Why Referrals Are The Most Dangerous Way For Financial Advisors To Grow Their Business (and the best)!

As some of you may know from following my story on other channels I have been a fan of CrossFit for some time.  What many of you didn’t know was that I have had a difficult time with that relationship because of the actions, over time, of that founder and owner of Crossfit, Greg Glassman.

In short, he has made a massive social media mistake and damaged the value of his brand and, more consequently, the thousands of CrossFit affiliates (independently owned gyms that pay a fee to use the brand CrossFit) and their employees and clients around the globe.

You can learn more about that situation if you wish, but, it is just the introduction to todays letter.  Referrals are a tremendous tool for growing your business and living a life of purpose and value…because of how they can impact relationships.  This is a double edged sword:  Trust is either growing or decreasing…it is never static and unchanging.  What has happened to all the CrossFit affiliates is that the brand they have been paying to help grow and develop just got devalued through no fault of their own.  It reminds me of when referrals go bad.

There are three people involved in the most basic of referral situations:  (1) The person giving the referral introduction, (2) The Client being referred and (3) The professional being referred to a prospective client.  The person that has the most at risk and that should receive the most benefit is #1.  The person who has the least amount of risk and who should receive the least benefit is #3.

Unfortunately, this isn’t taught by many sales and/or referral experts because it is not warm and fuzzy.  Referrals are the most dangerous way to grow your business because you can’t hide behind a marketing funnel or billboard ad if you lose focus and hurt someone else’s reputation.  My favorite saying, that I repeat without fail when training a new referral partner is this:  “At the end of the day, when I give you a referral to a client/friend of mine, I expect it to come back to me. I don’t want to lose a client because I introduced them to you and, ideally, I would expect that you would enhance my reputation with my client through being introduced to them.”

Some rules to follow:

1.  Don’t assume.  There is a reason we do scripting on how to give and manage referrals with my clients, whether we are doing a full fledged coaching/consulting relationship ongoing, or, we are just doing a customers referral marketing plan.  You not only need to know WHAT to say, you need to know exactly WHEN and HOW OFTEN to say it.  ‘Handling’ referrals is a massive growth opportunity, or, the graveyard for your dreams of referral growth.

2.  Focus.  Prepare for meetings with referrals given to you with just as much focus and research as you would do with the largest prospect you can imagine.  Remember, you need to bring that prospect back to the referral partner that introduced you…better than you got it.  This takes mindset, skill and a plan.  You can’t wing this and expect it to work long term.

3.  Be a Fiduciary.  Always do what is in the best interest of the client.  This is a familiar term for most of my clients (Financial Advisors), but, we need to expand this for referral marketing.  You need to add both the person being referred and, most importantly, the person referring the prospect into your mindset of doing what is the best interest.  I would always rather not do business with a prospect if it isn’t clearly beneficial to them and keep a referral source/client happy…than to push hard and burn a referral source.  Remember the parable of the Golden Goose!  Treat it right and it will keep giving you golden eggs…treat it wrong and it is gone.

If you have any questions about this, whether specific to your individual situation or in general, don’t hesitate to reach out to me at my cell phone:  540-314-5665 (US).

As always, I appreciate you reading and hope that something was of value to you.  If it was, please share this with others like you…folks that you want to help navigate the future in such a way that they can impact other people beneficially.

Think critically.  Train to get stronger.  Practice compassion and empathy with others.  Rest and recover so that you can do all the above better tomorrow.

I have time, desire and capacity to help you and those that are most important to you.  Don’t hesitate to connect with me and/or introduce me to other business people you believe could use my help whether or not they might be a prospect.

Peace,
Mike

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There is a ton more I want to share, but, this was probably enough…don’t you think?  Next week I will have another newsletter for you on Sunday…make sure you look for it then.

Please share this to anyone you think might benefit from it.  While we are focusing on Financial Advisors…all of this stuff can help other business owners that are motivate to improve.

If you have any questions about the material, or, need some help please reach out.  Whether or not you are a client is a different discussion for another day…if you need help we can do that now.

My email is mike@valuesbasedmindset.com…I check it too often.

All the best,
Mike

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