The idea is that if we do a great job, we will get heaps of referrals. And if we aren't satisfied with the amount of referrals we are getting? Work harder.

But this advice is wrong. You could be doing an awesome job but not doing a few very simple steps. And if you do these steps, you will get all the referrals you deserve (and worked hard to earn).

But, before we talk about these, lets look at the research.

60% = never brings it up, don't ask, didn't know they wanted them.

81% = their method of referral is giving out a name and number.

90% = clients cannot define why we are different. What separates you from other brokers?

So, based on the research and focus groups, here are the top 7 reasons:

•I've never been asked

•I don't understand who my broker wants to work with

•I don't know how to explain what they do

•I don't know how to make the introduction

•I am too private

•The risk I take if the relationship/referral doesn't work out

•I haven't had a referable experience.

Reason 5-7 are "land mines" - they won't give you referrals (refer part 1).

5 characteristics of someone that might be a good referrer:

•They have to value their experience enough that they would refer.

•They have to fully understand your services and all of your products. Can they list all our services and also articulate why we are different.

•They have to know that your firm is growing (I.e. you want more clients) and who an idea client is.

•They need to know how to make an effective referral

•They have to be comfortable talking about and making referrals.

There are two things you must do in our to solve this problem - which I will cover in Part 3.

I attended a presentation by Dan Allison recently. He is a US-based trainer that works with finance professionals to help them generate more referrals. It was one of the best presentations I have been to for a long time.

Anyway, Dan explained this concept of 'gold mines' versus 'land mines'.

A land mine is a person that will never give you a referral no matter how awesome the service you offer is. It's not about you and what you did or didn't do. Its about their personality. They view making a referral as risky. What happens if you have a bad experience, don't like their broker, stuff up your relationship relationship with them (because the referred person wastes your time, and so on). Referrals are just too risky.

Whereas a gold mine is someone that loves to give referrals. They don't see it as risky. They see it purely as helping their friends. If they don't like their broker, then its their fault. They realise they aren't responsible for the results.

Often, we have been trained to treat all clients the same. If we haven't received a referral, ask for one. Or work harder to earn one. Use cheesing lines like "can you give me the names of 3 people that I can help in the same way I have helped you" and so on. If you say that to a land mine, you'll make them feel uncomfortable and probably burn your relationship!

You must look at your clients as land mines and gold mines. There will be some clients in the middle. For now, just focus on the gold mines.

•List the clients that you would hate to lose but love to clone

•Think about the ones that have given you referrals versus the ones that have not - is there any commonality in personalities?

•keep this list as we will work on these clients more in the second part of this podcast. Until then, stop treating all your clients that same.

The power of communication is easily underestimated.

How do you communicate something to a client can produce four possible outcomes:

1. A very unhappy client

2. A client that is indifferent

3. A satisfied client

4. A raving fan that sends you lots of referrals.

Often, we think that if we have lots of great news to tell clients, our clients will be happy. But if we have bad news, they will be unhappy. More often than not it's how you communicate not what you communicate that determines which category your client ends up in.

This is why it's critically important that you craft a few (probably not more than 10) template emails which are consistently used by everyone in your business.

After reading an email from your business your aim should be to ensure that the client feels:

· happy,

· looked after,

· cared for,

· important and

· valued.

Templates that you need to have in place to cover:

· annual review / interest rate review - positive and not

· low valuation

· loan approval or decline

· lower borrowing capacity than expected

· delays in application.

Tips for drafting templates:

· Remind them of your core values i.e. we care and are here to help

· communicate what work is involved

· empathise with how the client feels and tell them you feel the same

· tell them why it's a great outcome

· sell a future solution (i.e. its okay for no but we'll revalue in 12 months' time)

· always remind them of what you have done in the past

In this podcast episode I discuss how to craft template emails and I share an example of what he uses in his business for an interest rate review.

In March 2019 I will open enrolments for my course which shares all the systems that I use in my business including all templates, emails, report, scripts and so on. I only run this course once per year.

We all know how valuable referrals are. They are typically your target client. They come with a level of trust already. They have a much higher conversion rate and retention rate.

My research highlights that there are only two ways to grow a financial services business:

•Organically (repeat and referred clients); and

•By acquisition - but this presents big problems/challenges.

Advertising and marketing is important - as it will help organic growth too - but imagine a situation where you consistently receive 2-3 referrals per day. What impact would that have on your business?

Before I share how to ask, lets recap on a few important matters:

1. Firstly you must become referrable

How do you know if you are referrable in the client's eyes? They return your calls, completed more than one transaction, no issues (they're happy), built likability, they have done what you said.

* Be likeable

* Be reliable and consistent

* The client considers you an expert and follows your advice

* They trust you to act in their best interest

* You have a track record of performance

* They consider you valuable resource, not a salesperson

* They know what types of prospects to refer and how to do it

2. Know when to ask

You must earn the referral before you can bring it up.

3. How to ask

The problem is that some people just won't refer no matter how happy they are! Whereas, some clients love to give referrals. So, how to you know the clients preference. That is the trick here - don't ask for referrals - ask if they'd like to discuss referrals. Here's my script:

"About 80% of our new clients come to us by referral. There's a lot of trust involved in what we do so it makes sense. I just wanted to bring this up and ask how you would like to deal with the topic of referrals? Some people never feel comfortable making referral under any circumstances - and that's fine. Whereas some people are very happy to refer, want to know how and appreciate friendly reminders. Are you happy to discuss this? I don't want to put you on the spot." [Then don't say anything!]

Tell them what sort of clients you are looking for (but you can help everyone and refer on), how to make a referral and reassure that confidentiality is an absolute.

4. How to follow up

•In conversation - e.g. I know we spoke about referrals - I'm finding lots of people don't realise how much money they can save switching to P&I

•Tell stories via email, blogs, etc. - about how you help helped people that have been referred to you

•Go out of your way to thank when you do get a referral - and let them know that they did a good thing

•Run thank you events for your top referrers

Long work is low value, commoditised work that is easily replaceable. An example of long work is competing on interest rates or trying to get a client to refinance for minimual gains.

Hard work is high value. Builds trust. Positions you as someone of value. It is impossible to commoditised. Examples of hard work are writing blogs, building relationships, looking for opportunities to add value. It is hard work because its not obvious work. Its not urgent work - so its difficult to have the discipline to do it anyway.

Free work involves things like writing blogs, doing podcasts, webinars, meeting with a prospective client.

Paid work is writing a loan or charging a fee for advice.

You must do a certain amount of free work. But be clear when the paid work kicks in. If you give all your advice away for free, no one will value it!

Here's a link to the podcast with Seth Godin - https://tim.blog/2018/11/01/seth-godin-this-is-marketing/

How you make the client feel is far more important that what you do. This sounds like a simple concept but once you understand it, it will change your business.

We have all had situations where we have killed ourselves to help a client, achieved a great outcome but then that client eventually leaves you, or doesn't refer or doesn't really care.

How you communicate what you will do or have done, the story you tell about your services, can have a dramatic difference to how the client feels.

I share a recent story about something that happened in my business today. We asked the client for more supporting documents and make the client "feel" like its a win.

Empathy is the feel to understanding this. You must put yourself in your clients shoes. But we are so busy in the day-to-day urgency of what we do, it is very hard to find to find the time and space to put ourselves in their clients shoes. To understand how it feels to be a first home buyer. To understand what it feels for your dream home to be on the line. To understand the pressures they have at work - and they don't need anymore pressure. We can all empathise. The challenge is having the discipline to make time to do it.

This will help you frame how best to communicate what you do (or have done) to make the client feel good. Feel valued. Feel looked after.

I also talk about how to communicate bad news in a way that neutralises any ill feelings the client has.

If you can nail this concept, you are guaranteed to build a very successful business.

If you are enjoying the podcast, please do share.

Every poor quality client robs you of the opportunity to win a target client - it's the silent cancer destroying many brokerage firms.

The wrong prospects:

•Take a lot more time to convert

•Don't follow instructions

•Have a low probability of settling e.g. change their mind, fail to be approved, etc.

•Are less loyal than target clients - because you don't really suit each-other.

•And worst of all, will probably refer you more non-target clients!

One poor quality client will typically eat the profit generated by 3 quality clients.

Saying no to a non-target lead can be difficult:

•We try and convenience ourselves and make excuses for their behavior

•How do you politely say "no, I don't want to deal with you because I think you're a time waster"? Its hard.

What to do:

•Clearly communicate what types of clients you want, what your core experience is, what you want to do, etc. Do that on your website, email signature, ads, social media, everywhere. The aim is to do two things: 1) attract target clients and 2) detract non-target clients. Number 2 is just as important as number 1.

•Pre-qualify. Get financial information upfront. You can then look for a few things; (1) does it meet credit parameters (2) is this my bread and butter - or is this something I know little about (3) do they need what I'm able to provide. At that point you might say to them; "I'm not the best person to help you but I know who is". Refer off non-target work to another broker.

•Introduce a fee. If you feel that it will take more time, they will ask more questions, they may not proceed, propose a fee for service. You can set the fee depending upon whether you actually want to win their business or not.

•Listen to your gut. I find that we make excuses for poor quality clients and focus on the possibility of winning them. But 99% of the time, our gut feeling is correct.

•If you settle a long for them, remove them from your marketing list e.g. delete postal, email and phone from your CRM so no one accidentally contacts them.

Warning: if the prospect as referred to you and the person or business that made the referral is important, bad luck. You have to deal with the prospect. But that's a training issue - you must educate your referrers about the types of clients your experience and business suits best.

There are two reasons to charge a fee:

•To make more profit; and/or

•To force the client to reconcile and appreciate the value of your service.

In my experience, the second reason is the most powerful and that is why you must consider charging your clients a fee in my opinion.

You must ask three questions:

•Does your client perceive that you offer value. Many clients will say yes, and thank you but when push comes to shove, how much to they really value what you do if its free?

•In the client's mind, do they believe that they can get the value your provide elsewhere - maybe for free? That is, if they think you only find the cheapest mortgage then maybe they think they can go online.

•If you answer the above two questions positively, why aren't you charging for the value you deliver?

The best way to deliver value is to service a niche. For example, Neel Love Curls in Fitzroy (Melb) only cuts hair. Only for people with curly hair. And he charges $135!

If commission change in the future then the only brokers that will continue to thrive are those that deliver value in the clients's eyes.

In my experience, it is near on impossible to get a client to truly value what you do without charging them a fee. The existence of a fee can dramatically change perceived value.

Plus changing a fee gets you to believe in yourself and the value that you deliver.

My challenge to you is to find something to charge for and pitch it to two clients in the next month.