How to Implement a Formal Referral Program

We’re already four months into 2019. Are you on track to hit your new client goals for the first part of the year? If your answer is no, you’re not alone. The good news is you still have time to get on track and hit your growth objectives.

One way to acquire new clients is through referrals. In our previous post, we discussed the two different types of referrals that you can use to grow your practice.

Now, we’ll discuss the second type of referrals: those that come from an intentional referral strategy.

Here, you’re directly asking for assistance from your clients. Many financial professionals don’t ask for referrals because it feels unnatural and awkward. Fortunately, there are steps you can take to make the process more comfortable.

Below are some tips and guidelines for developing your referral strategy. If you don’t have a formal referral strategy in place, now is the time to develop one.


Program Goals


Good plans start with an endgame. What do you want to accomplish with your referral strategy? How do you want the strategy to affect your business over the next several years?

You may want to start this process by looking at your book of business and breaking your clients into segments based on the revenue they generate and the level of service they require. Which clients represent the top segment? Which clients would you duplicate if possible? Triple A clients typically are clients that have good assets, good attitudes and who are good advocates for your business.

These are the clients you want to target as part of your referral strategy. Consider a realistic number of referrals to expect from each client each year. Also, keep in mind that only a fraction of the referrals will convert to new clients.

Set referral targets for the next few years. You could look out five years and set long-term targets for the program. How many clients could you add? Try to estimate. What level of assets or revenue would you like to be at in one, three, or five years? Write down your goals and objectives and use those numbers to guide your event planning and referral strategy.


The Program


The old way to be proactive about referrals was to simply ask your clients for them at the end of every meeting. It can be an uncomfortable conversation. There are few financial professionals who can consistently pull that off in a way that isn’t awkward.

Fortunately, there’s a better way that makes the client feel valued and makes the conversation more natural. It’s through a referral system. Think of it as a rewards program at a high-end restaurant or hotel. You offer high-end, experiences to your best clients and encourage them to bring friends or associates who may find value in what you do.

One way to do this is to present the rewards program as an exclusive offering separate from your traditional services. For instance, you could give it a specific name like the Ambassador Club. Make your top-segmented clients feel like they are being invited into something that isn’t offered to all clients.

The events should align with your clients’ expectations and support the idea that the program is exclusive. Think of events and activities that most people wouldn’t turn down. Your clients should look forward to these events, not feel as if they’re chores.For instance, you could book a boat on a nearby body of water for an evening cruise and wine tasting. You could book an event at an exclusive golf course or a party at a high-end hotel or ballroom.

You might want multiple tiers of events. For instance, anyone who refers one person for a meeting may get access to the entry level events. Those who refer three or more people who come in for meetings may qualify for a higher tier or more exclusive events.

The key is to make it well known that these events are happening and that clients are qualifying for them. Put pictures of the events in your newsletter. Recognize the clients who reach each tier. You want the clients who aren’t participating to see what they’re missing and feel a sense of urgency to get involved.


Sample Event Schedule


How do you fill your calendar with the appropriate level of referral events? Below is a sample schedule to consider;

  • Quarterly – “Bring-a-friend” Events in which you invite current clients to bring friends for a warm, low-pressure introduction. If any of those friends end up scheduling meetings, it helps your clients qualify for the special events club.
  • Quarterly – Reward events for your referral club members. You may want to break them up into small groups so you can get more interaction with attendees. These events could feature things like a wine tasting or perhaps a behind-the-scenes tour and tasting at a brewery.
  • Semi-annual – Client appreciation events in which you show gratitude towards your clients and recognize those who have referred friends and associates throughout the year. You also can use this opportunity to explain the referral program and present some of the features and events offered to referral club members.
  • Annual – Large, high-end reward events for your referral club members. This is an event where you want to exceed expectations. Make it memorable. Be creative. For instance, you could hire a popular band to play music and rent out space at one of the area’s nicest event spaces or hotels.


The Referral Kit


Events are a great way to meet your clients’ friends, but they’re not the only tool you can use as part of your referral strategy. A referral kit is another effective tool that allows you to bring up the referral conversation without putting your client on the spot to provide a name.

A referral kit includes information about your practice along with some branded promotional materials. For instance, your referral kit should include a two-pocket folder with your company brochure, team sheet, and whitepaper inside. As well as, branded swag (i.e. magnet) and a referral card depending on your location.

During meetings with clients you can ask them to pass on the kit to anyone who might be interested in your services. They may offer a name of someone they have in mind or they could simply keep it in case the conversation comes up. You could also be proactive and ask if they can think of anyone who could benefit from your services. The referral kit is a great way to open up the conversation and remind your clients that you appreciate their assistance.

Referrals don’t come easily, but they’re too important and valuable to ignore. Start by identifying the clients you want to duplicate and then plan some events in which they could bring like-minded friends and contacts. If you land only a handful of new high-revenue clients, the strategy pays for itself.


Ready to develop your referral kit? Contact us today at 800.922.2642.

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