Let your data drive your referrals.
A few years ago, I was spending the afternoon with a South Florida RIA, helping the firm work through an exercise to more effectively segment their client base. As I delved into their ACT database, it struck me that amidst all the client data that this firm had accumulated over the years (and I’m talking minutia here…to the point of tracking the name of their clients’ family pet) there were two pivotal questions that shockingly had never been asked of any client. What is the name of the attorney you work with? And who is your CPA?
When I pointed out this omission to the principal of the firm, his head tilted a bit to the side and he looked at me with that same vacant expression that eerily reminded me of my dog watching TV.After a more detailed conversation, I came to understand that while about two-thirds of this firm’s new business came through referrals, all of it was generated purely from client referrals…they had never thought to put a strategy in place to also generate referrals from Centers of Influence. It’s a suprisingly untapped opportunity that many advisory firms either overlook entirely, or assume requires extensive time and effort to cultivate. In reality, however, it’s an incredibly simple undertaking.
In the case of this firm, we added the two aforementioned data points into their database and over the course of three months made a concerted effort to identify both the attorney and CPA working with each of the firm’s advisory clients. With all the firm’s employees onboard with the goal, and using a combination of outbound calls from support staff in conjunction with a two-pronged email campaign, were able to gather the data on more than 75% of the firm’s 200+ clients.
To any of you who have gone through this process, it will come as no surprise that when analyzing the data there were a select handful of firms (4 CPAs and 3 Attorneys) that repeatedly showed up multiple times. Why is that important? Because THOSE are the firms who are your key COI targets. Think about it…what better possible conversation starter could there be than picking up the phone, calling one of these individuals and saying, “I’ve noticed that you and I serve many of the same clients and thought that it would be a great idea to sit down and learn a little bit more about each others business.”
It’s a simple and compelling reason to get together, and the initial building block of what can potentially become a lucrative referral partnership that runs both ways.
When you eventually meet, bring along a one-pager about your firm – on one side, a brief summary of your niche, value proposition, investment philosophy and services; and on the reverse, an overview of your client engagement process/service delivery model. Ask similar questions of the individual and most importantly, look for similarities in style, approach and temperment between the two of you. Generally speaking, a client who is comfortable with you will most likely be comfortable with similar personality types when dealing with other professional service providers.
Don’t try to establish a referral relationship too quickly; give it time. If there seems to be an initial comfort level, suggest keeping the lines of communication open and getting together once a month to compare notes as business owners. In all likelihood, within a few meetings you are both going to know whether this is the basis for a strong referral relationship or not. If it is, formalize it. You’ll be amazed at the level of business that COIs can drive to your firm! But don’t forget to make an effort to reciprocate. A simple offhanded remark of “Oh, I was meeting with an attorney friend who works with a number of my clients, and he said _____” is often all it takes to generate interest among a number of your clients
Just remember, however, it all starts with effective data capture. So fire up that ACT/Goldmine/Excel/Outlook/Salesforce database and take a look at what information you’re capturing – not just is it enough information, but more importantly, is it the right information?