Everyone loves getting referrals.
It’s much less expensive to acquire new clients/customers through referrals than traditional marketing methods. Additionally, new clients who have been referred by a family member, colleague or friend have a stronger level of loyalty, making them a far more profitable client over the lifetime of the relationship.
Why? For a couple of reasons;
- There are usually similarities between the client who’s advocating your services and the new client who is acquired as a result. They often have similar social interests, which is a trust enhancer, and that trust is naturally transferred to you—if you invest the time and energy to connect with this referred prospect socially on an emotional level.
- Clients who are referred are more likely to refer. Your mission is to transform your newly acquired client into an advocate who will begin to activate the power of word-of-mouth-influence on your behalf in their network.
So, how do you turn the social capital you’re building with affluent clients into wealth? Very carefully and thoughtfully, which we refer to as strategic intent.
Our research has shown that every affluent client has a network, which we refer to as seven spheres of influence, that is capable of referring six qualified people to their financial advisors. Essentially, this is a social capital wealth cycle that has six components:
- Emotionally connect with top 25 clients. Socialize with them strategically to ensure you’ve established an emotional connection. Always remember that once established, you have an ideal client who will serve as an advocate for you.
- Use the seven-spheres-of-influence model. Source names of potential prospects who are connected to each of your top clients. Armed with the knowledge that every affluent client should be responsible for six new clients from their network during the lifetime of your relationship, your mission is to carefully uncover names of people in each sphere, discover as much as you can about them (easily done by simply bringing them up in conversation with your client) and assess who meets your criteria as a qualified prospect.
- Get personally introduced in a social context. Now that you’ve sourced what you believe to be qualified prospects, meeting these in a social setting makes transitioning them from a prospect into a client much easier. It’s here that your goal is to connect with them on a personal level, building on the trust they have in your client—and the trust your client has in you. Little, if any, business should be discussed at this stage— you’re simply developing rapport built on trust.
- Develop an emotional connection with each prospect. This can occur in the third component, if not, further social interaction will be necessary. At first glance, this might seem unnecessary and a waste of time, but it’s just the opposite. Once the emotional connection is established continuing on to component No. 5, transitioning from prospect to client, is seamless.
- Expand into a business relationship; prospect becomes client. As you’ve earned the right for an official business meeting, your prospect, soon to become a client, has already decided to work with you. But you still must ask.
- New client activates word-of-mouth-influence in their spheres of influence. Because you’ve already established an emotional connection, your newly referred client is quickly becoming an ideal client. Showcase your professionalism and simultaneously begin sourcing names from their seven spheres of influence.
When thinking of each top client being responsible for six new referrals, you suddenly have clarity regarding your future growth. Fully activate this cycle and the social capital you’re building with clients and referred prospects will follow.
Matt Oechsli is author of How to Build a 21st Century Financial Practice: Attracting, Servicing and Retaining Affluent Clients. www.oechsli.com