Experiencing a referral drought? Try these 7 tips

Director of Discovery Finance Group, Joshua Vecchio has written over $250m, using techniques and tips being shared on his website Top Broker.

I think we can all agree a warm lead from a referrer is much more likely to convert than a cold lead from the street? According to research by Macquarie Bank they found that Financial Planners who had fewer and deeper relationships were able to increase the return on effort and obtain more qualified leads, with a higher conversion rate and overall generated much more revenue across their businesses – but do all brokers take this approach?

I’ve been contacted by a few different brokers over the past few weeks who have said they have contacted and met with countless Accountants and Financial Planning referrers but are yet to receive a lead – want to know why?

Here are my top 7 steps to creating deep and meaningful relationships with referrers to make it rain leads from referrers.

1. Identify & research potential referrers 
This can be as simple as going on Google Maps, typing in “Accountant” in your suburb or finding an area within 5km of your office and going through each business that is listed – but this isn’t good enough. You need to go through each of their websites and LinkedIn profiles to get an understanding of their business – do they work in the same specialty as you? Do they have a similar target client base? Does their business have similar values as yours?

These are all important points to understand and ensure you are compatible to work together going forward, there isn’t much point targeting a referrer that operates in a completely different space (e.g. they are a financial planner that specialises in retirees with no debt, and you are trying to sell them home loans) to you as you are going to add very little value to their client base.

2. Be prepared & your value add 
As the Macquarie article identifies like any relationship, it’s important to understand in order to be understood. As part of the research you need to focus on really understanding your potential referral partner’s business can you explain what they do day-to-day and summarise their value proposition. How does your business align with theirs and where are you going to add value? Are they a similar age or of a similar background – It is easy to build a strong and sustainable relationship with someone you have something in common with.

It is imperative that before asking for business you are offering something. 

You need to be prepared before even meeting the potential referrer. Understand their business completely and know where and how you can help them and their clients or improve their value offering.

3. Arrange a catch up, and listen 
Once you’ve identified the potential referrer arrange a catch up on the premise that you will be adding incredible value to their business – as you have identified in the previous steps. Now the important part when you meet with them is to briefly explain your business but also make it known that you have spent time getting to understand theirs – and continue to ask them questions about their business during the appointment.

Remember you have two ears and one mouth, and you need to use them in that proportion. The more that you listen the more that you will learn. Ask them open questions, show interest in their business (also using the research you have done on them and their clients) and encourage them to talk. If you listen to their pain points you might identify opportunities to help them and their clients.

4. Keep your word
This is my mantra – If you say you will do it, then it must be done. This is not just a question of integrity it is critical not only for you but your referrers businesses because by proxy if they are referring you to their clients you are also representing them.

You need to keep your work with referrers because if you say that you are going to do something, you need to do it to slowly build the trust of the referrers. And equally if you can’t help or you don’t know if you can help the potential referrer or their clients don’t string them along: be honest and say so. People will respect you more for this and, when you say yes I can help you they believe you and they will trust you.

5. Give consistently, receive occasionally
A great referral relationship is mutually beneficial. As covered in points 1, 2 and 3 you need to have a complete understanding of your referrers business their customers and identify ways you can add value to their client base – can you connect them with other people that can add value (think home and contents insurance, depreciation report specialists, etc), are you able to help with complimentary valuations to get an understanding of their properties value or look at alternate structuring strategies that the customers banks wouldn’t understand (cross collatoralisation, guarantees from businesses, etc)?

You need to go into the relationship wanting to share information and wanting to offer something before expecting to receive a tidal wave of leads, but from my experience in doing this provokes the law of reciprocity where in effect if you do something nice or add value to your referrers, and truly add value they will want to do something nice or add value by sending you referrals to you in return.

6. Don’t waste time, be prepared to move on
As the Macquarie article identifies and we all know from experience – don’t ever waste your referral partners time. Referral relationships are one of the most common ways businesses can work together for mutual business benefit – but if there is a gap between you and the referrer that can’t be bridged you need to move on.

In life the reality is you get along really well with some people, and others not so much. Don’t take it personally or get down about it, just understand that you can’t have 100% of every referral relationship every time, so accept this and move onto the next referrer where you can add more value and they appreciate and understand your offering (and vice versa)!

7. SINGLE MOST IMPORTANT FACTOR – Keep in touch
This is the single most critical factor – this is how you make it rain.

You can burn hundreds of thousands of hours going out and meeting new referrers, researching their businesses, showing how you add value but if you go out and meet them once and never call again THERE WAS COMPLETELY NO POINT seeing them in the first place – you need to keep in touch and stay front of mind.

I remember reading about the slap principle which said it takes more than 5 interactions with someone to build trust and create rapport for them to trust you and be willing to work with you – and ultimately I hope you are taking a long term view with your business – so you need to take this on board and integrate a referrer follow up process to keep in touch and build trust to create a deep and meaningful referral relationships.

Time for action, so this week go out there and if you have existing referrers you have visited in the past year pick up the phone and touch base with them. See how they have been going, give them an update on the lending market (which is very topical at the moment with APRA, etc) and listen to them about their struggles and pain points where you can help.

This article originally appeared on Top Broker, a growing online space where tips and strategies are shared by Australia's top mortgage brokers.