Managing Director of Triplejump Group Holdings, Cecilia Farrow, explains the value of establishing referral relationships and how to get to know them, educate them on your services and work through objections they may have to referring clients to your business…

Seeing enough new potential customers is a vital part of business. No matter how good the service or how good you are at delivering it, if you don’t engage with enough new prospects your business will not produce the results it is capable of.

The strategy of developing effective referral relationships with other professional advisers such as accountants, lawyers and business consultants is an approach many risk advisers aspire to, particularly those wanting to advise businesses. But few achieve the level of referral outcomes they are aiming for and many become frustrated and perplexed by the lack of success.

Experience shows us that referrals from a trusted professional (if referred well) will be our ‘warmest’ and our conversion rates will be higher. However, to get that referral flow running well, you first need to build your status as a trusted adviser with the professional and this process takes time and effort.

At the core of this, your Centre of Influence (COI) partners will need to:

  • Understand your service and its benefits for their clients
  • Have confidence in your capability to deliver a high-quality experience
  • Trust and respect you

Don’t confuse understanding your service as meaning understanding your advice workflow process – that’s how you deliver your service, not how it helps clients. A COI needs to understand the problems you solve for their clients and how that leads to protection of a client’s wealth and income.

You need to develop the description of your proposition so that it:

  • Captures attention
  • Positions you as an expert
  • Is easy for others to repeat

In my experience, this is no small feat especially as many of us have been taught that we differentiate ourselves by explaining the steps in our process rather than the outcomes we achieve for our clients.

It is easier for a COI to explain to a client that they feel it would be worthwhile to meet with you because they can see that the client has some potential exposure to creditors and they feel confident you can help them to protect their wealth than to expect them to give a spiel about the features of your service.

If a COI is a client of yours then the transfer of understanding and trust will be easier to achieve, but it does not need to be a limitation to your relationship if they are not.

Getting to know your COI
If you want to get traction with a COI you need to know their business very well. Not just what they do e.g accounting, but their value proposition and how they fulfil that.

It is through this knowledge that you are more likely to be able to determine if the firm cares about the client beyond the service they provide and will proactively identify and help the client solve other problems.

If this is not part of their culture the likelihood they will actively refer clients is low no matter how much effort you put in. So, one of the fundamental things you need to learn about a potential COI is how much they care.

Websites can be deceiving in terms of understanding what services dominate the work a professional firm provides to clients. For example, accounting practice websites will often describe services of Business Advisory indicating a more proactive and holistic approach to clients’ needs.

But if, for example, 90 percent of their revenue comes from delivering compliance services then it might indicate that the focus of the business is more retrospective and insular than on helping clients develop and grow.

Building a profile of a potential COI and their business helps you find the ways to work with them and to collaboratively add value to clients. But it will also enable you to determine quickly if they really aren’t the right link for you and you can direct your effort elsewhere.
Developing an Operational Diagram of the firm will provide you with important insights into:

  • Who is in the team
  • What roles they have with clients (who has frontline engagement)
  • The services the business provides and how each contributes to overall revenue

It can be easy to fall into the trap of believing the only relationship you need to establish is with the principals within a professional practice, when in fact it is the associates who have the most regular contact with clients.

Use the insights from the Operational Diagram to identify who needs to be educated about your services, trained on how to identify which clients it would benefit and how to make referrals. Don’t hand on the job of doing this internal work on your behalf to the principal who might be your first point of contact.

However, to really get to know your COI you need to extend your discussion to other areas such as the:

  • Core business offer
  • Client proposition
  • Values and philosophy
  • Target market
  • Core areas of expertise
  • Key relationships with other professional services
  • Future vision

The alignment of these characteristics is in my experience, vital to creating a successful COI relationship.

Educating your COI about the problems you solve
It has taken you many years to develop your expertise and understanding of the problems you solve for clients. Don’t expect that one or two meetings with a COI will transfer that same understanding to a level where they feel confident to explain to a client why you could help them.

Develop an ‘education’ programme for your COI (and their team) that builds up their knowledge of the financial risks that their clients face as a result of disability or death contextualised in case studies that show the real harm – physical and emotional – that occurs when risks are not managed.

You can also develop case studies that show how your advice has improved the financial resilience of a client to a potential event of disablement or death.

A quarterly series of 30-minute workshops to the relevant team members delivered over breakfast or lunch will enable you to:

  • Cement your relationship as a trusted and capable adviser
  • Deepen their knowledge of how you help clients
  • Open the conversation about clients who the issues might apply to

If you establish relationships with four COI businesses and do one seminar a year with each one, you could connect to 80 potential target clients.

Don’t expect that your service proposition will be front of mind for the COI without regular inputs so consider how you could develop content that is accessible, easily digestible (short and on point) and sharable with their team and clients that tells stories about problems you have helped clients solve.

Help your COI add value to their client relationships through joint seminar events which cover a few topical issues related to the services they provide and a session on risk management. This can connect you to 15-20 clients directly without the COI having to make referrals.

If you establish relationships with four COI businesses and do one seminar a year with each one, you could connect to 80 potential target clients.

COI objections to referring clients to you
The objections that a COI will give you about referring clients to you tend to fit into a few common categories. Your understanding of their philosophy and values may help determine if these are real obstacles or whether they reflect an opportunity for you to support a COI to learn the art of making effective referrals.

A COI may not want to be perceived to compromise their independent professional relationship with their client so they may say things to you like:

  • I don’t refer to just one person – I give the client a few names
  • I will let the client choose whether or not they call you (I have given the client your card)
  • I don’t refer to anyone

If the COI has made it part of their ‘value proposition’ that they will not have any alignment with any one adviser business then you may never be able to change this behaviour.

However, you may also find that in reality this is articulating other issues with trust, understanding or discomfort about making any referrals. To test the reality of this objection you might find it helpful to ask some further questions:

“I can understand that it might be important to you to ensure that you don’t want to appear to favour or be aligned to any one firm.

  1. What are the standards that you believe are important for an adviser to demonstrate to you about how they do business?
  2. How do you select the advisers that you will put in your ‘shortlist’ of recommended advisers?
  3. What would be helpful for me to show you about my service to clients to help you feel comfortable including me in your recommendations?
  4. What guidelines do you recommend to your clients to help them decide which adviser will be best for them?”

Many COI’s feel it is being pushy and that you will ‘annoy’ the customer if they let you have the contact details. You might find it helpful to suggest a process:

“I can understand that you may prefer to let your client choose whether or not they want to contact me. My experience is however that most clients just never get around to picking up the phone even though they may really need my help. I am guessing that you are making the recommendation to see me because you believe they will get value from my services. What concerns you most about me contacting them?

Could I suggest a process that might help address this?

After you have mentioned to the client that you feel there are some risk matters that might be important for them to review and you have given them my card, would you be happy to say to the client:

‘I know if you are anything like me the chances are you will get so busy that you will forget to call Mary from ABC. How would you feel if I suggest she calls you and explains to you how she works with clients’? You can decide for yourself after you have spoken to her if you want to meet. From what I know of what she does she may well be able to help you.’”

You are asking a COI to sell your service to their clients – make sure you have given them the tools to make that as simple as possible.

They don’t really understand the value proposition you have to offer and are still orientated to the insurance solution rather than the problems you solve, so they make statements like:

  • I asked the client and they told me they already have an adviser
  • They already have some insurance
  • We ask some risk questions each year as part of our service and so we would only refer a client if we identified some shortcomings

Your value statements about your own service proposition should be key in helping you overcome these objections. You might find it helpful to respond with:

“It is common to find that most clients have had some dealings with insurance, however as your own experience shows the way I approach solving a client’s problems and the service that I provide is vastly different from being just sold an insurance policy. How could I help you explain that to a client so that next time they say that to you, you are able to encourage them to have a review of their needs with me? In the meantime, would you be comfortable letting me contact the client to ensure that they understand exactly what we do and how I can help them?”

Making the process as easy as possible, e.g. giving them the email content will help them to act. If the COI has to think about what to say for themselves or what to write they will be less likely to do anything.

Developing effective COI relationships is not a passive process. It requires a structured and persistent approach aimed at building trust, understanding and skills – skills of how to make a referral that results in action. Think hard about how you are defining what you do for clients – process isn’t what ultimately defines you – it’s the problems you help clients solve.

Seth Godin in The Dip says, “Selling is about a transference of emotion, not a presentation of facts. If it were just a presentation of facts, then a PDF flyer or a website would be sufficient to make the phone ring.”

You are asking a COI to sell your service to their clients – make sure you have given them the tools to make that as simple as possible.

Cecilia Farrow is the Managing Director of Triplejump Group Holdings, a company which provides software solutions for Business Risk Advice and Business Risk training.

Disclosure: Cecilia is the Practitioner Director for Risk on the Financial Advice New Zealand board. The views expressed in this article are solely hers and are not intended to represent the views of Financial Advice New Zealand.