Handing over documents for signature, the advisor waits as the client signs each copy, clears his throat and says: “Well…if you believe I’ve done a good job, maybe you would… you know… kinda refer me to colleagues and friends? If you can think of anyone.”

That is not the most effective approach to getting referrals, according to Michael Hepworth, president of Toronto-based Results Exchange Inc. That approach may suggest that the advisor lacks confidence in his or her abilities, or suspects that he or she is not delivering full value, worries that the request might damage the relationship or does not know how to go about prospecting for referrals. For some, asking for referrals raises the tension in the relationship and creates fear of loss of the client’s confidence.

Mr. Hepworth argues that the remedy is to make referral-seeking an integral process in an advisor’s marketing plan. Based on anecdotal evidence and observation, Mr. Hepworth estimates that traditional sales approaches result in effectiveness at between 10-15% close rates while referrals result in about 50% close rates.

The timing of the request is flexible and not restricted to contract signing. It can include telling clients at the beginning of the relationship that seeking referrals is normal practice, during compliments and positive feedback, during follow-up and even after a rejected submission. “The truth is that you can ask for referrals at almost anytime,” he said during a conference on referrals staged by the Results Exchange and Toronto-based Expert Institute in Toronto last spring.

The first step in the process is ensuring that clients know the need for referrals. This becomes a sale within a sale – this one aimed at selling the client about the need to identify prospective new clients. “Tell clients how much you enjoyed doing business with them,” he said, adding that professionals often neglect this subtlety. The advisor avoids confusion by suggesting that the client likely has friends with similar needs and priorities.

The second major step involves narrowing the focus to the most suitable referrals. “Who do you want to be referable to?” Mr. Hepworth asks rhetorically, adding that the answer is synonymous with the advisor’s market niche.

A sweeping question like, “Do you know anybody who could use my services?” forces the client to rummage through his or her mental filing cabinet containing countless names. The referral profile should contain a capsule description of the type of person or company for whom he or she works, industry, age, geographical area and financial priorities such as retirement. “If you’re specific about it, you can actually see them going through their mental filing cabinets,” looking for a match, he said.

The third step involves two words often forgotten in both of Canada’s official languages: thank you/merci beaucoup. The best kind of thank you directly addresses the client’s perspective, both on their own attitudes and their sensitivities. “If people are your friends they will sometimes be offended by you offering them something.”

Possibilities include arranging discounts, charitable donations and free consulting time for the client’s own business or businesses to whom the client wants to appeal.

This means saying, “Why don’t you offer them an hour of my time with your compliments?” (British Columbia and Alberta also allow commission rebating.)

“Meaningful” can mean intensely personal, according to Brian McMillan of Collingwood-based McMillan Insurance and Financial Services. Mr. McMillan paints watercolours and makes prints for use in thank you cards, he explained. They have become the ultimate ‘personal thank you’ since his paintings are personal creations unexpected by clients. “My customers appreciate them and show their friends.”

Al Emid