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When you hear or see the word “threat,” it triggers you in some way. Associating that word with referrals will evoke a terrifying shiver. This is, of course, assuming you’re interested in wanting to acquire more referrals.
A referral threat is typically an external, negative factor that could hurt your overall referral success. It’s one piece of my new Referral SWOT Analysis™ that includes referral strengths, weaknesses, opportunities and threats. In some instances, the threat can be internal. Determining your referral threats early enough often gives you the opportunity to minimize or eliminate them, plan for them and take action.
As a referral and business coach who works exclusively with financial advisors, I’ve seen referral threats erode the revenues of firms. Many firms are not even aware of the threats as they hide behind a veil of satisfied clients waiting to be exposed. There are those firms who know a threat exists, yet don’t have a clue how to address it or make it go away. Threats attack your bottom line, stagnate your growth, limit your reach and effectiveness and weaken your position compared to your competitors.
Let’s look at the two most common threats.
1. One rainmaker
One of the most common referral threats I’ve seen is that a firm relies too heavily on one referral rainmaker. There’s one guy (and yes, it’s typically a male advisor) who seems to be really good at bringing in all the business. He’s the one who has developed the relationships over the years. He’s the go-to person that people call when they refer to the firm. Then, as the business comes in, he feeds it to the other advisors in the firm.
The problem is obvious. What happens to the firm if this one person didn’t show up tomorrow because he had a heart attack and died? (I know a firm where that almost happened, and it scared the crap out of them.) What happens if he decides to leave and go out on his own? Who will replace him?
Typically, in this situation the younger advisors have become so accustomed to being fed that they don’t know how to hunt. They have not developed any relationships and haven’t a clue where to begin. They don’t know how to ask for referrals because they’ve never viewed themselves as salespeople. The learning curve is huge and the potential impact on the firm could be devastating.
2. Beliefs and attitudes
Another common referral threat is resistance, beliefs or attitudes that block creativity and the ability to acquire more referrals. I can’t tell you how many times I’ve heard my clients talk about the obstacles they face with trying new strategies, tactics or approaches to gain referrals. It could be anything from pursuing a niche, joining a networking group, attending events, using a new approach for asking for client referrals, writing and promoting a book, creating a podcast, offering webinars, developing creative COIs, etc. They were met with stink eye or no support for their referral-development efforts.
These deeply rooted beliefs and attitudes often come from the more seasoned advisors in a firm around how things should be done when it comes to referrals. Hearing statements like, “We’ve always done it this way,” “That can’t be done,” “That simply won’t work,” or, “We don’t do that here” are sure-fire ways to minimize creativity and silence the next generation of business builders.
Some advisors are faced with resistance when they try to hire a coach or attend a conference to enhance their referral skills and abilities because they think the advisor should be able to figure it out on their own or should seek advice from someone in the firm.
Beliefs, attitudes and overall resistance can be hard to overcome for a firm. I’ve seen a firm know it had this issue and make the conscious decision to bury it until that certain someone retires. In the meantime, they will lose years of creative referral development to their competition down the street. Many next-generation advisors want to try new ways to develop referrals and should be encouraged to do so. Many female advisors struggle with fitting themselves into a man’s way of asking for referrals because it doesn’t fit their style or approach. They need the freedom to explore and create their own way of building business that is in alignment with their authenticity.
Pay attention to what’s happening inside and outside of your firm walls that could be threatening your referral success. Remember, these are only two of the possible referral threats that can lurk around in your firm. Pay attention to what’s being said and how people are feeling. Notice all that is within your control or that you can influence. Look at where your referrals are coming from and design a plan for diversifying your referral sources. You should be good at diversification, so apply that knowledge to your firm’s referral process.
Michelle R. Donovan is a referral/business coach, speaker and partner of Productivity Uncorked LLC, a coaching firm that specializes in helping financial advisors increase their referrals and get more done in their day. Michelle has written a Wall Street Journal Best Selling book, The 29% Solution (published in seven languages) and an Amazon Best Selling book, A Woman’s Way: Empowering Female Financial Advisors to Authentically Lead and Flourish in a Man’s World. Check out the Referral SWOT Analysis, email Michelle at [email protected] or connect with her on LinkedIn.
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Advisor Perspectives welcomes guest contributions. The views presented here do not necessarily represent those of Advisor Perspectives.
