So, I’ll admit it… I’m an Advice nerd, and one of my obsessions over the last 24 years has been figuring out the true mechanics of client referrals.
Despite what popular folk lore suggests, asking for referrals is almost universally NOT something that the most referred Advisers actually do.
Having surveyed thousands of Advisers and their Clients and then extrapolating the data into hundreds of Adviser coaching scenarios, we have been able to create an algorithm that accurately predicts an Adviser’s organic client referral rate.
Better still, that process also pinpoints exactly how to best raise an Advisers organic client referal rate and identifies what actions will result in specific real world growth numbers.
Over the coming months we will be delving into more of the detail so that you can start to take control of your MOST important growth multiplier.
Across hundreds of data points we break down referability enhancement into two main categories.
1) Referability Amplifiers
- Being Found
- Being Known
- Telling Your Stories
- Telling Your Client Stories
Each of these encompass many action items that span things such as: most effective networking, optimal website format to digital presence and personal branding. With how you tell your ‘stories’ being one of the strongest amplifiers.
1) Referability Multipliers:
- Pricing Pressure
- Relationship Status
- Contextual Sequencing
- Engagement Language
By deeply analysing each individual Adviser we are able to assess the multiplicative impact of their overall Client Engagement Score and make specific changes at the Individual Adviser level.
These changes result in radical improvements not just to their client satisfaction, engagement, and referral rate, but also in most cases at least double the per client profitability within 12 – 18 months of focused coaching.
Through nearly a decade of focused, real world application, we have been able to observe how the interaction of each of these key elements influences the client value perception and their willingness to make referrals.
Just as relevant is the Advisers physical and digital presence, which determines the rate at which referrals actually take action and seek to engage.
In the above example, the Adviser has, over 9 months improved their organic referral rate from <2% to a current position status of 3-5% and our algorithm predicts that within 12 months they will increase that rate to 15-20%.
Organic Client Referral Rate: For every 100 active clients, how many new client engagements occur over 12 months as a direct result of referrals from those clients.
Additionally, over the last 9 months the Adviser in this example has achieved the following in their own words.
Of the clients I’ve spoken to, our fees have gone from $138k to 240k – so $100K increase in fees so far. Some small increases some much larger – avg 76%.
Interestingly, one of the key reasons that Advisers don’t generally receive enough referrals is the relationship between value perception and price tension.
Almost every Adviser we have interviewed in one way shape or form is seeking to diminish the price tension their client’s experience.
Yet this is also directly diminishing the value perception of their clients.
The simple truth is that if you are not creating what we call price tension in your client engagements, your clients value you less and they MOST DEFINITELY refer you less.
So the question is: are you creating enough price tension and are you charging your clients enough so that they will actually refer you?