How advisors can increase their chances of getting a referral

Shauna Mace:

In 2017, in partnership with Absolute Engagement and The Client Driven Practice, we surveyed over 500 advisors to uncover what the most referable were doing differently. Five years later, we decided it was time to see what had changed and what had stayed the same. The most referable firms are those firms that receive more than 15 referrals a year. On average, they receive 26 referrals a year from clients and centers of influence, also known as COIs. Here are the key takeaways from the updated research.

The first key takeaway and the most important - many of the best practices uncovered in the study remain the same. However, there was a clear headline in the 2022 research. The most referable advisors and firms are very process-driven when it comes to referrals along with many other things in their business. Specifically when it comes to having a referral process, the most referable advisors report that they tell their clients and professional partners how to best refer which is by making a mutual introduction. They track leads and the source of the leads in their CRM. They have a formal follow-up process. Contacting the referral directly to see if they're interested in meeting is the most effective follow-up method. They also follow up with the referee. They have a formal process. They take referred prospects through which for almost two-thirds of the most referable firms, include a defined set of questions they ask. And finally, when onboarding a new client, 3/4 of them communicate each of the steps that they will walk through with associated timelines.

The second key takeaway when it comes to tactics used with clients, 2/3 of the most referable firms share stories with clients to highlight problems they can solve. The third key takeaway when it comes to tactics used with centers of influence, also known as COIs, 2/3 of the most referable advisors report working in conjunction with COIs on shared client relationships to reinforce their value and stay top of mind. The fourth key takeaway - the most important stakeholders are your team and COIs. The most referable firms have formally communicated their target market and the unique value they deliver to that target market to their teams and COIs.

Take note - your team is critical to the success of your referral process. The fifth key takeaway: what are the most referable firms doing differently? They have a technical specialization in addition to or instead of a client specialization. And finally, what about COVID? The COVID pandemic has exacerbated the discrepancy between those who are getting referrals and those who are not. Those that were getting referrals before the pandemic reported getting more now. Those who were getting fewer referrals have seen the volume of referrals decrease.

For a summary of the original research and best practices that largely remained unchanged, access The Elements of Referability paper in the Get More Referrals toolkit in the Growth Lab. In the Referral toolkit, you can also access tools to help you develop your referral plan and put these plus more findings to work in your business.