Filed Under:Annuities, Sales Strategies

4 referral myths that might be slowing you down

The Lead

Don't let these four myths about securing referrals become a brick wall in your marketing strategy.
Don't let these four myths about securing referrals become a brick wall in your marketing strategy.

Securing referrals from clients and others is a key strategy for building your client base and filling in your sales pipeline. But getting those referrals can be difficult. 

Following are four myths about referral marketing that might be slowing you down.

Referral myth #1: Asking for referrals is the easiest way to get referrals

We’ve heard over and over again that asking for referrals is the most direct way of letting clients know that you want them. However, many find it hard to actually ask for referrals. This reluctance makes asking for referrals anything but easy — and for good reason.

Asking for referrals may imply that you are in a negative position and need more business; or that you are trying to grow a large (and not personal) firm. Moreover, when aggressively asking for referrals, it can be all about you, your business, and your sales — not the other person. In fact, asking for referrals may not be a natural extension of the relationship you’ve developed with the client. That’s why we sometimes “forget” to ask even when we’ve been told that asking could help us increase referrals.

In the financial services industry, some of the top producers receive 100 or more referrals each year without direct solicitation. How do they do it? They say it’s the relationship they have with their clients. How would you rate your client relationships?

A periodic proactive call, review meeting or handwritten note can change the way a client feels about you and your organization. It may sound simple, but consistent unexpected acts may give clients just what they need to comfortably, and without prompting, tell others about you.

Referral myth #2: My clients tell me they “don’t know anyone” who needs my services

Have you ever heard a client say, ‘I don’t know anyone’ when you made mention of referring? Do you think that’s true — that they actually don’t know anyone who may benefit from your services? Chances are they know lots of people — they’re just not motivated to give you names right now.

One of the most successful strategies I’ve seen for giving clients a reason to immediately refer is an event called, “Don’t Miss the Boat.”  This is similar to a client appreciation event, however the only people invited are clients that have referred others to your firm. You tell your clients – “Mr. Client, don’t miss the boat! We’re doing this big event on October 19th on the Detroit Star, that dinner boat on the Detroit River.  It’s going to be a gala event with music and dinner and dancing. You and you’re wife can get all dressed up!  But, don’t miss the boat, because the only people we’re inviting are those that have been so kind to introduce others to us.” 

This event gives clients an immediate reason to think of someone. Yes, it may be a little gimmicky, but we’ve never seen this strategy fail and it has consistently produced referrals of 40 or more per event!

referral listen

People are more likely to do business with and send referrals to advisors who listen to them. (Photo: iStock)

Referral myth #3: Referrals will come with performance

Performance alone seldom gets you the number of referrals you deserve. The reality is that even when accounts are performing well, clients may still not refer to you. The real key may be simply listening just a little bit more to your clients.

In the book, Blink, by Malcolm Gladwell, a study is referenced that was done to find out why some medical surgeons never get sued. When looking at surgeons and their practices, they found that the surgeons that didn’t get sued spent on average 3 MINUTES LONGER with each patient. And, during those 3 minutes, the surgeon reportedly just listened.

Interestingly, if something went wrong the patient still sued, but it was the internist, radiologist or someone else that would get sued, not the surgeon. The patient actually liked the surgeon. When the surgeon listened he was silently yet clearly telling the client, ‘I think you’re important enough for me to take a few minutes to hear what you have to say.’

Ultimately, we don’t sue people we like. We also will do business quicker with people we like. And, we refer others to those we like. Can we deduct then that if we are good listeners we will gather more referrals? When we look at top performing practices, it’s probably not a coincidence that more than 50 percent of every meeting is spent listening!

Referral myth #4: Referral acquisition is not a real marketing strategy

Many of your best clients found their way to your firm through referrals. But do you have a system or process for generating the best new clients into your firm? If you don’t, you’re not alone. Having a plan brings focus to obtaining the best leads.

Set a goal for how many referrals you’d like to receive this year. Determine what you will do each week to accomplish that goal. Creating a concrete plan with solid tactics will keep you accountable and focused on referral acquisition. Write it down and share it with your staff!

Breaking the referral myths may change your referral fortunes dramatically. And, the best news is that you can do it without making huge expenditures on traditional marketing. There’s nothing mythical about that!

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Nichole Morford

Nichole Morford
Managing Editor

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