Q: I’ve always done business on referrals, yet on the phone call you said that is not an effective way to get new business…can you explain?

A: On the surface waiting passively for referrals seems like an ideal marketing model. It’s not. Consider a referral as a gift but not a marketing strategy. An unsolicited referral is out of your control and asking for a referral put the relationship off balance. How? Asking for a referral goes beyond law of reciprocity. Reciprocity is the belief that if I do something for you, I have a right to expect that you’ll do something of equal or greater value for me. The problem is as soon as an adviser asks for a referral, the trusted relationship is thrown out of balance. The person didn’t become a client to become a part of your marketing program – the client has fulfilled his end of the transaction by investing in your service.

 You are supposed to leave your client feeling served, not asked him or her to serve you. Given the state of the economy there is no guarantees that you will see passive referrals again. A lot has changed. The market may remain uncooperative, and even though we realize that is not the adviser’s fault, referrals will slow.

In the future, investors seeking an adviser will probably mean selecting from among multiple referrals, including a local search of qualified advisers in their area the as well as from among advisers who have approached them directly. What can you do? You must go from passive to an active recommendation system by aligning your approach with the way your clients would want their friends to be sold. Make it easy for your clients to give you a referral. Don’t ask, enable. Integrate a referral-enabling system into your regular routine. Implicitly, a recommendation must be earned, which leads to the next point. The client, like every person, would like to be treated as if he were the most important person in the world. In a recent meeting with one of my advisers, I felt some pressure to give him some names. You know, that old "who do you know that can help me" routine. It made me feel a bit used and very uncomfortable. I had the sense that the whole purpose of the conversation was to help him on his road to success, that he was the important one. This interaction was a distinctly unpleasant experience for me. Most people refer down afraid of the risk that you lose them money. Your clients may perceive a risk in referring you to important people in their lives. They are afraid that their referral is going to come back to haunt them or that something beyond their control won’t work out and will negatively affect their relationship.

When you’re the expert and your clients refer you, their own status goes up. They benefit from the association with you the same way one benefits from being a member of an elite group, or knowing someone famous.Your best referrals are not given to you; they are given to another person on your behalf. Here is how it usually happens: People are in a social situation and an issue or problem comes up. Your client says, "You need to talk to my adviser. He can help you." That is the best way to get a recommendation. When that person calls you, you really have the sale well in hand.

Some advisers find a way to bring up referrals with every client contact; others may wing it. You want to have a process in place so when referral opportunities happen you are ready. Respond to referrals quickly professionalism is a trait everyone appreciates. Treat all referrals professionally and they may ultimately become yet another referral source!

Respond quickly to anyone who contacts you as a result of a referral. Keeping this a top priority on your “to do” list keeps the referral calls coming and ultimately saves you time. Even if you know the person contacted you because they were trying to gain your business, respond quickly. Send reprints and invitations to your seminars. Don’t forget to work in your positioning statement.

Give referrals don’t ask for themFind out how one client could benefit from another’s product or service. When someone thanks you, that is the best time to seek a recommendation. Here is what you might say: "Thank you. I enjoy working with people like you, and I would be grateful if you would recommend me to others." No pressure, no hassle, just an affirmation of the client, a word of thanks and an expression of gratitude. That's how you develop a great recommendation script.Clients don’t wake up thinking, Boy, I think I’m going to refer my financial adviser today, or I bet old Jim could use a good CPA.

The following eight concrete action steps will improve the odds of getting a referral from every client:

One - Plant the seed. Send out a confirmation letter before client meetings in which you mention that your firm is accepting new clients.

Two- Suggest that if your client knows anyone who might benefit, he/she can let you know at the meeting. Use newsletters or client letters to inform your mailing list that you are currently accepting new clients. This is even more effective if you can link it to a new partner joining the firm or the addition of staff.You may decide to ask for recommendations at your semi-annual or annual client meetings; you may mention recommendations in every client letter; or you may distribute a designated number of special mailings per year related to referrals.

Three - Allow them to control the initial contact A person may be unwilling to name names, but would be perfectly comfortable recommending you to others. If this seems to be the case, encourage them by providing a brochure or letter detailing your capabilities that they can pass on to potential clients. Provide a reply card that referrals can return to your office.

Four - Return Favors.When people do favors for you, they do not necessarily expect that you will return them; however, people appreciate it when you do! Two good things typically happen as a result of a returned favor: people want to do more favors for you, and they are more likely to refer you when the opportunity presents itself.

Five - Reward desired behaviors When your clients provide a referral, reinforce the behavior by sending a handwritten thank-you note or even a small token of gratitude. Showing your appreciation promotes continued referrals.

Six - Send a copy of your book and include an extra copy with a note suggesting they pass it along to a friend. Give them an easy way to responds “Call me if you know anyone” is not likely to generate a referral, so consider giving clients a postcard to return on which they list the names of potential clients. Follow-up phone calls or letters can also be productive. Raise their comfort level. Some people are deterred from referring others by concern that your actions might mar their relationship with those that they refer. Be clear about your intentions by explaining that you plan to contact the prospect by phone or mail in a non-invasive manner.Step Seven - Timing your referral requests is important. After reviewing favorable portfolio results, consider a statement such as, “We’ve done well this quarter. I hope you are pleased. Would you know anyone who might be interested in the quality of investment advice I’ve provided to you?” Present a referral request as an opportunity for clients to do a favor for someone. “Do you know anyone who might benefit from my service. It would mean a lot to have a positive recommendation from you?” and don’t forget to say – Thank you.

Eight - Make sure the prospects can find your sitePathways that lead backHow can prospects find your web site when they need information about your company, locate useful information within your site, and feel encouraged to contact you? If possible, a Web site name should be the company or organization's name (or appropriate abbreviation or acronym) followed by .com, .org, or .firm. Most people will try that before utilizing search engines. Make sure your meta tags (hidden HTML code that provides information for search engines) include critical key words related to your organization, and ensure that your home page title includes both your company name and major business category. For example, the page title for XYZ Company, which an HR software vendor would access, might read: "XYZ Company delivers HR software solutions to businesses worldwide." Include your Web site address on everything -- business cards, product literature, press releases, e-mail signatures, etc.

1. Keep it brief, especially on the home page. The home page should be simple, composed of a brief explanation of the organization and a telephone number with clearly labeled section headings such as: About the Company, History, Products and Services, Contact Information, Press Information, Staff Biographies and Site Map. These will provide a sufficient starting point for Web site patrons.

2. Include an "Your Company In the News" section with published media clips about your company, either scanned as images or keyed in as text. Providing published news about your company from third-party sources.

3. Revise and refresh. Post news releases and update corporate/product information regularly.

4. Organize site information based on the needs of your visitors. Prospects will return to your site if they find information quickly and easily. Provide a link directly from the home page to a page titled "New Client Information," which will in turn lead to appropriate send out package, press releases, success stories, and a calendar of the organization's upcoming events.

5. Serve as an information resource, providing valuable background that potential clients may need beyond basic information about your company. Offer value-add content beyond marketing rhetoric.

6. Enable interaction. When appropriate, include a demonstration. Perhaps a video clip of a client talking about the results they have achieved with your service, or a "request an interview/request a product to review" form.

7. Include key questions on the form such as the outlet, topic of discussion and questions, familiarity with the company, and if the media have a specific individual with whom they would like to speak.

8. Include biographies of staff members to further enhance their credibility. Include a guest book. Invite prospects to register online. Keep the request form brief to encourage prospects to take the time to reply: Include fields for name, outlet, phone, fax and e-mail. Ultimately, prospects need to obtain accurate information quickly. The home page should provide quick, easy reference points to efficiently lead the information they need.