The best route to high net worth referrals
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November 18th, 2009 by Dan Richards, ClientInsights.ca
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Earlier this year, I conducted a series of workshops sponsored in part by Mackenzie Financial.
Recently, a Mackenzie wholesaler emailed me with a question from an advisor, curious if I had any ideas on how to initiate referrals targeting million dollar plus clients.
As you move up the high net worth ladder, confidentiality becomes a bigger and bigger concern – and anything resembling a traditional mass market approach to referrals simply doesn’t work and in fact can harm the relationship.
The result is that many advisors who work with high end clients adopt a “build it and they will come” approach to referrals – they focus on doing good work and rely on that to be sufficient to motivate clients to mention their names to friends.
The problem with this approach is that in some instances you’ll get referrals just by doing good work, they’ll generally be fewer in number and take longer than most advisors would like.
Happily, there is an approach that maintains a professional relationship while increasing the odds of getting referrals.
About four years ago, I conducted research on the topic of referrals among investors with assets of $250,000 or more. As part of that, I asked investors about 30 different approaches their advisor might take in bringing up referrals.
There was one approach that scored highest among clients across all asset levels.
Most communities have an organization which brings in high profile luncheon speakers – the Board of Trade, Canadian Club, Rotary, Kiwanis, Economics Club or the like.
Start by splitting a table of ten at a luncheon with a speaker with broad appeal – someone like Mark Carney for example.
You and your colleague will each end up with five tickets, these are typically priced at $40 or $50 each, so your investment for five seats might be around $250.
Next invite two key clients to attend who you think would find the speaker of interest.
Once clients accept, tell them you’re delighted they’ll be able to join you and then ask if they’d like to bring a guest along, saying you have another ticket available.
Once you’ve said that, there are three ways to proceed:
First you could say: “Is there anyone you know who might also be interested in coming out to hear Mark Carney?”
The difficulty is that you’re asking the client to do all the work in thinking of someone – and the chance that they’ll be a prospective client you’d like to get to know is left to random chance.
Better is narrow it down by saying: “Is there anyone your partners colleagues at work who might also be interested in hearing Mark Carney?”
This makes it easier for the client to identify a candidate to join you and also heightens the odds they’ll be someone who’d be a possible prospect.
Best is to say: “In the past you’ve mentioned your accountant John Smith (or your brother Rob or your partner Jane). They sound like someone I’d like to get to know – do you think they might be interested in joining you at the lunch as my guest?”
This approach does all the work in helping clients figure out who to focus on – and also maximizes the odds that the guest sitting at that table between you and your client will be someone you want to get to know.
In the case of your client’s accountant or lawyer, you could take the client off the hook entirely and say “Would it be okay if I called John up, mentioned that you’re coming to this lunch and invited him to join us?”, so that all the client has to do is agree and then you do the rest.
Advisors who’ve tried this approach have reported great results – it’s non- threatening, provides clear value to both your clients and their friends and is absolutely professional.
In the perfect world, we wouldn’t have to put strategies in place to accelerate referrals – good work would be its own reward and referrals would come just by doing a great job for clients. In the real world, to maximize referrals we need to put strategies in place that are comfortable both for us and the clients we deal with.
As you think about your marketing budget for 2010, consider setting aside the funds to pursue this idea once a quarter. Get on the email list for organizations who bring in high profile speakers and make a point of being proactive in thinking about speakers you could invite key clients to join you to hear – and to use the opportunity to get closer to someone in your clients’ network you’d like to get to know.
About ClientInsights.ca A breakthrough in client communication Not long ago, clients read what you sent them. Today that's changed. In the You Tube world we live in, many investors would prefer to hear from a portfolio manager directly. And instead of reading an article on tax saving or estate planning strategies, more and more Canadians would rather watch an expert discuss the topic. Clientinsights.ca was developed in response to these changes - to deliver information in the form that investors want to receive it. It provides over 150 short video interviews, each about 4 to 6 minutes - you can email them or watch a video along with clients to start a meeting. No matter how you use it, Clientinsights.ca is designed to help you take client communication to a higher level. Dan Richards Founder and CEO, Clientinsights.ca Read more from the author/contributor here.
Tags: Asset Levels, Best Route, Club Rotary, Colleague, Confidentiality, Economics Club, Instances, Kiwanis, Kiwanis Club, Ladder, Luncheon Speakers, Mackenzie Financial, Mark Carney, Market Approach, Mass Market, Odds, Problem With This Approach, Professional Relationship, Referrals, Rotary Club, Traditional Mass, WholesalerPosted in Dan Richards | No Comments »
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