“You can’t grow your business through referrals,” I told 675 financial advisors as a Keynote Speaker in Phoenix last week.
Here’s what I mean: you can’t predictably double your income through referrals. There is no way to predictably multiply, or leverage, referrals.
Many advisors in the audience shook their head in agreement, because from their experience they know it’s true. Others couldn’t believe I had the guts to say it out loud from the stage, and they also know it’s true.
I’ve been saying it from stage for years. I’ve been showing the advisors I coach why it’s so and what works.
A recent article in Financial Advisor Magazine, Social Risk and Referrals: A Game Changer, verified what I have been saying. They surveyed affluent clients and reported that their willingness to refer their advisor has dropped by almost 90% since 2008. Less than 1 out of 10 clients referred their advisor, because of what the article calls “social risk.”
The article continues, “For affluent clients, the ‘social cost’ increasingly outweighs any upside for making referrals.”
Seth Godin wrote an insightful blog post on the motivations and risks regarding why people don’t refer.
Knowing the reason why is somewhat helpful, but as a business person, knowing that it’s normal and not likely to change going forward is more helpful.
Designing and cranking multiple predictable, profitable Prospect Generators is a much better use of time and money.
First, look back at last year and determine what generated the most Right Fit Clients for you. Then, grab your team and brainstorm on ways to do MORE of what is already working.
I’ll be sharing more ideas in the weeks ahead. Until then, keep wowing your clients and asking for referrals, but let’s create multiple predictable, profitable Prospect Generators.