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An Art of Referencing / Collecting Referrals

Most financial advisors find it difficult to generate consistent leads. The primary reason for this is that they’re not using the correct strategies.

Financial advisors might see some results using these archaic tactics, but they’re not cost or time efficient. If you were to survey top financial advisors, not one of them will tell you that their primary lead-generation strategy is referencing/collecting referrals. This strategy has great potential, but should be the preferred as primary method of generating leads.

sales referral takes place when an existing customer provides the name and contact information of a prospect to his sales rep. Financial Planners/ advisors usually ask for referrals following a successful sale and at various points during a relationship with a customer.

Sales referrals are one of the best ways to get new outbound leads and potential clients. The lead comes from someone that you already know rapport with. Some of this rapport and trust is transferred to the new relationship, allowing you to close the deal faster.

Referral Marketing generates 3-5x higher conversion rates than any other channel. Referred customers bring you 25% higher profit margin. A referred customer is 18% more loyal than a customer acquired by other means. Referred customers are 4 times more likely to refer more customers to your brand.

Referral marketing is the method of promoting products or services to new customers through referrals, usually word of mouth. Such referrals often happen spontaneously but businesses can influence this through appropriate strategies.


  1. Referral-based customers are better matched. The referred customers are likely interacting with people similar to themselves.
  2. Existing customers know the purpose of marketing and understand the need for potential clients. The referrers can measure a good fit between the two and the well-matched customers can help the company produce more profits at a lower cost.
  3. The value and contribution of customers acquired through referral campaigns are higher than those of non-referred customers.
  4. Referral programs are a good method to define consumer satisfaction. If comparatively few consumers are willing to act as referrers, a company’s customer satisfaction may be low.
  5. Referral programs help the company establish long-term relations with customers. The company can match motivations with consumer expectations and raise the effectiveness of market programmes. Referral reward programs can also be regarded as a tool for retaining current customers.
  6. This method is very cost effective as well as rewarding in terms of conversions.

7 Magical Steps for Collecting and Generating Business from Referrals

Collecting referrals and generating business, looks very easy process at the initial level however it has its own complexities in terms of getting quality referrals from the existing clients to converting these referrals to new acquired business.

Referral collection is a scientific approach and involves various steps that ensure continues flow of quality leads for new business and client acquisition. In this article, we have mentioned seven tried and tested steps for referral collection.

If you implement these steps in a given sequence then you will never get scarcity of leads for your business.

7 magical steps for reference collection and generating business as follows-

  1. Build trust with existing clients with loyalty building programs- This is a very important and basic step of your referral collection activity. There are various occasions, you can ask referrals from your clients, however satisfied and happy clients can only be helpful to become source of your referral collection activity. In order to build trust with the clients, you will have to conduct innovative programs that may help to build client loyalty. These program can be direct or indirect activity which contribute value to their lives. For example- Financial awareness programs, Health awareness programs
  2. Select the segments and also set goals for collecting referrals– Before asking for referral you should be very sure about the segment which you want to work. Many a time it has been observed that if you do not ask for the right segment of prospect, the client may offer you any prospect which can be of no use. This steps gives you clarity about quality and quantity you expect from your referral activity.
  3. Indentify C of I / Influential existing clients- Centre of Influence are those clients who are the major source of contributing references for your organisation. They are your real brand ambassadors and help you to promote your brand as well as introduce to different types of their acquaintances. This step of Identifying and preparing the list of Cof I for referrals saves your valuable time and energy for collecting references.
  4. Offer benefits/ activities to existing clients/C of I as promotional example of your approach- Your existing client and even some of C of I may be hesitant to give you referrals for doing business because of many reasons. However if you approach them with some helpful activity or offer the benefits of your services, which you would like to showcase to their contacts, then chances getting resistance is less and in return you will win many number of their contacts.
  5. Use question trigger sheet for collecting optimum references- It is important to ask only those referrals which you feel can be rewarding as you have decided in step 2. You need to prepare innovative question trigger sheet to help your Cof I to garner only those contacts which you are looking for. In order to prepare trigger questions you need to identify specific group (Social, family, school, college, business) and their common factors. For example- If you want to go with family vacation which two families would you like to invite with you on vocation
  6. Prepare SOPs/ process/steps for acquiring new clients- Once you receive the contact through referrals, prepare standard operating process for converting referral into business. This step needs a proper attention, where you take the leads from various buckets right from prospecting to closing.
  7. Execute above steps and conduct periodic reviews- Periodic review and measurement is the essence for making these 6 steps to work efficiently. This step will surely help you to identify gaps and areas of improvements so that you can overcome gaps and improve the process for generating continuous and qualitative results.

Follow these magical steps and see the increase in the productivity of your business through increased and continuous business leads with increased conversion into new business.

About us:

Sparrow’s Sprout is a training institute for business solutions. We work extensively in the area of financial services. We help Financial Advisors, Planner and Wealth management firm to build their business.

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