One of the time-tested techniques of sales is to obtain referrals by dropping a “who do you know” bomb on them…and it is dumb.
It has never actually worked all that well really, and it works even less well today.
Adding an extra word in there doesn’t make it much better either: “ who do you know WHO… .” just makes prospects squirm a little bit more most of the time.
The reason why this awkward and stumbling technique earns the label “time-tested” is simply because it has been around forever, and being a simple technique it does at least create a mindset of continually being alert to the desirability of obtaining constant referrals. And of course there is the element of chance tipping in your favour introduced if one does something often enough. That is, we occasionally get lucky with it, which reinforces the belief that it is a methodology that produces results of a sort.
It is an awkward and clumsy technique no matter how you look at it.
Picture the scene: you have done a good job with your clients and everyone is basking in the glow of having successfully waded through a 40 page Statement of Advice and having agreed to get together again to fill out another 2 hours worth of paperwork. Everyone is really delighted and upbeat at this point, right? Then you drop the Who-do-you-know bomb. If there was no buyers remorse beforehand then there is a good chance there is about to be.
But perhaps it is just a timing issue….it might be better to wait until we’ve had 3 or 4 meetings and they’ve waded through 5 hours of paperwork and then ask them? Maybe not…. Perhaps we should just jump in before they get overwhelmed by the process and the paperwork – grab the referral and then do the job?
If you consider it from the client’s perspective there is no right time is there? All you did was lob an unexpected bomb into proceedings.
That is just plain awkward.
Compounding the awkwardness from the client’s perspective is that for the overwhelming majority of advisers they feel just as awkward about it too. So most times everyone involved is feeling pretty awkward about the whole process. Perhaps that is why advisers are often poor at getting referrals: BECAUSE they’ve been trained to do this way and they KNOW it sucks.
I don’t think it is unfair to say that asking the “who do you know” question is just dumb. Everyone hates it. There is never an ideal time for it. It puts people on the spot and creates tension and awkwardness that didn’t used to exist. It undermines good business relationships.
There are 2 key concepts which must be understood and acknowledged if you wish to get constant quality referrals:
1. You have to earn the right to them in advance
2. The person giving the referral is taking a risk.
There is a transfer of trust that must occur when a referral is given. A client is entrusting you with their own reputation and relationships with people that matter enormously to them. That is an incredibly risky thing for most people given how highly we value our relationships. Think about it: most of us place family and friends right at the top of our list of most important things in our universe. They are generally more important than possessions or charitable interests, or business…they are what matters to us most.
You have to nullify that risk through demonstrated values and consistent behaviour if you want to to receive referrals constantly.
You have to earn the right to referrals. Your professionalism; your attitude; how you handle personal information and relationships that your client can see…these are the things which provide reassurance that any transfer of trust is at a reduced risk for a potential referrer.
Having earned the right to obtain referrals though still does not lay the groundwork for the “who do you know” bomb. It’s still a dumb tactic even if you’ve earned the right (in your own opinion) because it puts people in an awkward and semi-confrontational position immediately. The best that will happen most of the time is they might throw you a few names of people that they are relatively relaxed about losing as friends anyway, and they won’t give you a personal introduction. In essence we are playing for some new names therefore which are worth little more than a cold-calling campaign AND and put a client relationship in jeopardy. Dumb.
So you do have to be referable first. You do also have to set reasonable expectations and assume responsibility too though. That means you have to let clients know in advance that you expect to receive referrals if you are doing a good professional job AND have earned the right to be trusted with them.
You have to earn the right to receive referrals. You have to be positioned for them. You have to be known and trusted as a “safe” person with them.
Simply putting people on the spot with a not-so-cunning question and expecting them to name names is alarming to most clients, and counter-productive. Today’s professionals are expected to be more sophisticated and protective of the client’s interests than ever before, and doing that well does in turn lead to a higher probability of being referred by happy clients to the right prospects because we have earned their trust and faith that we will look after their friends and peers.