No more referrals left?

4 replies
This advisor to financial planners posted about the death of referrals in that industry and the increasing need for non-referral business marketing methods. One reason for the death of referrals is that there are just few unattached clients left in that space. What about your business? Are the referrals "running out?"

https://www.kitces.com/blog/death-of...ormance-study/
#left #referrals
  • Profile picture of the author Claude Whitacre
    Originally Posted by joe golfer View Post

    This advisor to financial planners posted about the death of referrals in that industry and the increasing need for non-referral business marketing methods. One reason for the death of referrals is that there are just few unattached clients left in that space. What about your business? Are the referrals "running out?"

    https://www.kitces.com/blog/death-of...ormance-study/
    For me, referrals always tended to clump into social, business niche, or employer groups.

    So, for every "Nest" of referrals, I would start to eventually get the same names.

    But there is an easy way out of that. If you are seeing a group of Barbers, referring you to other barbers in the area, you simply ask for names of people they have talked to (about your service) outside that niche.

    So, you might get a pharmacist, who refers other pharmacist, and you ask for the names of people in other businesses...people who are not pharmacists.

    Everyone pretty much belongs to several niches, maybe a professional niche, a hobby niche, a church niche, and a local service organization they belong to.

    But eventually, you start having to dig deeper for referrals, and that's why other forms of marketing help.

    When I would cold call, my sales from that would get me owner referrals, and that would start new nests of referrals. Advertising, networking, and online marketing will also bring in "Fresh meat".

    But I can't believe that referral selling is dead for any industry.

    Right now, somewhere, someone is bragging about something they bought from you. And the person they bragged to...is your referral. And people never stop bragging, and so there is an endless supply of referrals.

    I will admit that some people simply don't like giving referrals, but the ones that give you a few, can continue forever. I have a few customers that gave me 100 sales from their referrals. That's 100 each. And you can bet I al;so got referrals from those sales.

    When you make a sale by referral, that new customer is primed...trained...expecting to give you referrals.

    It's just that so many salespeople are terrible at asking for referrals, terrible at getting introduced, and terrible at the follow up. And so they say "Referrals don't work".

    Well, they always did for me.
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  • Profile picture of the author eccj
    Originally Posted by joe golfer View Post

    This advisor to financial planners posted about the death of referrals in that industry and the increasing need for non-referral business marketing methods. One reason for the death of referrals is that there are just few unattached clients left in that space. What about your business? Are the referrals "running out?"

    https://www.kitces.com/blog/death-of...ormance-study/
    That industry has some problems:

    1. All the firms are exactly the same - Being a fiduciary used to be somewhat different; now everyone is a fiduciary.

    Also the industry is so heavily regulated that going outside the tried and true is a great way to get sued.

    2. Everyone is going after the same clients - Believe it or not there are only so many people that have $10,000,000+ in liquid assets. There are literally more advisory firms trying to sell those people than there are people.

    When all you have to sell is yourself it is hard to get referrals. People talk about a product and an outcome.

    I've seen this first hand with a someone I am working with - an advisor actually.

    Started putting people into a specific product that people understand and talk about. Referrals have gone through the roof.

    Most advisors strictly take a "holistic" approach that their clients don't understand enough to verbalize and they think that it is so specialized to their situation that the clients could never talk about it with others.

    This is a new revelation to me. I always thought that people referred people but they don't, people are secondary to the product and the outcome.
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    • Profile picture of the author Claude Whitacre
      Originally Posted by eccj View Post

      Started putting people into a specific product that people understand and talk about. Referrals have gone through the roof.

      Most advisors strictly take a "holistic" approach that their clients don't understand enough to verbalize and they think that it is so specialized to their situation that the clients could never talk about it with others.
      Yup, being product specific allows the referrer to concentrate on who they think would like a product. The other approach is "who would benefit from my service?"

      The "product specific recommendation" is easier to ask for, but limits the responses to product, and not "others who might benefit from my advice".

      Maybe the best book I've read on this whole subject (other than my own) is Beyond Referrals by Bill Cates.

      You learn the entire process of positioning giving referrals as a favor to their friends, not a favor to you.....to how to qualify referrals, contact, and lots and lots of scripts that would actually work in real life.

      Here's a link.

      https://www.amazon.com/Beyond-Referr...dp/0071791663/

      Not an affiliate link, I swear to God.
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      One Call Closing book https://www.amazon.com/One-Call-Clos...=1527788418&sr

      "Be kind. For everyone you meet is fighting a hard battle".....Ian Maclaren
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  • Profile picture of the author heterpack
    The best way is to reduce your selling process and price of sales is to sell through referrals
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