Here’s a provocative thought—it’s been said that every client has the network to introduce you to six similar profile people. In addition, our research over the past 10 years has also shown that the “personal introduction” ranks as the No. 1 way today’s affluent first met their financial advisor. The question becomes, has each of your top clients introduced you to six people? Probably not, but that’s fixable.
Word of mouth is not only a great way to find more clients, it’s a way to find better clients. It’s powerful in the way that it leverages trust, and it’s cheap in the way that it doesn’t require traditional marketing. It also attracts loyal clients, since they’re connected to fans of yours.
A Harvard Business Review article from September 2018 titled “How Customer Referral Programs Turn Social Capital into Economic Capital” cited a study that included 1,800 new customers of a German bank, the existing customers who referred them and 3,663 that became customers through other means. Both the referred and referee were more profitable, a better match for the bank’s services and considerably more loyal to the bank. However, the study did show that “referred customers were 40% more likely to leave the bank if the person who referred them left, suggesting that social ties play a role in retention.”
Now let’s get back to the fact that client-advocates are capable of delivering six similar profile clients to you over the lifetime of their professional relationship. This is the aforementioned “Factor of Six.”
Taking action on this principle starts by viewing each of your top 25 clients through the “Factor of Six” lens. Who do they know that you’d like to have as a client? Let’s commit pen to paper and see how many you can come up with.
If you need some inspiration to uncover these names, think about your clients’ multiple spheres; family members, neighbors, colleagues, friends, organizations, recreational activities, and professionals they use. Be inquisitive in conversation. Do some digging online. In today’s environment, it’s not that hard to piece together someone’s network. The irony here is that this key marketing activity is relatively simple but few financial advisors do it with any consistency.
If you do actually identify six potentials per client, you’d end up with a list of 150 people. That’s a big list, but doable with enough persistence. Identification is a critical first step in the process.
The next step is equally straightforward: getting personally introduced by your ideal client to the person you uncovered. You’re not asking for a referral rather you’re asking to be introduced to specific person who your client knows well.
This “Factor of Six” is a virtual goldmine waiting to be mined by financial advisors. In effect, you should consider this a marketing campaign. It’s been our experience in coaching this financial advisor marketing process that at the end of 12 months, you won’t land 150 clients, but you’ll be a lot closer to that figure than when you started.
Matt Oechsli is author of Building a Successful 21st Century Financial Practice: Attracting, Servicing & Retaining Affluent Clients. www.oechsli.com