Referrals Done Right: Making It Natural, Not Nerve-Wracking

A few weeks ago, I was at a team building off-site in the Poconos with Diversified, and while I’ve got a lot of thoughts on that event (more on that later!), what I want to dive into today is something that hit me during those two days: the power of personal referrals.

As we ended with breakfast on Friday morning, I had a conversation with a few members of our Georgia team and found that they had a long wait before their flight home.  Naturally, seeing someone in need, I jumped in with ideas on how to fill their downtime. One of my suggestions was a local winery that would be a nice stop for them on the way to the airport and it got me thinking—why did I refer and why this specific place?  It’s simple: two conditions were met. First, I internalized a need: Friends shared a problem with me and naturally, I wanted to help.  They didn’t know the area and what to do – I wanted to help.  Second, I’d had a great experience at the winery and was enthusiastic to share. 

Keys

This story brings up a key point about referrals in financial services. Clients don’t typically sit around and discuss their financial advisor (I know you are shocked).  They talk to each other about what is going on in their lives and sometimes share problems and concerns they are having.   They are happy to refer to their financial advisor when two things happen (1) they identify a problem that can be solved, and (2) they’ve had a truly positive experience working with you.

Let’s break this down. In my case, the need was very clear and my personal experience was so good that I even went out of my way to text directions and share pictures of my own visit.  I even suggested which wine flight to try at the tasting!

Let’s contrast that with the typical referral scenario for financial advisors where there is an uncomfortable, clunky, and scripted question about “knowing anyone needs financial advice”.  Clients might not immediately recognize how to bring up what you do, and they don’t want to sound like they’re selling something to their friends or family. The conversation goes nowhere. 

So, how do you get referrals that flow naturally, without the awkwardness?

Best Practices for Generating More Referrals

1. Focus on Solving Problems People won’t refer you unless they see how you can help. Make sure you’re crystal clear with clients about the types of problems you solve and who you solve them for – call them “referral seeds” and keep planting them.  When clients understand exactly what you do—and how you’ve solved specific problems for them—they’ll be better equipped to mention you to others when the same issues come up.
2. Create an Experience Worth Sharing Just as I had a great experience at the winery, you want to provide an experience for clients that goes beyond the expected. If your service is just “good enough,” clients won’t feel compelled to share it. Make every client interaction memorable and valuable. Exceptional service builds a story that clients will want to repeat.  If you don’t know what exceptional service looks like, ask your clients to describe a non-financial client service or interaction that they had in the past, and take notes on what appealed to them.  Dig deep to hear the words they use and the feelings that were created.
3. Make It Easy for Clients to Refer You Help your clients out by offering them the tools and language to make a referral. This could be through a simple referral card or digital tool, or by sharing stories of how you’ve helped others in similar situations. When a friend or colleague needs financial guidance, your client will make a mental note of the specific solutions you offer, and the conversation can unfold more naturally.
4. Stay Top of Mind Regular communication is key to staying at the forefront of your client’s thoughts when a referral opportunity arises. This could be through newsletters, personalized updates, or just checking in with them. If you fade into the background, it’s easy for clients to forget to mention you when someone they know needs help.
5. If you have to Ask, Go for Feedback, Not Referrals A great way to indirectly drive referrals is to ask your clients for feedback on your service. People are often happy to share their thoughts. If they respond positively, use that as a segue to say something like, “I’m glad to hear that. It’s what gets us up in the morning and we are always looking to help more and more people the same way.” It’s a softer, more organic approach that keeps things comfortable.

Referrals don’t have to feel forced or uncomfortable. By focusing on the problems you solve, planting referral seeds, and ensuring each client’s experience with you is exceptional, the process of generating referrals becomes much more natural. When clients are confident in both your value and their experience, they’ll be eager to share that with others—just like I was with that winery.

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