How referable is your business?
- Referrals from established clients is a good way to organically grow an advisory business
- We believe there are four key ingredients necessary to create a referable advisory business
- By focusing and improving on each of those four ingredients, you will create a “story” that can make it easier for your clients to let others know why they work with you
Imagine you are riding a bicycle, but you have to keep it stationary. It’s almost impossible, right? It becomes difficult to balance; you tip over to one side and fall.
Running an advisory business is the same: You have to keep moving, you have to keep growing, because success is not static.
That reminds me of the question advisors often ask us: “How do I increase my client referrals?”
It’s a good question. I would argue, though, that a better version of that question is: “Am I running a business that is referable?”
It seems like a simple question and one that we may think can be resolved instantaneously. After all, we live in a fast paced, on-demand world where we are used to things happening quickly to get the results we want. However, a referable business requires time to foster the right relationships, refine messaging, improve internal processes, and create a unique client engagement experience.
The 4 ingredients of a referable business
There are four key ingredients that we believe help create a referable business. If any one of these areas falls short, you may not receive the referrals you had hoped for.
1. Offering a RAVE Service Model
RAVE stands for Rare, Advocacy, Value, and Experience. Is your service model one that compels your clients to tell their friends, relatives and coworkers about the unique experience of working with you?
- Are you delivering on a service model, especially to your best clients, that is RARE and hard to imitate by the competition?
- Are you building ADVOCACY among your clients to attract and win more clients just like them?
- Are you delivering to your top clients what they VALUE most?
- Is the EXPERIENCE of working with you and your team memorable to your top clients so that they will talk about it to others?
The most important factor in delivering on all the above is consistency. If you are not executing consistently, you could be eroding your brand, which may make it difficult for existing clients to recommend you to their friends, family, and peers.
2. Your Unique Value Proposition (UVP)
According to research conducted by Business Health Pty Ltd, one in three U.S. financial advisory firms report having a fully documented value proposition. These firms are achieving 87% higher average level of revenue compared to those who don’t1. Having a defined unique value proposition gives you the ability to articulate and communicate your value with conviction, not only to existing clients and prospects, but also to your network of professional Centers of Influence (COI).
A UVP should evoke a feeling that drives the client to act, is authentic and consistent with your messaging and will help answer questions such as “how is my business different and why should a client choose me?”
3. Defined and clear Target Market
One of the most powerful strategies you can implement to help spur organic growth is to narrow your focus to identify a target market. Or, as we like to say, “Get focused to grow big!” I realize it can sound counter intuitive. How does narrowing my focus help me access more opportunities? Think about it this way: Aligning your practice to target your ideal prospects and clients helps build brand awareness. Having a target market that allows you to address the specific needs and concerns of that market will help make you a sought-after specialist. A target market also creates efficiency for you and your team, allowing you to focus on what your clients value most.
4. Cultivating Professional Centers of Influence
Advisors often wonder why professional COIs don’t refer more clients to them. There could be many reasons but a common one is that the COI may not understand what’s in it for them. Remember, they are also trying to be successful in their field and need to know that you can add value not only to their clients or who they refer to you, but also to their own business.Cultivating the relationships you have with your professional COIs by being proactive with regular calls or meetings, establishing expectations around what you are each willing to do for the relationship, taking the time to understand their business and how you can help them and the clients they refer to you, will demonstrate that you are invested in the relationship. This may help spur referrals.
If you look at the spider web diagram below, you can see that if any of these four areas are not working, it may impact whether or not you are receiving referrals. In our Business Solutions seminars, we ask advisors to rate their practice in each of the four areas, on a scale of one to five. Ideally, you would end up with a perfect circle. If you don’t, well, the diagram will help you realize which of the key ingredients of a referable practice you need to work on.
By focusing and improving on each of these areas, you will make “your story” easier for both existing clients and professional COIs to repeat and share why they work exclusively with you.
The bottom line
In an industry where there are so many variables out of our control, we tend to focus on external factors to help us grow quickly. But relying on inorganic growth may make you feel like you are pedaling a bicycle but not getting anywhere. Instead, by focusing on the things we can control such as processes and relationships that can lead to organic growth, it may start to feel like you are moving forward.
Considering all that we covered in this blog, would you refer you and your team?
One of the phrases we use frequently in our Business Solutions seminars is to ensure that you are “taking time out of the business to work on the business.” Now may be the best time to think about your business-building strategy: turn the summer doldrums into the summer bustle. Reach out to your Russell Investments regional team for information.
You can also reach out to your Russell Investments representative if you need help getting referrals. We have a variety of resources that you can use to build on the four key ingredients to create a referable business. For example, we produce a handbook to help you refine your Unique Value Proposition, a Target Market Guide that helps you implement a successful market strategy and a Centers of Influence guide that provides strategies to develop effective professional COI relationships.
Remember, though, that getting referrals is a lot like riding your bike up a hill. It’s a lot of work at the beginning but once you are at the top you can reap the rewards.