In a recent  roundtable lunch that I hosted with advisors, the question came up as to the right frequency with which to raise referrals with clients.

Some advisors were hesitant on introducing the topic of referrals at all.  On the other hand, one advisor talked about a direct connection between how frequently he talked to clients about referrals and the chances that referrals would follow as a result.

While true to a point, there are some obvious cases of going too far.

For example, suppose you raise the subject of referrals on the phone to a client in the morning.

If you believe that advisors should “Always ask for referrals”  then if you happen to speak to that same client the next day, you should say “Since we spoke last, have you run into anyone I should be talking to?”

Few advisors would take the idea of always asking for referrals to this extreme – but the question still persists about the right frequency with which to raise referrals.

Quality over quantity

While the “more the merrier” approach does apply to some aspects of the advisor client relationship – that’s not true of referrals. Yes, you want to let clients know you’re open for business, but bringing this up too often can backfire.

The reason is quite simple. Remember, clients provide referrals to help their friends, not their advisors. And if referral conversations become a recurring part of every conversation, you risk being seen as a pest rather than someone committed to helping clients achieve their goals and as operating from your agenda, not clients’.

As a result, the focus of referral conversations needs to be quality, not quantity. For example, throw away reminders that you’re open for business generally seem to have marginal benefit. As a general rule,  a three minute conversation about the specific attributes of the clients that you work with best and can help the most that actually engages clients (and is in fact a conversation) is far more effective than any number of casual reminders that “referrals are welcomed.”

Establishing  a rule of thumb

Even with a focus on quality first, you still need some guidelines on how often to raise this subject in talking to clients.

Part of the difficulty here is that there is no universal answer to this question – it will vary with each individual advisor and client.

There are three scenarios in which it’s easier to bring up referrals:

1. If clients have provided referrals in the past. While respecting client confidentiality, if the person they referred is still a prospect, there’s an opportunity to update clients on the progress of the conversation. And if the person they signed up has become a client, you can briefly mention that things are going well and thank them again.
2. If they joined you as a referral themselves.

One advisor will introduce this topic by saying: “You’ll recall that the only reason we’re working together is that you were referred by NAME OF CLIENT”

1. If a client is coming to an event you’re running, you have an opportunity to call him or her a couple of weeks beforehand and say:

“Dan, I look forward to seeing you at the tax planning lunch that my branch is hosting on February 4, with our panel of three accountants. The reason I’m calling is that while the bulk of my guests will be clients like you, I do have one spot available at my table. I wonder whether your partner Joanne might be interested in joining you and coming along.”

So the frequency will vary – but you still need a rule of thumb.

Here’s one way to think about the frequency with which to bring up referrals in client meetings.

Unless clients raise the topic, you should bring up referrals no more than once every three meetings or every two years, whichever comes first. That means that if you meet with clients annually, you would raise referrals on every second meeting … or every two years. If you meet with clients twice a year, that means you’re bringing up referrals every eighteen months.

This assumes, of course, that you haven’t received a referral in the meantime – if you do get a referral, this creates an opportunity to keep this top of mind by updating clients on the progress of your conversation with their friends.

Guidelines for referral conversations

There are at least three implications to adopting a more selective approach to raising referrals with clients:

1.  First, a “less is more” approach only works if the conversations that you do have are higher quality and engage clients.
2. As a result, you need to plan the conversation. One approach I’ve written about in the past is incorporating a referral conversation into the agenda for client meetings.

So when you’re setting the meeting up, after first finding out what clients want to talk about, you could then go on to say:

“One other topic I’d like to briefly discuss when we meet. You may recall that a couple of years ago we talked about the qualities of clients that I found I could help the most. I’ve recently updated that list – when we meet, I wonder if we could take three minutes to talk about this, should you be talking to someone looking to make a change in advisors.”

1. Finally, you need to rigourously record every time you talk to clients about referrals. Chances are your clients will remember when you talked about referrals – but unless you record this in the client file, you won’t.

All of this is much more effort than every time you meet with a client saying “Who do you know who I should be talking to?”

But it’s results that are the standard of success, not the ease of implementation.

And if results are your priority, then consider whether a “quality over quantity” approach to referral conversations might be right for you.