Leveraging clients to get new ones

To do that, ask for referrals with confidence and be sure to customize the approach to each client.

.To do that, ask for referrals with confidence and be sure to customize the approach to each client.

The most efficient and effective marketing you can do is to leverage your existing clients to get new ones. This gives experienced advisers a real advantage. However, many experienced advisers miss this opportunity.

Once the adviser has built a foundation of 50 to 100 client relationships (each with investible assets of more than $100,000), leveraging existing clients is likely to take the adviser halfway to the goal of having 12 new affluent-client relationships of $250,000 each and $12 million in new assets each year.

To be effective in leveraging clients to get new ones, you must be very organized and consistent in your approach. This [article] focuses on referrals.

There is no marketing activity that is more effective than a proactive, organized referral process. If you had to engage in only one form of marketing, a proactive referral process should be it. Eighty percent of most advisers’ new affluent households come from referrals.

If you are in frequent touch with your clients, have a disciplined wealth management process and provide great service, you are in the right position to ask for referrals. As simple as these things are, many advisers do not do them and thus do not have satisfied clients.

High client satisfaction will occur if you contact clients frequently, have a portfolio performance that is consistent with client goals and expectations, and provide great service. This is the prerequisite for effective referral marketing. As an adviser who is committed to having a million-dollar practice, you should have these client satisfaction fundamentals in place.

It is important that you ask each client for a favorable introduction at least once a year. Because each relationship is different, you should customize your ap-proach for each client, but in any case, you should show confidence in asking for a referral, because you can be valuable to anyone a client may refer to you.

The right attitude is not that you are asking for something from the client but that you are offering the client the opportunity to help someone he/she cares about. This concept goes back to providing outstanding client service and working with a manageable number of relationships — each client feels special.

Next, I present several techniques for asking for these referrals.

During a planning session or quarterly review, you can handle asking for a referral in two ways: You can informally ask for a referral at some point or you can provide a written agenda and make “favorable introductions” the last point on the agenda. If you do the latter, it is at this point in the meeting that you bring up the subject of referrals; since it is on the agenda, it cannot be missed. Either approach works well, and the scripts that follow work either way.

“Mr./Ms. Client, I feel good about what we discussed today. I am convinced that this is the right way to do our business. Is there anyone you know who would benefit from this process? As you know, I use a professional approach and would simply offer that person the opportunity to discuss his or her situation.”

If the response is, “I cannot think of anyone right now,” follow up with a letter thanking the client for the planning session. Enclose a pen, along with a note that says, “I wanted to send you a complimentary pen so that as you think of others, you can write their names down,” or:

“Mr./Ms. Client, I hope you feel good about our review and the wealth management process we use. Have you found our process and way of doing business beneficial?”

If the answer is yes, you can continue with one of the following:

“I am glad you feel that way. A lot of people do not go through this type of process, and it is frustrating for me to realize that there are people who really need our help but who do not know about what we do. Are you aware of anyone in that situation?

“Good, because I would like your help. There are many investors who, if they knew what we did, would be interested in doing business with us. What I would appreciate is knowing if you are aware of anyone who might benefit from our approach. Does anyone come to mind?

“Good. As you know, there are investors that we are not working with who would benefit from our approach and who may not be getting the attention or service that they should. Is there anyone you can think of who may be retiring or going through a life-changing event and would benefit from our approach?”

“Mr./Ms. Client, I hope that you feel this review has been of value to you and that you feel as good about our professional relationship as I do. I believe there are many investors who, if they knew about our wealth-management process, would be interested in working with me (our team). My challenge is finding those people so that I can share our wealth management process with them.

“Specifically, I work best with investors who are experiencing changes in their lives — for example, individuals who have recently retired or are about to retire, whose companies have downsized or laid them off, who have moved recently or become divorced, or who have suffered the loss of a spouse. Does anyone come to mind who might be experiencing changes in circumstances that you think I could help?”

If the answer is yes, then:

“Could you introduce them to me?”

If the answer is no or if the client says, “I can’t think of anyone right now,” then:

“I appreciate your giving it some thought and appreciate your willingness to help. I want to add that throughout this year, I will be offering a number of educational and fun events that are designed to appeal to the interests of my best clients, of which you are certainly one.

“There are two purposes for these events: One is to show my appreciation for my clients and the other is to have a non-threatening way for me to meet prospective clients. When I invite you, I will ask you to please invite anyone else you think I should meet and who might enjoy the event. Would you be open to that?”

One of the techniques to increase the number of referrals is to be specific about what you are looking for.

“Mr./Ms. Client, let me be specific about the kinds of people I can help. People who have recently retired or are about to retire, who are changing jobs or relocating, or who are suffering through the loss of a spouse or a divorce are all people that I know I can help. Do you know anyone who is in any of these circumstances?”

“You are one of my best clients, and I enjoy working with you. I would like to build my business with clients like you. Does anyone come to mind (a friend, work associate or family member) who is similar to you and who would benefit from having a relationship with me at XYZ Financial?”

If you are given a name, keep asking, “Does anyone else come to mind?

“Usually when I call you, it is about your investments. Today I am calling about my business. I was thinking that with so much investment uncertainty, there may be some people you could think of who would benefit from my approach. Maybe someone you work with, a neighbor, friend or relative?”

If the client says no, send a pen to remind him to think of others.

“Mr./Ms. Referral, I work with Mr./Ms. Client, and he/she suggested that I call you to share the approach we use at XYZ Financial. May I share with you the process we use that I believe makes us different? Do you have time now, or should we schedule an appointment?” Or:

“Mr./Ms. Referral, my name is Joe Adviser, and I am an adviser with XYZ Financial. I was recently going through one of my planning sessions with Mr./Ms. Client, and I asked him/her if he/she could think of anyone who would benefit from the wealth management approach we use. He/she gave me your name.

“I take my job very seriously and am proud of the approach we use. I was hoping that I might have the opportunity, either over the phone or face to face, to share with you how our approach benefits my clients and find out more about your situation. Is that something you would be interested in?”

Excerpted from “The Million-Dollar Financial Services Practice: A Proven System for Becoming a Top Producer,” by David J. Mullen Jr. Copyright 2008, David J. Mullen Jr. Published by Amacom Books, a division of the American Management Association of New York. Used with permission. All rights reserved.