The Two Threats that Ruin Referrals

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When you hear or see the word “threat,” it triggers you in some way. Associating that word with referrals will evoke a terrifying shiver. This is, of course, assuming you’re interested in wanting to acquire more referrals.

A referral threat is typically an external, negative factor that could hurt your overall referral success. It’s one piece of my new Referral SWOT Analysis™ that includes referral strengths, weaknesses, opportunities and threats. In some instances, the threat can be internal. Determining your referral threats early enough often gives you the opportunity to minimize or eliminate them, plan for them and take action.

As a referral and business coach who works exclusively with financial advisors, I’ve seen referral threats erode the revenues of firms. Many firms are not even aware of the threats as they hide behind a veil of satisfied clients waiting to be exposed. There are those firms who know a threat exists, yet don’t have a clue how to address it or make it go away. Threats attack your bottom line, stagnate your growth, limit your reach and effectiveness and weaken your position compared to your competitors.

Let’s look at the two most common threats.

1. One rainmaker

One of the most common referral threats I’ve seen is that a firm relies too heavily on one referral rainmaker. There’s one guy (and yes, it’s typically a male advisor) who seems to be really good at bringing in all the business. He’s the one who has developed the relationships over the years. He’s the go-to person that people call when they refer to the firm. Then, as the business comes in, he feeds it to the other advisors in the firm.