Referrals are the ultimate catalysts for business growth. They bring in valuable clients while requiring minimal financial investment. In fact, referrals are the most effective means of acquiring new clients. However, many advisors shy away from asking for referrals as they don’t want to upset their clients. Why is it so hard? Few advisors know how to ask for referrals without coming across as being overly aggressive, so they avoid asking all together. Unfortunately, the value of a good referral is usually superior to other sales tactics, so seeking referrals needs to be part of any marketing strategy.

The ability to request a referral should emerge as a natural part of your advisor/client relationship. And there are approaches you can use that feel more comfortable than just asking straight out for a client to refer a friend. Carl Richards says the first step is to identify your ideal clients since you want to replicate those relationships. Then put a twist on the referral approach by asking for the client’s advice. “My firm is looking into further business development. I’ve really enjoyed working with you and want more clients just like you. I’d love to get your advice on how to find them.” By using a more collaborative approach, it takes the sales pressure off of the client and can actually excite them to join with you by providing ideas that will help grow your business.

Referrals don’t materialize spontaneously. The key to communicating about your firm’s growth is often based on timing and your ability to discern whether the client/advisor relationship has developed into a trusted one. When it has, a conversation about how to grow your firm will feel instinctive and comfortable.