My last blog was on why “Why Referrals Rock At The Top Of The Funnel”. Today I am going to dive deeper into why referrals don’t get used there by Financial Advisors and other sales professionals. The real reason we don’t get more referrals from the folks we should (clients) is because they are trying to refer us deals.
This means that you are losing a ton of potential referrals before you are even aware of the opportunity. Your clients are pre-screening your potential business for you and that is a horrible thing for you and your firm.
Here are some reasons why Financial Advisors and the firms they represent allow this tragedy to happen:
Reason 1: Bottom of the funnel referrals (done deals) feel like success to most FA’s that don’t understand referral marketing and are afraid of sales.
I will be the first to admit that I get pleasure from a new client that is given to me without any effort on my part to qualify them. It feels great to have someone ask to do business with you instead of you having to ask them doesn’t it? The problem is that you don’t see how many people your client/referral source had to talk with to find that one person ready to buy from you…before they met you (Unicorn). I think we relegate referral marketing to this limited impact on our growth because we are afraid of sales.
When you are only getting referrals that are delivered at the bottom of the funnel and are ready to buy with minimal effort you can be lulled into complacency when it comes to prospecting and you can lose control of the future of your business pipeline. You have to know where the next quarter’s new business is coming from or you are mistaking ‘hope’ for a solid business strategy.
How can you scale or replicate hope?
Not well, I contend. Your fear, or worse, apathy towards taking control over your own growth, has allowed you to miss out on the massive potential of referral business done right: All In.
Reason 2: You are losing too much potential business and aren’t even aware of it
Marketing can be a seductive mistress selling mediocrity for Financial Advisors. The temptation to automate how you get prospects to meet with you is significant, especially if you haven’t become skilled and comfortable at doing your own business development. If you learn anything else from this blog you have to understand how easy and essential it is to have your own referral based marketing system up and running.
Here is what is happening right now in your client base: Your favorite clients, the ones that want to refer you the most, are trying to do so and failing miserably. Each failure leads to less referrals.
Your clients are talking to people about you and trying to get those ideal prospects of yours to decide to switch from their current advisor to you right now…and those prospects are saying no.
In my decades of experience with referral marketing I would estimate, conservatively, that you lose 10 prospects for every deal you get in this referral paradigm. This is not acceptable. These same prospects that are saying no to buying from you without meeting you (done deal referrals aka Unicorns), with a real referral marketing plan could easily be induced to meeting with you because of WHO you are instead of WHAT they would be buying.
I am NOT saying to avoid marketing, in fact I love it for accelerating prospect movement through the sales funnel. What I am saying is that Financial Advisors, because of the tremendous significance of what you do, are uniquely positioned to powerfully and profitably leverage referrals at the top of the funnel.
You don’t need to depend upon a marketing funnel to deliver you all the business for you and your firms current and future needs…you can do it on your own.
I encourage clients to look at marketing as supplemental to their referral efforts and to spend time and money on it. Emails, social, websites and funnels are awesome tools that will bring you some business, but, most importantly make your referral marketing even better. Remember, if referrals are what you really want…they have to be the foundation and everything else must be integrated around them.
Reason 3: You have never developed a conversation structure with potential prospects that doesn’t involve them being asked to work with you…can you have a conversation without talking about how you get paid?!?
This is the real reason your clients keep trying to refer you Unicorns.
They know, because you taught them by how you treat and speak to them, that you are only interested in helping people that pay you. That might sting a bit.
Instead, you need to develop a plan to become increasingly known in your network and community as someone that is always willing and able to help others without worrying about whether or not you get paid. I work with clients to develop and customize exactly these plans….we call them referral giving plans.
Your clients, unless you train them otherwise, are always going to be afraid of wasting your time by introducing them to their friend that ‘loves’ their current financial advisor and told them so. You need to have a system that trains them to introduce you to these friends and colleagues regardless of whether or not they are in the market for a new advisor because of how valuable a social meeting with you is. Givers get introduced and takers wait for Unicorns.
A big part of turning this around is planning on having conversations with highly desirable prospects that involve helping them in any way you can…and most importantly, having the confidence that you are able to do so. You can do this!
If you have any questions or concerns I am only an email or phone call away. I love to talk to Financial Advisors about helping you to grow your business, whether you are a solo advisor, or, a member of a regional firm.