5 Reasons You Don’t Get More Referrals

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Let’s be honest before I share with you the five reasons you’re not earning referrals. Of course, I don’t know for sure whether the following explanations apply to you. After all, I’m not there! Really, how would I even know? I’m not looking over your shoulder when you’re on the phone. Nor am I attending the same events as you do. Nor am I speaking with your clients, centers of influence, and other colleagues. Perhaps more importantly, I don’t know when you’re not on the phone or talking with your clients.

But, I’ll tell you what I do know!

If you’re a financial advisor, rep, broker, agent, or planner, and you’re not generating a referral-based business, you will fail. Simple as that! Of course, there are exceptions, but not many.

So, what gets in the way of gaining more referrals. Or any referrals?

It’s the pressure, man! The pressure of writing more cases, dropping more tickets, getting more accounts, selling more products, accumulating more assets, and being in front of more people.

With all the pressure to hit your numbers and generate commission, it’s easy to lose sight of what’s important. And what is important? Well, if I had to guess, I would say relationships. Yes, that’s it – relationships! However, you already knew that, right?

Well, here’s the thing. It’s easy to forget about the importance of relationships when you’re simply looking to hit your numbers, and unless you focus on relationships, it makes it very difficult to make a sale, grow your book of business, and ultimately help people. Isn’t that what it’s all about?

Here are five obstacles that may be preventing you from doing all of the above:

1. You Don’t Have the Right Perspective about Referrals.

It’s maybe just semantics, but a referral is whatever you want it to be. If you want a referral to simply be the name of someone to cold call, then so be it. If that’s your expectation, then that’s what ye shall receive. If you’re looking to build your client base, then you may want to reconsider your approach to referrals.

For example, many years ago I attended weekly meetings at a networking group. This group allowed only one of each type of profession as a member – one financial advisor, one residential Realtor, and so on. In this group, the Realtor would request FSBO (For Sale by Owner) contacts as “referrals.” The FSBOs weren’t necessarily in the market for a Realtor, but this was the request and therefore the result. The Realtor was able to connect with FSBOs, but he didn’t close business. As a financial advisor, if you’re in the market for anyone, everyone, someone who doesn’t already have an advisor, that’s what you’ll get. Then, you’ll have to work really hard to “sell them.” I hope that’s not what your life is like now!

So what’s my definition of a referral? A specific individual who is already in the market for what I’m offering. Again, ask and ye shall receive. Hey, but that’s me. More importantly – how many business opportunities are you losing due to your own expectations? How much time are you wasting looking for the next FSBO?

2. You Aren’t Specific Enough about Your Target Market.

Have you identified your target market? A target market should represent who you serve best and therefore wish to serve most. It’s where you do your best work. The more specific you are about describing your target marketplace, the more opportunities you will create.

It’s important to point out that small businesses, high-net-worth individuals, the affluent marketplace, pre-retirees, families, and “all those who need my services” are not good examples of target markets. Each of the segments I described is much too broad and therefore represents bad marketing. Pick one or two markets (no more!) and try to be very specific. For example, what type of “small businesses” do you want to approach? Ask yourself what industry, profession, market segment, niche, geographic area, or demographic you’d like to work with and serve. As soon as you get down the specifics, it’s much easier to figure out (from a networking mindset) where you might go, what you might say, and with whom you might want to meet. It makes your marketing so much easier! That is, if you’re into that sort of thing.

3. You Don’t Have a Networking Mindset.

A networking mindset is all about looking to establish better relationships with those whom you know and like, as well as those you meet. Networking is creating a “WE” dynamic with the people you interact with most. How can WE help one another? How can WE refer business to each other? Rinse and repeat! And if you’re a true networker, you’re always looking to meet new people and add to your surroundings.

To get better at networking, consider who your target market might be. If you’re not sure, see number two. Once you have that figured out, think about the professions that come in contact with your target market, or even better, sell to your target market. Where do you need to go to meet these folks? Maybe it’s time to have a WE conversation!

4. You Don’t Have a Strong Call to Action.

If you can be specific about the type of business you want, you have a compelling call to action. If you don’t, you may have challenges getting more and better referrals. Again, if you’re into that sort of thing. Without having a defined target market, it may be difficult to forge a strong call to action that resonates with your audience.

Because my target market is the financial services industry (wire houses, broker-dealers, insurance carriers, mutual fund/annuity companies, independent marketing organizations, banks, etc.), it makes it easy for me to present a call to action.

“I’m always looking to meet or be introduced to managers for companies like _______. Any advice on how to make these types of connections would be very helpful to me!”

Remember, don’t forget about the WE dynamic when creating your call to action. If you help others with their call to action, they’ll help you right back. That’s how it works!

5. You Don’t Have a Good “Connection.”

I’m not quite sure if it’s a good thing or bad thing, but not everyone you meet will like you, trust you, respect you, or support you. This is a harsh reality, but it’s true. Accept it and move on! Focus on those who share your values, who can relate to most of your opinions, and who can understand your vision. Most importantly, focus on people who you truly like. You don’t have to root for the same sports teams, but you get the idea. If you feel a connection with them, it’s very likely they will feel the same about you. If not, don’t waste your time trying to force it.

Establishing likeability and common ground (chemistry) is the first phase in making a true connection. Without chemistry, nothing else matters.

So now what?

Here’s a call to action!

Contact your top referral sources and work to build your relationships with them. Focus on how you can help them and work to be more specific when you communicate with them. Then remember to clearly identify the clients you want to work with.

Now that I’ve shared the tools, it’s your turn to take action. So, what do you think happens next?

Michael Goldberg has helped thousands of sales producers generate hundreds of thousands of dollars of referral-based business. His firm Knock Out Networking is focused on increasing the production, recruiting, and retention levels of firms in the financial services industry. Michael is the author of Knock-Out Networking and speaks at conferences, runs sales meetings, and delivers hard, actionable ideas that can be applied immediately. He is a two-time TEDx speaker and has spoken at numerous industry events including the Million Dollar Round Table (MDRT). Michael is currently an award-winning adjunct professor at Rutgers University and frequently volunteers as a speaker at organizations focused on career search.

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