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 recently completed another round of client surveys. We have been doing these surveys every other year for 12 years now. Each and every time, we have over a 90% client satisfaction rating. More than 90% of our clients say they would refer us if asked. However, our new business comes from only a handful of clients who actually refer us. Why do you think this is happening? Is it that our clients just say they will refer because they are happy with our service, but they really have no interest or intention of referring? Alternatively, are we doing something wrong in not grasping an opportunity that sits in front of us? We are divided in our beliefs here and would like an objective view.
Bill K.
Dear Bill,
As an independent arbiter, I am going to say that the truth lies somewhere in the middle. Yes, I believe that when clients are happy and are filling out a survey, they are likely to be positive in their responses. There may be an optimism or happiness bias at work. If clients are happy with you overall, when you ask them if they would refer you, the logical response is “yes.”
However, the other side of the argument is also right. We’ve seen dozens of situations where a firm has willing clients who will refer, but the clients don’t believe they are being asked appropriately for referrals. The onus is on the advisory firm to ensure that it is easy for clients to provide referrals when appropriate.
How does an advisory firm make it easy? I’m guessing this would be your next question. There are a few things you might want to look at to ensure the road is clear for your clients:
- Identify those clients (if you have the names) who answered “yes” to the question. If they said they would refer and they gave you their names on the survey, it’s perfectly reasonable to reach out to them. Ask what they need from you to offer a referral. Don’t be shy; they opened the door.
- Consider publishing the results of the survey and give some overall themes. Tell clients what you heard from them, and note the topic of referrals.
- If you have a Client Advisory Board or a few trusted clients, share the survey results. Ask them what you should be doing differently to make referrals easier.
- Be sure that you are giving clients a message to share. You can’t expect them to know how to tell your story as you would, so give them marketing materials that are easy to understand and can be handed off to a friend or colleague.
- Focus on events and educational opportunities where they could comfortably invite a friend or colleague to learn more about your firm.
