When A Referral Is Not The Best Way To Get New Business

Monday, March 12, 2012 09:23
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When A Referral Is Not The Best Way To Get New Business

Tags: Anatomy of the Referral | marketing | practice management | referrals

It’s been said that the easiest way to grow your business is by getting referrals. Coaches consistently admonish advisors to ask for referrals. Program after program has been developed to help advisors master the process. Some encourage creating advocates out of clients, eliminating the need to ask for them. That sounds like the ideal way to get new business. After all, your ideal clients’ friends tend to be like them. Or do they?
 
Other referrals from ideal clients may be family members. Wealthy people like to help others so the referral may even be for someone whose assets are below your account minimums. This is where other criteria must come into play. Perhaps the referral is young, has already developed good financial habits and is looking for guidance—and has the potential—to become an ideal client. In other cases, a referral from an ideal client may end up costing you more and becoming a drain on your business. What stories do you have of such cases and how did you handle them?

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Comments (2)

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I have my clients state their minimum account size when requesting referrals -- usually at least $250K. I suggest they develop a relationship with another advisor who is willing to take smaller accounts with no growth potential.
This e-mail address is being protected from spambots. You need JavaScript enabled to view it , March 12, 2012
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lisagray
That's a great idea but I'm not sure it's that easy. The pressure comes in when a client with significant wealth wants an advisor to work with a family member or close friend who may not meet the minimums. This pressure can be tremendous since the ultra wealthy are accustomed to people doing what they ask them to do. In such a case, advisors may not wish to harm the very significant relationship. Here's where understanding how to work with the ultra net worth can be an advantage.
lisagray , March 13, 2012

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