Increase Profitability

Three Steps to Generating More Referrals

Three Steps to Generating More Referrals

Most financial professionals are more comfortable delivering services than promoting them. At the end of the day, demand generation — your ability to generate interest, inquiries, new leads and proposals — is a good thing for your practice and your reputation.

“The ability to generate demand is the ticket to spending more of your time working on exciting things for interesting people versus tolerable stuff for acceptable clients.” —David Maister, True Professional (Free Press, 1997)

Consider the following steps to securing your current client base and generating referrals and demand from an attractive set of new clients.

Step 1: Define your Target Market

The first step to generating more business is to define your ideal client. Think about the 20 percent of your clients who provide 80 percent of your revenue, and try to define your market in these terms:

  • What do your best clients value in you?
  • What problems do you solve for them?
  • Are you skilled at serving a specific type or segment of client?

Write down descriptions of your top “segments” of clients. List their needs to remind yourself of your strengths in the marketplace. Write down their “pain points” — the issues that concern them or cause them to worry their financial plans. Addressing and mitigating pain points is an effective way to think about how you engage clients with relevant information. Spend time thinking about your approach versus other advisors.

Step 2: Create Relevant Opportunities for Client Engagement

Engaging clients is important because trust has to be demonstrated, not sold. Interactions with clients are your best opportunity to demonstrate yourself as a trusted advisor.

  • Identify and track lifestyle event triggers for your clients. Business owners cross many thresholds in building their personal and business lives — rapid business growth, hiring staff, setting up a partnership, buying a house or having children. These event triggers are engagement opportunities for education and assistance from decision-making to paperwork.
  • Create a routine for “you should know” contacts. Use the client’s preference (phone, e-mail or mail) to reach out with a relevant piece of information — an accounting insight or an opinion on a current issue or pain point.
  • Activate technology to easily schedule and customize engagement. E-newsletters and blogs can be effective tools for touching base and adding value. E-mail makes it easy to forward articles or information with a personal note.
  • Create a client calendar. The key to engaging and targeting your market is talking to clients. A good way to do that is to create a client calendar that outlines and plans potential client contact throughout the year — particularly during the gaps between tax filings.

Three Steps to Generating More Referrals

Step 3: Implement a Plan for Demand Generation and Prospecting

Now that you know your target audience and have focused on their needs, you can create a plan for how you reach your most valuable prospects.

  • Leverage your greatest asset — customer word of mouth. Word of mouth is the No. 1 way to generate new business leads. Customer satisfaction surveys with a thank you gift can be a very effective way to collect feedback and professionally encourage referrals.
  • Lead and inquiry management. Encourage, track and follow-up on all leads and inquiries. According to David Maister, the author of The Trusted Advisor, “Every lead is an opportunity to demonstrate trust, build your brand or get a referral — based on the speed, quality and nature of your response.”
  • Create cultivation events. Partner with other professionals who serve business owners — lawyers, bankers or insurers — to create events that educate and inform.
  • Activate technology. Use online search terms to direct prospective clients to your Web site. Encourage prospects to follow your email newsletters or your blog. Educate yourself on search engine optimization (SEO) and adwords to promote your practice on your Web site.

Ultimately, effective client engagement means that you hear, anticipate, understand and address client needs with genuine, honest action. A smart referral strategy that demonstrates those characteristics will pay off with client prospects that fit your strengths in the marketplace.

This content does not constitute legal, tax, accounting, financial or investment advice. You are encouraged to consult with competent legal, tax, accounting, financial or investment professionals based on your specific circumstances. We do not make any warranties as to accuracy or completeness of this information, do not endorse any third-party companies, products, or services described here, and take no liability for your use of this information.