The Art of Acquiring Referral Business

Online advertising has introduced dishonesty in a way that couldn’t be accomplished in the past. Even though many advertising campaigns were over the top using superlatives that couldn't possibly be achieved, they don't compare with what is taking place now. Online advertising is cheap, easily utilized to dupe an unsuspecting public. Add to that the barrage of robo-calls filled with scams, and it's easy to see where potential clients are becoming more wary of an approach from a financial advisor.

Usually, where opportunity is lost, a door is opened, and opportunity is gained. A world filled with dishonesty makes it better for honest people to excel. But how will they know that an advisor, agent, registered rep, etc. is honest? By referrals, that's how.

Referrals have always been the best source of new business, but the art of getting referrals has been lost by most producers. We old-timers were taught, through an agency system on how to get referrals. Those old techniques still work, but producers want an easier path to a new client. Everyone knows how to ask for a referral, but seldom execute that simple, annoying task. We don't like to be asked, so we don't like to ask clients. So, let's make it easy for a client to refer, and even easier for a producer to ask.

Client events drive referrals if done correctly. A producer can start the event with just a few clients. My former business partner, Eric and I started client events back in 2004, and he has continued to regularly hold them. Our first event was held at a private club in Jacksonville, Florida. There were about 15 couples in attendance. We were pleasantly surprised when a few of our clients asked if they could bring a friend. We had a wonderful meal together with a beautiful view of the St. John's River from the 24th floor of a downtown building. The clients loved dressing up, which they rarely did. Eric’s events now have as many as 400 people with 25 or more "guests" of clients attending.

There are a couple of key elements to make these events work. For starters, they have to be real events. Nice meals are always a hit. Eric is a member of a centrally located country club and they hold about four events per year there. Once a year they rent an entire dinner theater, usually around Christmas. It all really depends on how large the practice grows. There are a few other pieces to this puzzle to make it worthwhile and get referrals consistently. The space that I have in this article will not allow me to get into further details but you can always call me or write me and I'll fill in those details for you.

My friend and mentor, Judge Ziglar taught me how to simply ask for referrals. It works, but you must work the method to make it work:

  • At the completion of a sale and upon delivery of the policy you should use the following language to attain referrals. Keep in mind to never bother to ask a non-buyer for a referral. It’s a waste of time.
  • Ask the new client if their best friend were to enter the room right now would they introduce their friend. They would say yes. “Well, since it’s not likely that your best friend will walk through that door right now would you mind introducing him/her by long distance? They will likely not object.
  • Ziglar knew that the most excited and proud a client will ever be is when they complete a purchase. When they are most excited is when they are most likely to refer because it’s a great way to share an exciting decision with friends. He had taught this method to numerous industries including insurance agencies. This method also helps the producer make referrals a part of the sales process instead of a restart later on when call reluctance paralyzes most producers.
  • After he secured the prospect’s best friend, he would then ask if the client’s second-best friend walked through that door would he introduce him/her. You can see how this goes. A producer can secure several referrals for a phone call. Judge would also ask for a cell number to contact their friend.
  • Today, we can walk out the door with phone in hand and make that call. Can you imagine how that would go? “ Hi John, this is Kim Magdalein. I just left Bill Harrison’s house and he told me you are his best friend. So, I asked him to introduce us. He gave me your number. You see, we just completed a transaction that he is very excited about and wanted me to share it with you. Do you have a few moments now or is there a better time we can talk?”

The art of acquiring favorable introductions has been adversely affected by cheap underperforming methods that have caused many producers to take the lazy way out. The results are predictable. Anemic referral execution can be eliminated by the persistently motivated producer. Who will step into that role?

Kim MagdaleinKim Magdalein is a Jacksonville, Fla.-based advisor with 30 years of experience who has written extensively about prospecting for a variety of industry publications and websites. He co-founded Seminars For Less nearly 20 years ago, a family business that has served thousands of financial advisors, insurance agents and attorneys as a leader in the seminar marketing space. You can contact him at 800-909-9894 or visit