Oechsli Institute research
, there is a major difference between asking for an introduction and asking for a referral. Eight out of every ten clients will be happy to introduce you to someone they know. That same number will feel awkward when you ask for a general referral—they feel imposed upon. However, they will be happy to refer you to friends if it occurs organically. The better you treat your clients, the more likely they are to provide unsolicited referrals. Oechsli Institute data also shows that the majority of advisors are not capitalizing on this phenomenon.
The difference is this, introductions are simply putting you in contact with another person, while referrals are vouching for and recommending your business. I am very comfortable asking for an introduction, but I rarely, if ever, ask for referrals. While we all want referrals, they are most powerful when they are spontaneous and freely given.
I’ve found several ways to increase unsolicited word-of-mouth referrals so that now, nearly all of my new clients come to me because they know someone I already work with. The following are two examples of how to create relationships that will yield effective referrals:
Engage with built-in referral networks
Bankers and other professionals in the firm can refer business to any number of internal advisors. Thus, we always make an effort to get to know these organizational professionals so that we are on their radar. We invite them to our events, where they get to know us personally, as well as to see what we do. Like anyone, they will refer more business to those they know and trust.
Set up a networking group of other professionals
Forming a networking group isn’t difficult, but it takes some time to identify the right members. Create an environment of professionals who are at similar stages of their careers and align with your achievements and goals. Each member should be a professional working with wealthy individuals (or aspiring to work with wealthy individuals), and membership should be limited to one person per specialty.
Ultimately, the success of your business will be based on the relationships you have with current clients and colleagues. Create opportunities for introductions and let your work and reputation do the rest.