Take a proactive approach to generating quality referrals.

8 Strategies for Client Referrals

LPL Financial

To build a quality referral pipeline, start with a clear value proposition that outlines the clients you serve and the solutions and benefits you offer them. Share it with your best clients so they understand your approach. Profile your ideal prospects and target specific individuals. Insist on an introduction and thank your sources.

Data shows providing exceptional service in 5 key areas drives client loyalty and increases the likelihood of client referrals.

Building a quality referral pipeline

An advisor’s business thrives on referrals. A client who shares their positive experience in working with you is far more powerful than any marketing initiative, and requires far less promotional effort and expense on your part.

However, quality referrals take time to generate as they are based on servicing clients effectively and consistently over time to build trust. Complicating matters is that many advisors are reluctant to ask for referrals.

If you’re finding referrals don’t seem to be coming easily or naturally, it may be time to evaluate your service and ensure your exceeding expectations. As a guide, we’ve developed the following best practices to help strengthen your referral pipeline.

Start by driving client loyalty

The referral process starts with providing exceptional service to clients in the areas that matter most to them. A recent Marketing Strategies International Cogent Report surveyed affluent investors and identified the top five areas in which exceeding expectations drives customer loyalty:1

  • Quality of investment advice
  • Financial stability
  • Easy to do business with
  • Range of investment products and services
  • Retirement planning services

Put simply, when you focus on consistently surpassing expectations in these areas, you’re not only helping to ensure your clients stay with you for the long haul, you’re building a pipeline of people who may end up doing your marketing for you by spreading the word about you to others.

To learn more about finding a broker/dealer that exceeds your expectations, download our white paper, How to Find the Firm That’s Just Right.

Ensure clients are satisfied with your firm

You may have the direct relationship with your client, but it’s important to have a broker/dealer who supports you in providing excellence to your clients. After all, you could be doing everything in your power to make them happy, but if your firm falls short, it could impact your relationship.

The Marketing Strategies International report ranked LPL Financial #1 in all five areas that drive customer loyalty and was the firm affluent investors were most likely to recommend among 21 firms.

It’s imperative that your broker/dealer supports you in driving the client satisfaction that can lead to more referrals.

Check in often

If clients aren’t indicating whether or not they’re satisfied with the services you’re providing, make it a point to check in on a regular basis. Ask them how their experience is with the five areas listed above and if there’s anything else you can do to make it better. Their feedback is a great gauge for understanding your strengths and where you may need improvement to gain further trust.

Build up the relationship

It takes time to gain experience and earn enough trust that a client feels comfortable recommending you. Therefore, soliciting referrals from clients you aren’t in touch with often or who are relatively new could actually backfire if the client isn’t ready. Establish a great relationship before asking for a favor.

Time it right

A perfect time to ask for a referral is right after a client has a positive experience. Did they just comment on how easy it is to access their information? Did you just walk them through how their portfolio is performing? These are opportune times to let them know your services may benefit their friends or family members.

Perfect the request

It’s important to develop a professional approach to requesting referrals that makes it as easy as possible on the client. Have marketing collateral on hand that explains the various services you offer in case they prefer to pass that along to a prospect. Ask them whether it’s easier for them to provide your business card, send an introduction email, or give you the prospect’s contact information.

Ensure the referral has a positive experience

No matter the outcome, it’s important to always ensure a client’s referral has a positive initial interaction with you. The last thing you want is for the referral to report back to your client that they never heard from you or you failed to follow up with them. That would not encourage your client to recommend you in the future.

Make sure you exceed their expectations as you do with your clients.

Let them know you appreciate them

When you receive a referral from a client, thank them. Write a personal “thank you” note or email, take them to dinner, or perhaps give them a small gift to indicate your appreciation.

These 8 strategies are key to developing the type of loyalty that leads to clients happily recommending you to others–often without you even asking. However, it can’t be emphasized enough that the foundation of client referrals is first exceeding their expectations.

Connect with a business development representative and learn more about the opportunities being affiliated with LPL can bring.

Explaining your value

With the transition to fee-based services, advisors must justify service value and differentiate themselves. How will you stand out from the crowd?

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Our dedicated team has broad expertise in the financial service industry and is ready to help you find the ideal environment in which to grow.

How to Find the Firm That's Just Right

The right partner should support your clients and empower your practice with what it needs to grow. Learn the key areas to evaluate a firm.

1 Market Strategies International, Cogent Wealth Reports, "Investor Brand Builder™: Maximize Purchase Intent Among Investors and Expand Client Relationships," November 2017.

ABOUT THE REPORT Market Strategies International’s Cogent Wealth Reports: Investor Brand BuilderTM provides a holistic view of key trends affecting the affluent investor marketplace. The November 2017 report is based on a web survey of over 4,000 affluent investors, who hold $100,000 or more in investable assets. A total of n=82 LPL advisor clients were represented in the study. Customer Loyalty is based on how likely the participant would recommend each of their investment account companies to friends, family, or colleagues. Participants also rated their investment account companies from 1-5 across 10 keys aspects of client experience.