Olivia runs a six-adviser firm in Brisbane’s Ashgrove.
Business is good, so good she hasn’t sent a newsletter in two years and hasn’t needed to spend anything on social media.
She didn’t reach out to me to discuss new business issues. We caught up to discuss her productivity issues.
“We’ve never had to market,” she told me at a café on Stewart Road, arms folded as she’d just delivered the punch line. “Word of mouth. That’s it.”
I asked her if she’d ever actually asked a client for a referral. “No,” she said, almost offended by the suggestion. “If you do right by your clients, referrals come naturally. Doctors don’t ask. Lawyers don’t ask. Accountants, engineers, same thing. I like that model. I actually believe it is unprofessional to ask.”
She’s right about the other professions.
She’s wrong about what it buys them.
The doctors, lawyers, accountants and engineers who never ask for referrals are, like most providers who never ask, content attracting more of the same. Their next patient or client looks a lot like their last one, and natural referral delivers exactly that: more of the same, forever.
Those practices are not actively trying to build a fundamentally different book of business.
The issue isn’t about generating more activity; it’s about generating better productivity, achieving more while doing less, and that only happens with a consistent, methodical, specific approach to referrals aimed at the clients of the firm’s future, not more of the clients of its past.
Firms that lose the ability to do that deliberately will not get better. They’ll get busier.
Busier and better are different journeys.
One fills all available meeting times.
The other changes who gets into the front door.
Referrals done properly aren’t about generating more new business, they’re about generating the right new business.
When advice firms keep taking whoever walks through the door, referred or not, it just accumulates more of what it already has too much of.
Two things get in the way of generating productive new business.
First, most existing clients, even ideal ones, simply won’t refer.
Even with the right positioning and ask, to the right client, at the right time, our benchmarks suggest you should expect one in three. The rest won’t refer. But you don’t know who the one in three is and who isn’t, so a consistent ask to all ideal clients is essential.
Second, when a client does refer, it rarely happens on demand.
Clients like to consider who, if any, of their contacts might be interested. They certainly won’t refer without first seeking some form of consent from their contact.
So, there’s a lag, at least around three months, between asking a client and that client actually encountering someone in their network with a genuine need that might require advice.
And do you know what the biggest reason why existing clients don’t refer is?
They don’t want to risk any negative impact on their advice relationship with you by potentially increasing workloads beyond capacity.
Being busy is common.
Being busy but positioning yourself as always being available for the right opportunities is not common.
Also, paid referrals are not an option.
The moment an incentive other than the best interests of the person being referred is attached to the relationship, the referral stops being about the person being referred and starts being about the person doing the referring. There’s only one set of best interests to serve. The potential new client’s.
So it is not about asking more clients for more referrals. It is asking the right clients, the ones whose networks look like the future the firm is trying to build, and being honest with them about the team’s capacity to serve so they feel confident referring.
If your firm stopped taking every referral that showed up and only took the ones that align with the future you want to work in, would you have more clients, or better ones?
What do you reckon?