A nod to Michael Kitces, who wrote a great summary and commentary in his Nerd’s Eye View blog about a presentation by Julie Littlechild of Advisor Impact presented at the Schwab Impact 2010 conference last week. The bumper sticker summary: Advisors don’t get referrals because they aren’t that referable.
In her landmark study “The Economics Of Loyalty”, Littlechild demonstrates that most referrals come from a concentrated group of clients she labels “engaged.” Virtually all referrals come from this group, and pretty much everyone in the group provides at least one referral per year. More interesting, and in direct conflict with conventional wisdom, there was little or no relationship between asking for referrals and receiving them.
In her new study, about to be released, she makes another fascinating discovery – the single most common reason clients provide a referral (57%) is because the client saw a friend who had a financial challenge they recognized their advisor could address.
So, how do clients describe what you do? (How do you describe what you do?) Is it memorable and specific? Is it something a client can tie back to a particular need? If not, your client won’t remember to bring you up in conversation when they see a friend who has a need you can address.
Clearly identify what differentiates you, enlist your clients in defining and describing it, and the path to referrals is a lot more direct.
