Published in ‘The NZ Mortgage Brokers Mag’ February 2003

In many instances it just doesn’t feel right to ask clients for referrals. You may have just signed them up for the biggest lump of debt that they will ever have in their lifetimes and now you hit them with “do you know anyone else…”

While this may well work some of the time, is there a better way? There are a number of alternate ways to ask that are known to work for various professions, a few of which are outlined in this article.

Separate the sale from the referral request.

Asking at the end of the appointment can be awkward and you are putting the client on the spot. They have not had time to think about it. So separate the two. Make the request for referrals a dedicated appointment in its own right i.e. ask for an appointment to just talk about referrals. This is a technique used very effectively by insurance and investment advisers.

This is how it works. Write them a letter clearly stating your intention, phone them a few days later and make a time. What do you write? Below is an example letter. Such a letter is known to remove the stress from clients expecting to be asked as the final sentence offers an ‘out’, which many appreciate. It also makes the job of asking less stressful.

Dear

When you want a good dentist you generally ask a friend who they use. This also applies to choosing a doctor, lawyer or architect. Choosing someone to help them secure the right mortgage is no different; in fact this is how I get the majority of my clients.

So… I would like to make a time to buy you a coffee to ask about any friends or relatives or work colleagues that I might be able to help.

I’ll give you a call in the next few days to set it up. BUT, if you would rather not, I will respect this and never ask you again.

Regards, …

Invite them to breakfast

This is a particularly worthwhile technique for centres of influence (more on these in future issues). Breakfast is a non-intrusive time of the day so most can make a breakfast meeting. Invite four clients or real estate agents or others of importance either to your office or to a café / restaurant (one with a separate room). The idea is not to lecture them but to have a casual chat about the mortgage market, trends, ways to structure mortgages to best effect and so on. This positions you as the expert. Ask them each to bring a friend or work colleague.

A ‘fireside chat’ among friends

This is exactly the same concept, but in a client’s home. Have a recent client ask three other couples to a chat over coffee at their place one evening with you as the speaker (although it is a low key chat, not a speech) about the same topic as for the breakfast. No hard sell is necessary. To get them there, call you talk something like “6 ways to save interest on your mortgage” or “Fixed, floating or revolving credit? How the right mix is critical to your future”

Give them the tools

You ask them to talk about you, but do you give them any ’silent salespeople’ to help with this. Send them three business cards and three brochures. Add a with compliments slip saying “For when you are talking to friends or work colleagues…”

Do this in between your quarterly newsletters and that makes 8 points of contact each year - a perfect level of contact and it also obeys the relationship-marketing rule of alternating selling and non-selling contact.

Friend get friend

Offer a reward for referring friend. This can be ongoing, but it could also be promoted as an annual campaign just as American Express and other institutions successfully undertake.

Rewards must be of a respectable value such that clients want to get them. A successful way to do this is to send them a list of options so that they tick the box and send it back in or call you. Work on about $25 and use your imagination with the rewards. Good options include two movie tickets, a bottle of spirits (avoid wine - its too clichéd) golf balls, a manicure or facial, four sun bed sessions (they are about $6-$7 each) and video shop vouchers. Sending the list has far more impact than just the old bottle of wine turning up.

And a final point on this - if you meet with the referred prospects and they do not go ahead with securing a mortgage through you, do you reward the referrer anyway? YES. Reward the behaviour you want repeated, which was to send you their friends. If a sale doesn’t result, that is not the fault of the referrer.

The bottom line is that while referrals can often just happen as a result of doing a good job for clients, working at them can accelerate the number. But like everything, there are right and wrong ways to do this.

Future issues - Why some newsletters help generate business and others are a complete waste of time and money. And an article on the single most effective (and least expensive) promotional item you could ever use.