Many uncomfortable about pushing for names of potential customers; 'negative reinforcement'
Advisers who feel sheepish about getting referrals out of clients aren't alone.
Nearly half of advisers say they have asked only “a small percentage” of their clients for a referral, according to a recent online survey of 210 advisers conducted by SEI Advisor Network.
John Anderson, head of practice management solutions at the consulting firm, said the distaste for asking for the names of potential clients is no surprise. If an adviser's first couple of tries at asking for referrals goes badly, “it acts as a negative reinforcement and it becomes uncomfortable,” Mr. Anderson said.
Only 20% of the advisers in the survey said they made a “regular routine” of seeking referrals.
Mr. Anderson said that advisers are missing out on a source of new business if they don't learn to harvest business leads from their current clients. The problem with many advisers' technique is that they simply ask their clients if they know of anyone who might need financial advice, which “puts all the work in [the client's] lap,” Mr. Anderson said.
“You are asking them to take the risk, to figure out who might be a good customer.”
The key, he said, is to be better prepared for the conversation — to the point of having a script if necessary. “Do your research first,” he said. “Look at LinkedIn or other social media, see who they are connected to.”
At his own firm, for example, Mr. Anderson said he is one of three managing directors, all of whom are listed on the firm's LinkedIn site. A smart adviser would ask for an introduction to those colleagues and perhaps suggest a coffee or lunch meeting. Mr. Anderson said that he finds LinkedIn more helpful for referral research than other social media sites such as Facebook
“The key is to be proactive,” he said, “rather than just ask ‘who do you know?'”