Warm referrals can be expensive – very

My head was spinning.

I couldn’t decipher Mark’s enthusiasm.

He was raving about one of his clients.

“She called me the other day. Wanted another box of business cards. She keeps handing them out.”

Tell me about her.

“Well Maeve is a 74-year-old widow living in a retirement village in Kempsey…”

-  At 74 there is only so much Mark can do to help. Centrelink entitlements are locked and loaded, and her super funds will be dwindling.

-  And Kempsey is a small regional town in NSW, with an average income less than half the state average.

“So, you want more mid-70s retirees living in a small country town with limited money?”

Mark still didn’t quite get my point.

That’s the addictive high of a warm referral. The dopamine hit to the brain of:

-  My clients love me

-  They’re telling others about me

-  I must be doing a great job

-  New clients are coming to me – I can just coast!

At that moment the subtle ego boost has taken hold. And the industry mantra continues.

“I get all my clients through warm referrals.”

Yet most financial advisers ignore the numbers.

Nearly every time I sit down with a financial planning business, and we look at their conversion of enquiry into fee-paying clients, it is low.

The industry standard is a 30% conversion rate.

Which is no better than pitching for a tender.

But a self-deluded Jedi mind-trick takes place:

“These are not the numbers to look at, just look all those lovely warm referrals.”

All the while, ignoring the cost of the warm referrals.

Time wasted with people that in the end, say ‘thanks but no thanks’.

Sometimes two or three meetings spaced out over months. Hours spent chasing crucial financial information. Getting feedback, wanting consensus from both partners, even just a straight-up answer. Any answer.

And that happens two out of three enquiries. The time and money wasted is large. The opportunity cost more so.

Yet..

If advisers were more selective and focussed only on their ideal clients; on those they best serve… rather than yes to everyone that knocks on the door…

If advisers could simply, clearly, articulate the why, what, how of financial planning…

If they had the courage to say, “Sorry, we can’t help” and offer to refer enquirers on…

They would end up with the right referrals. And the right referrals are way more valuable.

At delivering Results we have created a proven marketing program that attracts the right new clients for financial advisors.

• People calling you up, asking for your help, wanting to know more
• Already pre-qualified, your ideal potential clients
• Building your brand in a targeted, problem solving context.

Let’s talk. Contact Alex Meijnen today on 02 4023 5958 or email alex@deliveringresults.com.au