Here’s a clever marketing trick to get you more referrals

NextWealth’s most recent Financial Advice Business Benchmark report is pretty stark about the power of referrals for growing a business.

Referrals make up approximately 49% of new business. Add 16% of referrals from professional third parties and, in total, they make up around two-thirds of new business for advisers.

This is not new news. Industry voices have long espoused the need for advisers to develop a good referral scheme to grow their firms.

Simply asking existing clients to refer us can work. But are there other ways?

The 95-5 rule states 95% of your target market isn’t buying at any one time. No matter how good your marketing is, they’re just not ready

‘Category entry points’ (CEP) is fancy marketing jargon for a life event or trigger for a consumer to act and use a service or buy a product.

Understanding what events trigger a need for advice can help you develop and position content to increase referrals. Some that come to mind for potential clients include:

• A large inheritance
• Selling a business
• A new child – whether parents planning for their future or grandparents thinking about estate planning
• Planning for retirement. (It is trickier to narrow down the event that nudges people to think about it: a friend or relative retiring, maybe?)

This isn’t an exhaustive list but you get the idea. Also, if you’re an adviser with a particular target audience – say you work with dentists, divorcees or entrepreneurs (or recently divorced dentists setting up a new dental practice) – they will have unique CEPs.

Yes, these events don’t happen every day. But, if we consider your network of existing clients, there is a high chance they know a potential referral experiencing one of these events at any time.

95-5 rule

The fact CEPs don’t happen every day brings us to another fundamental rule in marketing – the 95-5 rule.

This rule states that 95% of your target market isn’t buying at any one time. No matter how good your service, product or marketing is, they are just not ready.

The thing to remember when writing this content is you are positioning it to be passed on

It’s not actually a hard rule, it’s a guide that varies for industries and B2B versus B2C, but it nurtures a fundamental understanding of marketing to prospects.

A crucial part of marketing is ensuring your business is at the forefront of a potential client’s mind even when they’re out of market. You can’t sell to people who aren’t in the market to buy.

Have you ever bought a car after seeing a good car advert? I doubt it.

But a prime, personal example of the 95-5 rule is the very memorable Jeremy Allen White Calvin Klein advert and the BRLO spoof of it, which is even more so. Neither ad made me buy those products in the moments following them – however, the next time I’m in the place to buy underwear, beer or a white vest, both brands are at the forefront of my mind.

These ads are a year old, yet I still remember them, the brand and their associated products.

I doubt many people wake up one day and just decide they need financial advice. It will be a growing thought in their mind, with the decision to find an adviser often triggered by an event – a CEP.

What can advisers do?

So, we know a large swathe of the market isn’t quite ready but could be knowingly (or unknowingly) about to meet a CEP.

Periodically reiterating how you can help clients, even to your existing clients, will open opportunities for referrals, enabling you to grow your business

Therefore, consistently ensuring your existing clients know how you can benefit people around CEPs means that, when an acquaintance hits one of these events, you’ve increased the chance of a referral by ensuring your brand, expertise and experience are at the forefront of the mind.

A broad stroke process would be to:

1. Pick a CEP you have experience advising around. Say, you’re an adviser to many young families, so a couple has a new child.
2. Establish when this event happens most in a year. It’s not always necessary, but it justifies why you’re talking about the topic. For births in the UK, it’s September.
3. Produce content, whether newsletter or social media posts, focused on the benefits of advice around this event. So, for births, you could focus on the benefits of starting early when it comes to investing and saving to give the child funds for a house deposit or university fees.
4. To make the content resonate, include a case study of some financial planning you’ve done around the CEP. I’d even be cheeky and include a line like “Family XYZ was referred to us by an existing client after the arrival of their first child….”
5. When you distribute the content, you can again nudge the referral with a line like, “If you’re experiencing this or know someone who is, we can help.”
6. Periodically rotate through different CEPs to increase the opportunity for referrals.

The thing to remember when writing this content is you are positioning it to be passed on. It must be relevant to the reader but illuminate a CEP that a friend or family member is experiencing.

You may have thought my earlier example of a cavorting Jeremy Allen White a bit leftfield. Still, it fits the same premise – the truth is, I wasn’t the target audience.

That ad was selling men’s underwear by targeting women. Why? Because in many heterosexual relationships, the woman often buys their partner’s underwear or will refer the partner to what brand they should be buying.

Periodically reiterating how you can help clients, even to your existing clients, will open opportunities for referrals, enabling you to grow your business.

Harry Webster is head of marketing at P1 Investment Services