We have received many questions recently including emails that read, "How do I ask for referrals when the client's portfolio is down? A property and casualty agent asked, "How do I get referrals when my company has hiked premiums twice in the last 6 months?"

Let's explore some proactive strategies for generating referrals in these situations. Times are wonderful when you hit investment home runs or can leverage a competitive price advantage. But waiting until these stars are in alignment to ask for referrals is like limiting yourself to only one play to get a first down or to one time at bat each game. Why handcuff yourself and limit your opportunities? You can create many more opportunities to secure referrals provided you execute the right positioning strategy.

This market has taught us an important lesson; "Don't make promises based on things you can't control." Don't put yourself in a position to be judged only by the performance of individual investments or money managers, the movement in the markets, or the rates your carrier provides. That is a risky proposition for both you and the client.

Focus on that which you can control: your service standards, the quality of your planning, your fact-finding and problem-solving, your ability to address the challenges of certain target markets, the referrals you give, ways you can help their businesses grow, etc.

It may be time to re-ask key questions: "What role do I want to play for my clients?" "What value do I want to provide?" "How do I want to be viewed by current and future clients?"

If you want to be "the stock guy" or the "low cost agent", then you will experience significant volatility and a loss of control in your business. And you'd better pounce quickly when times are good. It will be imperative to be proactive and have a strong system for referrals so you can get many at these peak times.

Another role choice is to be the pilot or trusted advisor who develops the roadmap, provides the compass, and steers clients around pitfalls so they arrive safely at their destination. With this role, you have the huge advantage of utilizing your deep knowledge of the client to help tailor solutions for them - to which they are in full agreement.

From a risk standpoint, you are on much stronger foundation when you are serving your clients in different areas of their financial lives. Client retention research shows that the probability of retaining clients grows dramatically as we assist in more areas of their financial lives. Four-year client retention rates nearly triple when we help clients in 3 areas of their financial lives. (E.g. retirement planning, education planning, estate planning). Help in 3 or more areas and the probability of retaining the client is 90%.

You can NOT instantly anoint yourself the pilot or trusted advisor. You progressively earn that role through helping your client address significant issues in their lives. Your process for addressing a wide range of issues is vital in effectively cross-selling, making the relationship more profitable, and retaining the client. It is also vital in generating a consistent flow of referrals from each and every client you choose. Every time and way you help a client is another golden opportunity for more referrals.

Examples
If you help your client understand and resolve rollover issues as they retire or change jobs, you can easily get referrals to those addressing the same issue. Just follow the Referral Mastery 4-Step Process.

If you provide education through seminars on emerging issues or new solutions made possible by changes in tax regulations, then you can professionally ask for referrals in a way that is not perceived as "too salesy" or self-centered. Just follow the Referral Mastery 4-Step Process.

The downside to this strategy is that there is a limit to the number of people you can service at this level. That's why it is important to operate a strong service system, which delivers high service levels to those you want and helps you manage your time so you can grow your business through quality relationships.

Action Steps:
What do you do if the portfolio is down and you want referrals? (Or your rates are up?)

1. Make sure you have a recovery plan in place that addresses performance (or risk) issues. Then secure confirmation of value.

2. Find additional ways to provide value. Conducting a comprehensive fact-finder in your next meeting might be the first step. Just asking the questions about retirement, education, gifting, estate planning will identify many opportunities for you to help. Be proactive in helping your clients to take appropriate action, even if it doesn't affect your income. Then secure confirmation of value. Seek referrals that are relevant to the needs you just addressed.

3. Look for ways to GIVE referrals. You will model the behavior you want in return. You demonstrate your value goes beyond short-term performance. There are an unlimited number of ways to do this. It's easy to do. And it's FREE.

Short-term performance (of a stock or a premium) should only be one leg of the foundation in your client relationships. Adding more legs will increase client profitability and loyalty. It will also significantly increase both the quality and quantity of referrals. Become indispensable!

Summary

1. Have a written recover plan in place that addresses performance issues within the framework of the client's objectives.

2. Proactively demonstrate and deliver other ways you can help your client beyond this month's return (or the premiums during renewal). Use that as platform for referrals.

3. Proactively give referrals.

See also
You may want to reference the earlier issues of the Referral Mastery Tip by clicking here. In an earlier Referral Mastery Tip and Tele-seminar, we reviewed the importance of understanding your clients' objectives and securing client agreement on the structure and the strategy of the portfolio. We also covered how to use client reviews to address client disappointment and re-affirm the portfolio objectives, structure, and strategy. (Or risk management objectives, strategies, and policies)