This is the introduction to my new eBook, "Death By Referrals"
The Evolution Of Running An Advisory Practice.
This eBook will outline why most advisors are set up for "Death by Referrals." There are two extremes to the death by referral issue. The problem can be either getting too many non-producing referrals and spending too much money attracting them, or not getting enough referrals at all - especially the ideal kind.
The second thing this paper positions is how to embrace a new referral mindset: the pursuit of referral happiness. Think about the movie "The Pursuit of Happiness" with Will Smith and how much work and dedication it took to him to find that happiness. It's the same thing that you're going to have to do to pursue “referral happiness” for yourself.
Next, the paper will discuss the fundamentals of good referral marketing. What it takes to turn the referral tap on and get the best leads.
Lastly, we’ll talk about what it takes to build referral momentum. How do you build your referral marketing so that you can continue to increase the amount of referrals and the quality of those referrals? Referral momentum is about sustainability and repeatability rather than a “program” you wind up and wind down all the time.
First, let’s set the landscape a bit by looking at things that have changed as well as some constants. In the financial advisory business, things are changing at an alarming rate. The only constant is that referrals are still the best way to grow your business.
Here’s What Has Changed (Or is Changing)
1. How we communicate
As a society, digital media now dictates how we communicate. We communicate through photos and short texts, posts, podcasts or tweets more often than we do through human voice-to-voice or face-to-face.
Telephone: We don't make phone calls, we email or post something with an attachment. It’s just easier, faster and more effective.
Podcasts: Syndicated recorded messages are quickly becoming the “Must Do” and “How to” for reaching the more affluent and educated market. They are a great way for people to learn about you.
Videos: With the simplicity and cost effectiveness of creating videos, more and more advisors are using them to communicate with the world and their audience.
2. It takes longer these days to build trust and it happens much differently
The days of "let's meet for a coffee" or "come into my office and let's talk" are almost a thing of the past. They still happen but they don't happen as quickly in the sales process as advisors would like.
What happens now is that advisors get asked what their web address is or how to connect with them on social media or if they have their own blog. Things like that. It's a much different process of building trust and it all depends on how we communicate and how people expect to be communicated with. Some of that is because we're so busy. Some of it is because prospects have access to check you out first.
3. The amount of work it takes to manage your practice
Things like compliance, financial products, and financial legislation take increasingly more work and time for advisors to pursue.
4. It also takes a lot more work to earn and maintain a financial advisor license
The requirements are more and more stringent. The continuing education and the knowledge that you need to know keep getting more and more complex.
5. There are lower profit margins
That has definitely changed. It’s more difficult to be profitable. There is also a need to be transparent with all the information out there. Advisors are under much more scrutiny by investors and they need to be able to tell clients their affiliations with products or other financial companies, how they get paid, and what their advice is based on.
6. Another thing that has changed is the business model .
A lot of advisors are considering moving from commission bases to fee based - if they haven't already done so.
Here's What Hasn't Changed.
1. Business owner mentality and ambition .
As business owners, advisors still want to control their schedule, the amount of money they can make, who they work with, how they work, and what type of business they run.
2. Income potential .
Although profit margins are less, there's still an incredible opportunity for income earning in this profession.
3. Helping investors .
There's still an opportunity to provide sound financial advice and direction for clients, helping them pursue financial security. There are actually improvements here that allow advisors to minimize client anxiety and create more comfort.
One of the most important things that hasn't changed is that referrals remain the lifeblood of your practice. You cannot be successful in this business if you don't get a lot of referrals. If you don't have a process and a mindset around generating referrals it will spell trouble. Although the methodology behind getting referrals has evolved significantly the fact still remains that referrals are the best way to grow and sustain a vibrant practice.
Unfortunately, many advisors still think that a polished script or a referral program built around asking for referrals will turn it all around. That isn’t the problem with getting referrals. You don’t need to ask more or have the right script.