The quest for more referrals seems to always be at the forefront of advisors’ minds these days.
Should the advisor ask for referrals? How will the client respond if asked?
It certainly is a dilemma.
What adds to the befuddlement is some marketing companies will tell advisors how they should ask for referrals; use these questions, use this setup, send that automated campaign, provide this questionnaire, send this letter.
It is exhausting the amount of “solutions” that are available, and many of these marketing companies will still have a glaring omission from their suggestions which can inadvertently set up advisors to fail.
You cannot ask for referrals if you are not referable in the first place.
To clarify this problem, let’s reframe it. Think about going to a restaurant.
You walk in and there is no one at the front desk. You see people in the back talking, and you know they can see you; however, they seem to be turning their backs to you and hiding. After about ten minutes of waiting, someone finally comes to the front desk and gives a sigh as if you interrupted his break.
How rude! But it gets worse.
Once you sit down at your table, you notice it’s sticky from not getting cleaned. The service is slow, the server gets your order wrong, does not bring you refills, and even when your food comes out, it is undercooked and inedible. Furthermore, when you finally get the bill, it contains items you never ordered in the first place.
The situation is such a mess and you are frustrated.
All the while, the restaurant staff makes you feel like the inconvenience – like it’s your fault your visit was terrible. It is absolutely the worst experience you’ve ever had at this restaurant and rest assured you won’t be going back.
So, when that restaurant has the audacity to ask if you will come back with your friends and family next time, how do you respond?
This is a no brainer.
For a financial advisor, this scenario may be a bit extreme, but the point is still valid. Being referable is paramount.
The Advisor’s Dilemma – loosely based on the classic thought experiment, the Prisoner’s Dilemma – dives deeper into the importance of being referable by showing several scenarios when an advisor asks clients for referrals.
Think of it in terms of a game.
In this game, a player can only win or lose (i.e., no stalemates). The advisor wins when a referral is given, and the client wins if the advisor is referable. Contrarily, the advisor loses if a referral is not given, and the client loses if the advisor is not referable. The object of this game is for both the client and the advisor to win, and it definitely is possible.
Let’s put the possible outcomes of this game in a table:
|Advisor is Not Referable||Advisor is Referable|
|Client Does Not Give Referral||(1) Client Loses / Advisor Loses||(2) Client Wins / Advisor Loses|
|Client Gives Referral||(3) Client Loses / Advisor Wins||(4) Client Wins / Advisor Wins|
(1) Client Loses / Advisor Loses:
In this outcome, the advisor asks for referrals, but does not get them because he/she is not referable. This is the same as the restaurant example. For advisors, this could be detrimental to their business and should be the avoided at all costs.
In order to fix this, the first step is to focus on activities that make the advisor referable. Call us here at Platinum and we can walk you through 4 simple steps to becoming referable.
(2) Client Loses / Advisor Wins:
The advisor wins, but it is a hollow victory. Anytime a client loses, can we even count it as a win? Not a chance. As an example, the advisor receives a great referral from a client, but then delivers poor service, no follow-up communications, and no thank-you cards. The onboarding process is actually not a process at all, and steps are late or outright missed. The client looks bad and the referral feels cheated.
With that, the advisor’s “win” isn’t really a win at all. This is an unacceptable outcome and should also absolutely be avoided.
(3) Client Wins / Advisor Loses:
In situations like this, the advisor may ask for a referral, but they do not get one. The hard part for many advisors to understand is this is an okay scenario. Some clients may never refer while other clients may not have someone to refer right now but will later.
It is similar to an advisor planting the seeds for referrals now to reap the harvest later. They may have lost in the short term, but they are definitely in a good position to win in the long run. The solution here is to shorten the time between planting and harvesting. Give us a call here at Platinum and we can walk you through how to shorten that time span.
(4) Client Wins / Advisor Wins:
Here the advisor gets a high-quality referral and the client looks like a rock star to that referral. The advisor does ongoing client events, relevant and frequent communications, and has processes to keep their office running smoothly and efficiently. The referral feels as if they made the right decision to join this practice and the client feels wonderful for not keeping the advisor a secret.
* * * * *
Who doesn’t love a story where everyone wins in the end?
The only acceptable options for an advisor are when the client wins. Period. And the only way the client wins is if the advisor is first referable.
A marketing and client-service plan is only effective when the client is the winner, but the advisor’s business thrives when the advisor gets the win/win. Here at Platinum, we strive for the win/win. That is why we create practice management and marketing solutions that assist advisors in getting to that next level.
With the right branding, communications, systems, and events, the advisor can become referable. Only then can they successfully ask their clients for a referral and resolve the Advisor’s Dilemma.