How to Ask for Referrals the Right Way

by | Mar 11, 2019 | Advisor Blog

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HOW TO ASK FOR REFERRALS THE RIGHT WAY

Referrals may be the most basic form of growth marketing, but they’re anything but simple.

The idea of asking your customers to tell their friends and family about your goods or services is presumably as old as commerce itself. But the transactional nature of business relationships can make asking for favors that fall outside the scope of traditional compensation awkward, to say the least. From a client’s perspective, they’ve already paid you for your work, why should they take time out of their busy life and put their personal reputation on the line recommending you when they get nothing out of it? In fact many people might even think, if they bring you more business (more clients), will that negatively affect their relationship with you by decreasing the amount of time available to work on their accounts.

The desire to avoid burdening or alienating clients is the single biggest reason why advisors do not ask for referrals. Indeed, surveys show that only 1 in 10 advisors are proactively asking for referrals. However, those who do reach out for referrals tend to reap major rewards – referrals are the #1 source of new business for financial advisors. Simply making your clients aware you are looking to grow your business is often the easiest way to put clients in the referral-making mindset.

The key to making referrals work is to ask the right way. Here are some suggestions to help you optimize your approach to this important driver of business growth.

Make sure your clients are satisfied.

If you’re worried that asking clients to refer you might damage your relationship with them, ask yourself whether it might be because they’re not so impressed with your service that they can in good faith tell their peers to do business with you. This is possibly the biggest risk of asking for referrals, as it can bring to a head a situation that’s been simmering until now. It can cause clients to take a hard look at not only do they feel comfortable referring you, but do they themselves really need your services either.

So before you start asking anyone for a referral, take an honest look at your current practice. If you’re not getting outstanding results, hold off on the growth strategy for now, and instead work on improving your current service. One way you can do this is by gathering feedback. Asking for feedback during mid-year reviews, for instance, can help you gauge your clients’ opinions about your services.

On the plus side, improving service alone, even without actively asking for referrals, can help build word of mouth (i.e., the organic chitchat that occurs naturally between friends, family and colleagues that can influence your reputation and drive – or drive away – business.)

Be selective with whom you ask.

Not everyone has the time or the desire to be your advocate. But an advocate is what you need if you want people to share your information with their community. That’s why retail brands enlist advocates or “influencers” to drive business. These people love the brand and are connected with many other people that might like the brand, so it makes sense for brands to center their marketing efforts around these individuals.

While the business may be different, the principle of honing in on those most likely to promote your services is just as applicable for investment advisors. The key is uncovering who among your current clients fit that description.

When identifying which clients to ask for referrals, you must also consider which client is most connected, and in turn, how far their good word will take you. In most cases, your biggest, wealthiest clients – the small percent that make up an outsized proportion of your business – are going to be the most connected. These people are extremely busy and very picky, to be sure, but given their position, it is worth the time and effort of asking them to help you drive your business’s growth.

Ask the right way.

Once you’re sure you are providing the best quality service to your clients, and you have selected the best potential advocates for your business, you now have to begin the delicate process of the referral conversation. There’s a major but subtle distinction between a conversation and a “pitch”. Most people do not like to be pitched to, but having a conversation about needs and goals is much easier to transition into asking for a referral.

  • Understand the psychology: Clients have people they care about in regards to their financial situation. Communicate that you value the people who are important to your clients by asking if they know people who could be helped with what you have talked about in that day’s meeting. Ask them to have their friends give you a call if you think they would be helped by having a short conversation about their questions or concerns. Mentioning that you won’t bring the referral on as a client unless your services fit with their needs shows you are selective in who you work with and provides you a non-offensive way out if the referral isn’t a good fit.
  • Ask at the right time: This is important in at least two senses: scheduling a time to bring up referrals with clients, and bringing it up at the right point during the conversation. It’s important to write it down on your calendar when you plan to bring the question of referrals so that you have adequate time to cover it in your meeting. In many cases, the best time to ask is right after you finish reviewing their accounts and highlighting the outstanding results you have provided, but before you wrap up the business discussion.
  • Keep it casual: As investment advisor coach Paul Kingsman puts it, keeping the referral request casual and comfortable shapes the request as a generous offer to help, rather than a hurdle your clients have to jump before they can leave their meeting with you. “You want to help your clients make the connection between how you help and conversations they have with their friends and family. And, you want to do that using effective language that sounds authentic, leaves everyone feeling good, and can be repeated over and over.”
  • Make it easy to refer you: Gone are the days of handing out business cards for clients to share with their friends. In this digital age, consumers are empowered with a variety of data sources to do their own research before even contacting you. They expect you to have a modern website before even considering a call to your firm. According to marketing consultant Dan Allison, president of Feedback Marketing Group, advisors lose out on 80% of potential referrals because their clients can’t properly articulate the services their advisors offer. Your website should clearly outline your value proposition and all the products and services you offer, making that first call or meeting with a prospective client more beneficial to both parties.

The best thing about referrals is that they’re free. Unlike paying for ads or conference booths or speaking opportunities, referrals give you the opportunity to grow your business by catering to the people that are most likely to actually need your service and trust that you can meet their needs. If you feel that your business is ready to grow and you’re evaluating various growth strategies, there’s no question that referrals will give you the best bang for your buck. Just be sure to ask the right way.

Christopher Crawford is the Director of Advisor Relationships for the Buffalo Funds. He has 10 years of experience in the financial services industry, previously holding positions at Invesco, IMA Financial Group, and Arthur J. Gallagher. At the Buffalo Funds, Christopher works with investment consultant relations, key account management, institutional distribution and client service. His main goal is to partner with advisors to bring business building ideas and provide unparalleled customer support to their business, always striving to make it easy and reliable to work with the entire Buffalo Funds investment team. Christopher received an M.B.A. from Washington University in St. Louis and a B.S.F.A. from Southern Methodist University. He also holds licenses for the Series 7, Series 63, and Series 65.

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Christopher Crawford
Director, Advisor Relationships
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Finding Your Voice: What Separates You From Other Advisors?

by | Feb 13, 2019 | Advisor Blog

Home > Advisor Blog > Finding Your Voice: What Separates You From Other Advisors

FINDING YOUR VOICE: WHAT SEPARATES YOU FROM OTHER ADVISORS?

When you’re fresh out of college or just learning your trade, it’s easy to hold onto the belief that if you just learn the right skills, then prospective clients will come to you for your services. In an ideal world, this could be true.

Unless your trade is so outrageously in demand that clients can’t afford to be picky — e.g., software engineering — then there’s going to be competition between those who provide that service that will leave at least some professionals with fewer clients — or even no business whatsoever.

Nowhere is this scarcity of clients more true than in the financial advisory world. Between the growing number of financial advisors and the limited number of investors seeking their services, competition between advisors is hearty, to say the least. Given these circumstances, it’s important to ask yourself, why should investors choose you?

To answer that question, you need to market yourself correctly. More specifically, you need a brand. An effective brand strategy will make it easy for your ideal clients to identify you among the sea of investment advisors eager to sign clients up for their services.

But how do you go about building a brand? Let’s first take a look at how people choose investment advisors.

  • Results: You have to be able to deliver. In the context of investment advisory and wealth management, this means understanding and applying the principles of investing you have learned to grow your clients’ wealth consistently and responsibly. But this is just the bare minimum, and any other competent advisor can offer the exact same thing. Successful advisors also work hard to bring in clients by attending to at least these two other factors.
  • Relationships: In highly technical fields where they have little basis on which to judge the quality of the work — think healthcare — people tend to rely on the recommendations of others. This phenomenon is amplified when people are out looking for investment advisors. After all, they’re not just going to hand over their money to a stranger. That’s why the investment advisor with more connections is the advisor more likely to bring in new clients.
  • Trust: Trust is an important part of any transaction, but it’s going to be way more important as the nature of the business becomes more sensitive. Choosing an investment advisor to manage your life savings is naturally on the far end of that spectrum. That’s why referrals are so important to doing business as a financial advisor. But having good references isn’t always sufficient, nor is it the only way to encourage perspectives to trust you. To ensure the trust factor is there, you need to develop a brand identity and voice for yourself that inspires confidence in your target market.

Target Market

How do you know who your target market is? It can be somewhat arbitrary, to be sure — at a certain point you need to just pick a group because, try as you might, you can’t be all things to everybody. But to narrow down which markets you might want to target, think about your own personal values as an investor, as well as your professional strengths and who you tend to get along with best. Let’s say you’re younger, you’re flashier in your personal style, and you’re more aggressive in your investing strategy. In that case, you might want to go after the target market that most resembles your own personality — say, 25- to 35-year-old entrepreneurs and executives.

Branding

Once you’ve chosen your market, it’s time to codify your brand values, as well as the look and feel that you want people to associate with your practice. With regard to the former, you should compile these values into a coherent “about us” or statement of principles that you post online and can include in marketing materials so people know what you’re about. But more importantly, you should commit to following these principles in every business dealing and for every client. This is how you build integrity, a key factor in building trust.

The latter is called your brand identity, and it’s what most people think of when they hear the word “brand.” Your brand identity should reflect your values (i.e., honesty, integrity, accountability, clarity and ethics) and be appealing to your target market. There’s a lot of science and even more art to this process, so do yourself a favor and hire an experienced brand identity designer. And don’t make the mistake of thinking that brand identity is only for flashy startups and tech companies. Every brand, even a traditional one, can benefit from correct typesetting, composition and other design techniques.

After that, it’s all about getting your brand out there. That means organizing your business development activities around your brand. A couple of suggestions:

— Develop collateral and “swag” that’s relevant to your target market. If your target market is an older crowd, then a cool mobile-first web app and a branded phone case will never go as far as a high-quality, in-depth brochure.

— Get yourself to the right meetings, the right conferences, the right parties. Become an active member of the community that people know and recognize. And don’t just take, give back. Volunteer to help an organization with their finances; offer someone’s kid who’s interested in finance an internship. These kinds of actions show you’re a real member of the community, not just there hunting for clients.

These are the kind of thought patterns you need to get into if you don’t want to be just another investment advisor sitting around waiting for clients to come to you.


If there’s one thing to remember about branding, it’s that it only works if it’s consistent.

To reap all the rewards that branding has to offer, all your activities as an investment advisor should take into account the brand you’re trying to build. Do that and people won’t have any trouble telling you apart from the next advisor down the block.

Christopher Crawford is the Director of Advisor Relationships for the Buffalo Funds. He has 10 years of experience in the financial services industry, previously holding positions at Invesco, IMA Financial Group, and Arthur J. Gallagher. At the Buffalo Funds, Christopher works with investment consultant relations, key account management, institutional distribution and client service. His main goal is to partner with advisors to bring business building ideas and provide unparalleled customer support to their business, always striving to make it easy and reliable to work with the entire Buffalo Funds investment team. Christopher received an M.B.A. from Washington University in St. Louis and a B.S.F.A. from Southern Methodist University. He also holds licenses for the Series 7, Series 63, and Series 65.

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Christopher Crawford
Director, Advisor Relationships
Additional Reading: