At one time, getting a referral to a client's friend or family member had a high likelihood of leading to that friend or family member becoming a client. Not quite a slam dunk but close.

Today the world has changed in all sorts of ways. One of them is the number of cases in which investors who've decided to change advisors are soliciting multiple referrals and interviewing two or three different advisors.

As a result, referrals no longer necessarily win you the business. More and more, referrals get you into the game to compete for that business.

The upshot: You need new strategies after you get referrals.

One advisor's story

A while back, I spoke with a Chairman's Club advisor at a suburban Toronto branch of a bank owned firm about his experience converting referrals.

"When I was trained thirty five years ago, it was drilled in to me that I needed to track the outcome of every meeting with a prospect. And I still do that to this day.

In the mid nineties, my conversion rate when someone was referred to me was over 90%.

Five years ago, it had dropped to 60% - I was still winning the majority of prospects who were referred to me, but the number had dropped and was still dropping.

So clearly I needed to raise my game."

A new approach

He met with his team to talk about what they could do and discussed this with other members of the Chairman's Club who he'd come to know over the years.

As a result of these conversations, they changed the process for communicating with prospects.

When he sets up a meeting as a result of a referral, his assistant couriers an information package with background information on him, his process and his firm.

And then, the day before the meeting she calls the prospective client and says:

"Dan asked me to give you a call to confirm your appointment tomorrow at 3.

And he also wanted me to tell you that at that time of day, sometimes the parking lot for our building is full. So when you come into the parking lot, look for the space with your name on it."

And sure enough, when the prospect drives into the parking lot, right next to the door is a spot saying "Reserved for John Smith."

When the prospect goes to the receptionist and asks for Dan Richards, the receptionist says: "Are you Mr. Smith? Dan told me he was expecting you and to let him know as soon as you arrived."

Since this advisor began doing this, his success rate in converting prospects to clients has climbed to over 80%.

" I may never get back to the 90% success rate I had in the 90s"  this advisor told me, " but I know that if I lose a client now, it's not because someone outworked me."

We shouldn't be surprised by this advisor's success - this approach conveys attention to detail, client focus and a genuine desire to acknowledge clients at a personal level. And it also sets this advisor apart from everyone else this prospect might be talking to.

This strategy is specific to this advisor - chances are it won't work for you.

But in a world where competition is intense and investors more discerning, you do need to think about how you're going to differentiate yourself when competing for a prospective client's business.

The one downside to this approach, by the way - this advisor can't stop doing this when someone becomes a client; he has established an expectation of a reserved parking spot for future meetings that he and his team have to keep delivering on.