When it comes to getting referrals, advisors have a problem. Clients think you have unlimited capacity. Because your door is always open, there’s no sense of urgency to send people in your direction. How can you create exclusivity in your practice?
My wife and I have met many interesting people through our volunteer activities in the community. One evening at an event, a property developer made an interesting statement. “My cardiologist is so good; I can never get in to see him!” The first thought that crossed my mind was: “What’s the point in having a doctor if you can’t get them when you need them?” I later realized the doctor would be beside him if he was in serious trouble and he was the best. The problem was he was so busy you couldn’t see him anytime you wanted. Why? Because he was in demand.
In the same town a fellow who owned a financial planning firm explained how he positions exclusivity to get referrals for his practice. Here’s his method in step-by-step forma:
Step One: Determine what constitutes an ideal client based on the clients currently within your practice. They are likely large clients who value your advice and follow it.
Step Two: Determine how many similar clients you could add under three strict criteria. The upper limit is the point when your service model would collapse. The three criteria are:
- These are in addition to your current clients. You aren’t displacing any.
- Everyone gets the same level of service. Noone gets downgraded.
- You aren’t adding any additional staff.
Step Three: Now you have a number. It’s likely under ten because those criteria impose real constraints. Let’s assume the number is seven. Build that number into your current year business plan.
Step Four: Approach your best clients and explain the following:
“I’ve done a business plan for (year). I’ve determined I can add seven new relationships similar to yours to my practice. Before I add them in the traditional way, is there anyone you would like to recommend to be one of those seven new relationships?” Stop talking.
Let us pause to review what happened.
- Your client likes you a lot and is happy with the relationship.
- Why? Because you give excellent service.
- Now they realize how this is possible. You have constraints on the size of your business.
- There are seven slots open.
- “New issue syndrome” develops. There are seven slots available. You offered them one. They want two. Not a bad thing.
Step Five: They approach a friend telling them to decide now because they assume the slots will go quickly.
Step Six: They might ask you if the slots are filled. They may then approach their friend saying “Four slots are gone. Have you made your mind up yet?”
You Are Ethical
You might think you can keep adding clients beyond the upper threshold. It sounds good because it’s a bad idea. Word gets around. You can come across as a liar misleading people.
Once the slots are filled, here’s what you might do. Something changes. You give away a few smaller accounts to another advisor. You hire additional staff. You can go back to clients and explain something changed, allowing you additional capacity. You raise the upper limit by a couple of slots.
Can you see this strategy working for your practice?