Happy Clients - But No Referrals?

Beverly Flaxington

Beverly Flaxington is a practice management consultant. She answers questions from advisors facing human resource issues.  To submit yours, email us here.

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Dear Bev,

We have very satisfied clients. Our last client satisfaction survey showed a 98% “high satisfaction” rate. However, we don’t get many referrals. It’s frustrating because we do everything to serve our clients well – and we ask for referrals. Why don’t happy clients refer to us?

Sara K, Wichita KS

Dear Sara:

I love my cleaning people. They are attentive, efficient and excellent at what they do. But I don’t go around telling all of my friends they should use them. I don’t know who can afford outside cleaners and I would never want to infer that any of my friends don’t keep their houses clean!

But when a recent colleague who lives near me asked if I knew anyone good for house cleaning, I was happy to pass along their names. The truth is that clients don’t refer because they like us, or even because we are doing a good job for them. They refer because someone they know needs something and they think we can help. This is a critical point: It’s not about the advisor; it’s about the client and their universe of friends and acquaintances.

Keep doing what you are doing to make them satisfied – and ensure you provide lots of opportunities for referrals to happen.  Describe the type of people with whom you work best, provide events and educational opportunities for clients to bring a friend, create materials that can be easily passed along, take advantage of audio and video and send this to clients, have a newsletter and communicate, communicate, communicate. If you do all these things, when the time is right – you will be top-of-mind for referring.

Dear Bev,

I work in a large investment management firm. We have independent teams and I run a group of six people. We get a lot of support from the home office. I recently hired two people I thought I could groom as successors to me someday. The problem? They are lazy. They don’t want to do more than what I ask of them, or assign to them. I feel like they have a big company attitude and approach. My personal philosophy is entrepreneurial – if someone is going to take over my team, I would like them to show some enthusiasm and a “go get ‘em” attitude. What can I do to light a fire underneath these two and get them more engaged and proactive?

Sean D., New York City, NY

Dear Sean:

What process did you go through to hire these two people? Were they selected by the home office human resources staff or did you choose them? How much did you drive this hiring process? I’m wondering if they were influenced by dealing with people elsewhere within your firm. Were they clear about what they were coming in to do and what’s expected of them? Are they clear now exactly what behaviors you expect to see?

I emphasize the word “exactly” because in too many cases the person in charge thinks staff knows what to do and what’s expected, but when you probe with the employee, they don’t understand why they are in trouble or what they are – or are not – doing. Sit down with each of these people individually. Explain your expectations for them – frame it in a positive manner, i.e. the opportunity that lies ahead for them. Identify what behaviors concern you – don’t talk in generalities, make it very specific. Keep notes about what you observe on a daily basis that leads you to label them as “lazy.” Tell them what they are doing and by contrast, what you’d like to see them doing differently. And, remember not everyone wants to run an investment management team – they may be happy in a contributor role.  Clarify that this is a desired outcome for them, too.

Beverly Flaxington co-founded The Collaborative, a consulting firm devoted to business building for the financial services industry in 1995; in 2008 she co-founded Advisors Trusted Advisor to offer dedicated practice management resources to advisors, planners and wealth managers.  She is currently an adjunct professor at Suffolk University teaching undergraduate students Leadership & Social Responsibility. Beverly is a Certified Professional Behavioral Analyst (CPBA) and Certified Professional Values Analyst (CPVA).

She has spent over 25 years in the investment industry and has been featured in Selling Power Magazine and quoted in hundreds of media outlets, including the Wall Street Journal, MSNBC.com, Investment News and Solutions Magazine for the FPA. She speaks frequently at investment industry conferences and is a speaker for the CFA Institute.


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