for about five years and she has actually referred me about five other clients since we have been working together. JoAnn is the next-door neighbor of Dennis and Janice and are a wonderful couple to work with, and they have been clients for about seven years. Dennis and Janice have also referred other clients to us over the years. Dennis and Janice were introduced to me by a professional colleague, an accountant they had been thinking about doing financial planning and believed in strictly working with people who were personally referred to them. They asked their accountant and he referred them to me and I had met their accountant through some general networking that I had done.

Let's analyze the sequence of referrals described above. Early in my career, I made a point of joining the local chamber of commerce to meet other business owners and professionals. I met John, the CPA described above, at a chamber event. John was one of the few accountants I had met who was not also engaged in the financial services area so he was a logical referral source. Believe it or not, he referred me very few people over the years no more than five but one of those referrals was to his clients Dennis and Janice, and the rest, as they say, is history. If you add up all of the clients that John is responsible for due to his referrals (and their subsequent referrals), it comes to 21 different households!

There are several lessons that I draw from this true story:

1. You can never do enough networking in this industry. You just never know who you've met that knows other people who need your services.

2. Always be on your game. When I met John the CPA, I made sure I articulated what I do and how I help people in a most impressive manner. This clearly motivated John to think of me when the time to make a referral came.

3. Treat every client like they are your best client. Many of the people in the referral string I described do not have millions of dollars with me (like others do), yet I give every one of them the "Rolls Royce" treatment-- and it pays off.

4. You do not necessarily have to ask for referrals to get them. In this particular example, I did not ask for one of these referrals. I attribute this to the "over-the-top" services and superb advice I provide to my clients. In my experience this in itself can inspire your clients to make referrals without you ever asking.

5. If you always act in your clients' best interest, you will be rewarded over the long term.

I can go on and on about the powerful lessons I learn every day from the business decisions we make. In this case, it took a simple question from my employee to trigger a mental exercise that reminded me of the power of referrals and how everything we say or do properly as professionals can and will come back to reward you many times over.

*For further information or to contact this author, please use the forum below.

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