How to manage referrals and increase fees.

Every practice is looking for new business- the right kind of new client that fits their ideal client profile. Given the increasingly competitive marketplace all practitioners know it takes time to convert a new client and build a relationship that will retain them as clients for years to come.

Many practitioners have tried various business development and marketing tools with varying degrees of success. Listening to the more successful practices I deal with, it is widely acknowledged that the best new business comes from referrals.

Referrals are just those networking contacts you keep in touch with every so often. Every practice should have a referral system that they use consistently in order to generate the best results.

Here is a ‘how to’ checklist of what your referral system should include and how best to manage it;

  • Ensure you manage where each referral comes from, what type of referral it is and what is the conversion rate from this source and type of client. You want this information so you can focus efforts on what gives the best results going forward.
  • Log the details of each referral source and set a system up where you call or contact them every month for an informal chat to keep in touch.
  • Be brave and ask for referrals- say you are growing your business and always interested in new clients that fit your profile. Tell referral sources what your ideal client profile is. Ask how you can refer business back to the referral source- what sor of new business are they looking for.
  • The majority of practitioners do not want to get involved in dealing with introducers fees or any similar arrangement. There are compliance and regulatory disclosure issues to be considered and it also jeopardises the perception of the advisor being truly objective and independent.
  • Review your new clients won in the last 3 years and log where each client came from. Usually a pattern will emerge and you can focus efforts on that particular source ongoing.
  • Remember to thank referral sources for any introduction.
  • Add ‘referrals’ to each client agenda and ask your clients if they know of anyone else you can help. This is especially powerful when you are asking a client at a time when you have completed a piece of work and the client is delighted with the service and support you have given. Most clients will be happy to refer you without thinking ‘what’s in it for me!’ You will now your client best of all and be able to decide if they will respond better to any incentives.
  • Staff are often overlooked as an excellent referral source- get them involved and offer a reward. Every team member will have friends and family who know business owners needing an advisor.
  • Look around you…are you located in a town or industrial estate with businesses around you? If so, introduce yourself and build a new referral relationship to keep in touch with and see how you too can help that business.
  • Banks, solicitors, IFAs are all tried and tested referral sources. Set aside time each month for phone calls and e-mails to keep in touch.
  • Consider ‘sharing’ your ‘Top 100’ list of businesses you want to act for (this is your key business development tool to use for all marketing efforts). I have seen how many introducers and referral sources successfully win introductions through sharing who they want to act for and simply ask to be introduced.
  • Measure who you make referrals to as well. You can then see who you need to ‘encourage’ to reciprocate in referral exchanges.
  • Set your KPIs so you can measure results from the time invested in contacting and nurturing referral sources. You will also want to measure who refers the best type of potential new client as well as the conversion rate and time taken to sign the introduction up as a new client.
  • When talking with referral sources, remember it isn’t just compliance work you are looking for. Share your Menu of Services and talk about the additional services you provide. A new client will often ‘try before they buy’ and test you with a piece of non-compliance work before moving everything over to you. This takes much of the risk out of the changing advisor decision.

Finally….as with most practice management the key is managing your time. Book a couple of hours every fortnight (or similar which fits with your diary) to ‘work on referrals’. Little and often and consistency is the key. Referral sources have to remind continually where you are and the fact you are in the market for new business. It doesn’t have to involve lengthy lunches and entertaining. The modern day is time poor and people prefer short and friendly phone calls with a clear agenda and direct approach.

June 2016 Copyright - Finola McManus, Practice Perfect

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