How to obtain quality referrals


One of the best ways to generate new business is through existing clients recommending your services to their friends, family and a wider network but it can be daunting asking clients to recommend your practice.

Here, we consider how to take advantage of this potentially lucrative business channel while ensuring relationships with your existing clients remain intact.

According to David Smith, founder of practice management specialist advisers Smithink, one of the ways to encourage referrals is to ask for them. “The vast majority of advisers don't ask for referrals because they're not comfortable doing it. The best way around this is to find your own style. First, show you're genuinely interested in helping other people,” says Smith.

“Saying something like, ‘I hope you're happy with the work I've done for you. We're always looking for new business. So if you know someone who may value our services, we'd love to talk to them.’ It's a soft way of doing it,” he says.

One reason people don't refer other business is because they may think you're too busy, Smith says. “So you have to be careful about what you say to people when they ask about your business. The tendency is to say, we've got heaps of work, or I'm really busy. That sends the wrong message. If somebody asks me how I'm going I say, ‘Really well, thanks. And I'm always looking for new work. Always indicate you’re available and interested in new work.’”

Underpinning this is doing a fantastic job, because it’s hard to attract referrals if customers are not happy with your work.

Adrian Patty is the director of innovation at Advice Revolution and says one of the best ways to get client referrals is to do a great job. “Offering a great experience is the best way to get referrals. You do this by putting a lot of effort into the client’s experience and making sure you always communicate clearly to the client during the advice process, especially in the early days,” says Patty.

“It’s easy to forget the client is taking in so much information during this time. So removing the overwhelming nature of that experience and making them feel like they're in control helps them feel comfortable through that journey.”

Another way to ensure the client experience is as good as it can be is to have plenty of touch points through the advice journey. “Remove as many friction points as you can. Also try to remove the complexity in the process for the client. That's always a challenging one because often there's a huge amount of learning to be done by the client when they enter into the advice process,” Mr Patty says.

Asking outright is a great way to generate client referrals. “Definitely ask directly for referrals. Prove what you do and take your clients through that journey. And once you have delivered, you're in a position to say, ‘We achieved what we set out to do, would you be comfortable referring your friends and family?’” Patty says. “But before you do this, it’s really important the clients fit your target market and their associates are also among the cohort of people with which you want to be working. Sometimes you can end up attracting the wrong people if you're asking the wrong clients to refer you.”

For instance, if you specialise in advising young families, it may not be ideal for them to refer their parents, even if your original client would be very pleased to refer them. So, be clear about the target market on which you wish to focus.

Building your courage to ask for referrals

Many people feel uncomfortable asking for referrals but many experts say practice makes perfect.

“Just start doing it. The more you do it, the better you’ll get at it,” Smith says. “I encourage firms to have some accountability around this. Start a system in which people report every month on the number of times they've asked clients for referrals. You are putting your advisers outside their comfort zone and you need some way of maintaining pressure on them.”

Patty says the way to get around any feelings of discomfort when asking for referrals is to have confidence in your work. “Be self-assured in the service you're delivering and the value you provide. If you find this tricky, that's something on which to work. If you know you’re making a positive impact on your clients’ lives, there’s no reason why they should not refer you,” he says.

Next: Developing a more personal approach to client engagement

How having a deep and meaningful conversation with your clients can improve retention, increase referrals and deliver better outcomes.

Access the latest in practice insights, market news and articles to help you grow your business.

While the Royal Commission was a challenging time for financial advisers, research shows that people receiving financial advice are highly satisfied.
A growth mindset is the belief that intelligence, talent and personality can be developed, especially through seeking new experiences and learning from failure.
The structure of a business can play a fundamental part in its success and longevity. Explore the latest articles to help you realise new opportunities and grow your business.

This article was prepared by BT, a part of Westpac Banking Corporation ABN 33 007 457 141, AFSL and Australian Credit Licence 233714. This information is current as at 30 July 2019.  This article provides an overview or summary only and it should not be considered a comprehensive statement on any matter or relied upon as such.  It does not take into account your personal objectives, financial situation or needs and so you should consider its appropriateness, having regard to these factors before acting on it.

The information contained in this publication is an overview or summary only and it should not be considered a comprehensive statement on any matter nor relied upon as such. The publication does not contain, and should not to be taken to contain, any financial product advice and it has been prepared without taking into account any person’s objectives, financial situation or needs. Because of this, you should, before acting on any information contained in this publication, consider its appropriateness to your clients, having regard to their objectives, financial situation or needs. Any taxation information contained in this publication is a general statement and should only be used as a guide. It does not constitute taxation advice and is based on current laws and their interpretation. Each individual client’s situation may differ, and your clients should seek independent professional taxation advice on any taxation matters. Any graph, case study or example contained in this publication is for illustrative purposes only, and is not to be construed as an indication or prediction of future performance or results. While the information contained in this publication may contain or be based on information obtained from sources believed to be reliable, it may not have been independently verified. Where information contained in this publication contains material provided directly by third parties it is given in good faith and has been derived from sources believed to be accurate at its issue date. It is not the intention of BT or any member of the Westpac Group that this publication be used as the primary source of readers’ information but as an adjunct to their own resources and training and should therefore not be relied on for the purposes of making any financial recommendations or an investment decision. To the maximum extent permitted by law: (a) no guarantee, representation or warranty is given that any information or advice in this publication is complete, accurate, up to date or fit for any purpose; and (b) no member of the Westpac Group is in any way liable to you (including for negligence) in respect of any reliance upon such information.