This post has appeared in the India Markets Observer 2018, an online publication that brings together experts who discuss these challenges in the fund industry and investing insights and various perspectives.
Most of what we have been told about attracting referrals is incomplete, misleading, or wrong. Stephen Wershing, President of The Client Driven Practice and author of the book Stop Asking for Referrals reveals the secrets of attracting referrals and how to communicate your value.
Referrals are viewed as the primary source of getting new clients for advisers. How should advisers increase their chances of getting referred without actively seeking referrals?
Referrals should be unsolicited. In most cultures (Japan, for example, is a notable exception) when a friend is in need of something we try to come up with suggestions of people or companies they might contact to find what they’re looking for. We do it automatically and instinctively.
If you solicit a referral, it means that you have not positioned yourself well enough as a solution for clients to remember to recommend you at the right time, describing something about you that is compelling.
There are productive ways you can talk to clients about making referrals. In a study I recently did with Julie Littlechild, we found that discussing the profile of your ideal client frequently was associated with receiving more referrals.
If you have some special approach to help clients address a problem they have, you can benefit from describing that periodically with clients. Whatever will help them understand who you are looking to meet and what special thing you have for those people is good to discuss.
Your clients must have a clear idea who you are looking for and what customized advice you have to offer.
Client advisory boards are common in developed markets. What are the advantages of having one for Indian advisers?
What’s most important to clients can be very different from what is most important from a financial planning perspective. For example, you may believe that the most important part of building a portfolio is asset allocation. But the client may believe that the most important thing is that you call them back quickly. They trust you to do the important things, so what’s valuable may be different.
Understanding the client’s perspective can benefit you in many ways. You can find out what’s most important about the service you provide.
Asking, of course, is the best way to find out the client’s perspective on things. If you ask one client at a time, you get valuable information from those individual clients. If you ask a client advisory board, you get additional insights by listening to their interactions.
How should advisers differentiate themselves from other advisers?
Have a niche. Focus on the needs of a target population or providing a unique experience. If you understand a group of people better than other advisers, if you provide an experience that is different from other advisers in a way that some people find attractive or compelling. If you have a technical skill that benefits a particular group, you set yourself apart. Maybe you can develop expertise in doing multigenerational planning when the kids have moved to another country. Choose a subset of the population that you want to serve, find out how their perspective differs from the rest of the population, and create an experience around it.
When it comes to charging fees, how should advisers communicate their value to clients?
Describe the outcome and then ask the client to compare the fee to what they believe that outcome is worth. For example, an adviser might say “I can help you determine how much you will need to retire and maintain your lifestyle, how much you will need to save along the way, how to manage that portfolio, and how to manage the risks that you may get sick or injured or pass away before you get there. Here is what I charge for that service. How do you think the value of that service compares with my fee?”
How can advisers use content marketing to get new clients?
Find your niche. Create an experience that separates you from other advisers. Once you know the unique challenges and concerns of your target market, develop a list of timely messages that relate to those needs. You might write a blog, author articles for newspapers or magazines, or simply find articles other people have written you can link to that address those particular concerns. Use social media. Look at expanding your email list. The more consistently you can communicate that you know your target market deeply and share their perspective, the more likely it is people in that group will seek you out.
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