Participants:
Julie Littlechild
Steve Wershing
John Anderson
Steve Wershing: Julie Littlechild: John Anderson: Julie Littlechild: John Anderson: Julie Littlechild: So, we got to work on a process to bring a bit of rigor to the discussion, and we began with this study of more than 600 advisors, and that’s really where John and the SEI team came in, raised their hands and said, look, we know this is important, we’ve been doing work in this area, and it felt like this great natural partnership to come together and get this research done. So, we went out, we conducted a very in-depth study among advisors, and out of that, created a framework for referrals with the elements of referability. Essentially, what we did was isolate the advisors who were achieving significant referral success, and then really dug into their businesses to understand what they were doing differently. Today, what we’re going to do is dig into some of that research, excited to get John’s perspective because of his depth of experience in working directly with advisors. I do want to jump to that, but just as I’m saying that, Steve, it might be helpful if you also gave us a little context on sort of the next phase to this research and really where you’re trying to get with it. Steve Wershing: But where this is going from here comes out of the idea that spawned this whole thing, which is, an advisor can go to a conference and sit through two or three or four sessions on marketing and how to attract more clients and how to get more referrals and those kinds of things, and they’re left with the thought of, first, which of these work, but more importantly, which of these should I do. Unfortunately, the best answer to that is, well, it kind of depends, because every advisor has a business that looks different, that’s built different, that’s at a different stage of development, so what will work really well for one will not necessarily be the optimal idea for another. I started thinking, wouldn’t it be cool if there was some kind of tool where you could answer a bunch of questions about your business and it would sort of deconstruct your practice and x-ray it according to all the elements of it, all of the aspects of it that lead to referrals, so that you could look at it and say, “Well, if I’m going to invest time or money in generating more referrals or generating more clients, what would give me the biggest payback? Where would be my biggest ROI?” And the assessment would say, “For you, Mr. Advisor, it would be over here, in this area. If you work on strengthening this, this is where you’re going to get the biggest leverage.” But a different advisor taking the same assessment would get a different result, saying, “Oh well, for you, Ms. Advisor, you’re better off focusing over here.” This study, this research will be the basis of a tool that I’m developing that SEI is helping to pilot and will initially be rolled out through them, called the Referability Index. So, an advisor will be able to sit down, answer 40 or 50 questions, and get that sort of x-ray of the business that will then give them some ideas on what they can do. If they’re going to focus on bringing in more referrals, what area will bring them the biggest payback. Julie Littlechild: John Anderson: The very end, the advisor starts looking down at his or her shoes, and kind of says, if there’s anybody that you know of that I could work with, and the client starts looking down at his or her shoes and says well I can’t think of anybody right now, it doesn’t really come to mind. You know, you take these great meetings and you kill them because the strategy is not really around asking for referrals. It’s more of a tactic, hey, I know I’m supposed to ask so I’d better put this on the agenda, or I’d better ask them at the end of the meeting. Or, I put something at the end of my email saying referrals are always welcome. I look at all of these little, one-off tactics and yet most of the advisors will tell you that they don’t work. They don’t work because it’s not necessarily part of an overall strategy. They don’t work because it’s not necessarily something that they’re comfortable with doing. What I was really intrigued about, the whole idea about the research, and around the tool, was how do we help advisors find a way to get business, business that they know that they deserve, the quality types of referrals that they want, but how do we get it in a way that’s going to build a strategy around it, and how do we do it in a way that’s going to work for them, not just everybody. Make it more of a unique interaction. That’s why I was really excited about this whole idea about creating this research and then a benchmarking tool around it. Julie Littlechild: Steve Wershing: Julie Littlechild: Steve Wershing: Julie Littlechild: Steve Wershing: John Anderson: Steve Wershing: Julie Littlechild: John Anderson: It really starts with, we all travel. I’m at 30, 40 conferences a year, you guys are out probably as much if not more than I am. If you think about what our lives look like, for me, it’s usually flying in the night before a conference, usually catching up with some of the clients we work with, maybe some of the SEI regional directors, and people like that, and of course it’s dinner, a glass of wine or two, and then without fail, I always try to make it a mission of mine to make sure that, usually around 5, 5:30 in the morning, I’m up flipping on the light switch in the hotel and I’m looking at that absolutely horrible—what I call the ugly look. It’s that every hotel seems to have six 100-watt light bulbs instead of one 60-watt. It’s that cold, harsh look. That hair all over the place, sleep lines, eyes all bloodshot. And it’s I’m going to go out for a run. But the point is, that is that cold, harsh look that we need to take a look at our own business. We need to say, “Am I referable?” If I look at the business that I have today, is it something that I would be proud referring if I was a client? I often tell a story about a firm that I worked with early on in my career here at SEI, and they were in the Midwest. As I talked to this gentleman on the phone, as I was coming to go see him, I was asking him a little bit about his business. And he kept telling me what a great financial planner he was. There’s nobody in the county that does as good a job financial planning as I do. There’s no one in the area that can really put all the pieces together as well as I do. And it sounded very impressive, and he said one of his challenges, of course, was he wasn’t getting the referrals. He wasn’t getting as much new business as he was looking for. So, as I pulled up to the office in this little, small town in the Midwest, I looked at a sign, let’s just make up a name. Let’s say his name was Mike Smith. And I pulled up to his office and big huge sign on the door said Mike Smith Investments. And I walked in the door and I look in the office and I see sales awards from annuity companies and from mutual fund families, and I see the investment rags that are all on the counters, and I see him walk out and he’s way overdressed, with gold chains and a flashy everything. I looked at him and I said, “If you’re telling me you’re a financial planner, if you’re telling me you’re a great financial planner, how come when I walk into the office, you’re screaming I’m going to get sold some investment products?” One of the things that I think we have to think about is whether we talk to our OSJ, whether we talk to key stakeholders in our business, whether we talk to people like the three of us, or somebody that can help you look at your business and say, number one, just visually, am I referable. Am I doing the things that I say that I am, or am I setting an image that looks maybe something completely different? Julie Littlechild: Steve Wershing: Julie Littlechild: John Anderson: There’s a couple of different ideas and things that I’ve seen people do. I’ll give you one of my favorite examples. A guy that I worked with in Kentucky, he said that his ideal type of client, he identified his ideal type of client is what he called “everyday Joe business owners”. Now everyday Joe business owners are the type of clients that own their business, but they’re still getting their hands dirty every day. They’re getting their hands dirty by working in the trade. They have some decent income coming in, but they still have the challenges of running a small business. When I look at this gentleman, who is focused on his everyday Joe business owner clients, he made sure that he created services that were in line with what a business owner would need. He made his marketing in line with what an everyday Joe business owner would look like. For example, he doesn’t hold his annual client appreciation, he doesn’t hold his client meetings at a country club or a wine tasting. He holds a barbecue at an industrial park. I love the idea of people who can find that ideal client, and then create a whole persona around who they are, the services they need, and the type of business that they want to work with, and those are the types of people that I first find are really, really growing and gaining more referrals today. Julie Littlechild: John Anderson: So, the more we get to know who that client is, and by giving him a name, it makes it even more real–the more we give that person a name and the more we communicate with that guy, we begin to use the same words. And there’s lots of different examples about how you can use their words with them and make it sound more natural. The client then comes back and says, “Well, you know me. Why would I bother working with anybody else? You’re the one that knows me, and by the way, I know a lot of people like me, so let’s introduce you to them, as well.” Steve Wershing: If you’ve got a large local employer and you have a lot of employees from that local employer as clients, knowing the actual terminology within the company for different things, for different benefits programs and different things that they have access to. I can’t emphasize—that’s so important that you bring up using the client’s words to better communicate with them. Julie Littlechild: John Anderson: Julie Littlechild: Steve Wershing: But you know, one of the things that I also think it points to is that, one of those findings from the study was that we asked first, how frequently do you talk about your target client and their unique needs, and then we asked who do you talk to about it. And of course, all of the predictable ones, prospects, and clients, and COI’s all came up, but the one thing that really surprised me was their staff. Your own internal staff, that that was a nice clear step-up from the lowest referred firms to the most referred firms, it was just a straight line. And part of that, I think, is not only having everybody in the office understand who you’re shooting for, but the people who talk to their staffs about these kinds of things are probably also people who just talk generally about who it is. That they talk to everybody about who it is. John Anderson: Steve Wershing: I think it’s just, we refer in the white paper, to people like Greg Liederman and other folks who’ve written about don’t put your clients first, put your staff first, because if you have a staff who is engaged and who feels like they’re part of the team and you’re taking care of them, are the ones who provide the kind of client experience that ends up attracting a lot more clients. So, this whole focus on staff, telling them who your target client is and what the needs are and providing them the additional training and all of those related topics, I think it becomes a powerful referral magnet, or the experience that they provide becomes a pretty powerful magnet. John Anderson: Steve Wershing: John Anderson: Steve Wershing: John Anderson: Steve Wershing: John Anderson: Steve Wershing: John Anderson: Steve Wershing: Well, John, thank you so much for joining us today. I hope we get to work on lots of things in the future. I think it’s been a great conversation and thank you for being a guest on the podcast. John Anderson: Steve Wershing: Julie Littlechild:
Welcome to Becoming Referable, the podcast that shows you how to become the kind of advisor people can’t stop talking about. I’m Steve Wershing, and on this episode, we’re joined by John Anderson, who’s Managing Director and Head of Practice Management Solutions for SEI Advisor Network, and who’s the co-author with Julie and me, of the new research paper, The Elements of Referability. We talk a little bit about our research project and some of the findings. Some findings that are not all that surprising, like, the people who tend to get the most referrals have a referral marketing system that they follow, and some surprising results, including the importance of talking about the description of your target client and their unique needs to your own staff. We cover a lot of the really interesting elements of this research paper, and also tell you how you can find a copy of one for yourself. Without any further introduction, let’s get to our conversation with John Anderson.
Well John, welcome, so happy to have you with us today.
Thank you, and thanks for having me along today.
Oh, it’s absolutely our pleasure. We’ve been really looking forward to the conversation today, I mean, for a whole variety of reasons. First of all, because we get to pick your brain, and that’s a good thing whenever we get that opportunity. But in particular, it’s also because we’re going to be sharing some information on a project that all three of us have really been working on, so Steve, at the Client Driven Practice, John, yourself and the SEI team, and myself have been partnering on what I think is just some interesting new research around referrals. I thought maybe I could start if it’s okay with you two and just give a little bit of context on the research, and then maybe we could dig in. Does that make sense?
That sounds good.
Okay, perfect. So, all of this began with some research that, quite some time ago, Steve and I had decided to do. And, you know, we like big goals, and we thought that it was time to take a more scientific approach to referrals. You know, we’ve been jointly doing a lot, in fact, if you look at what all three of us have been doing, I’ve been doing investor research on this, advisor research. Steve has been out there coaching on this, John, you’ve been writing about it and training about it. And we’ve got a lot of ideas, but we felt like what might be missing is the ability to go back to some data and say this is really what’s working. Because we hear a lot of tactics, and we know that some work for some advisors, others for other advisors, but there didn’t feel like there was a framework that advisors could go to and say, “I need to really take a hard look at my business, I need to understand where I am, and I need to understand which levers I can pull in order to increase referrals.” So, in a way, it’s hard to know where to start.
I would love to, and I just want to reinforce what you said, Julie, that there’s been a lot that all three of us, but a lot of other people, some of whom have been guests on this podcast, have worked on with referrals and have coached people on with referrals. Some of what you and I have talked about, and Julie, I know you’ve heard this before, there’s not that much actual rigor around what a lot of people have been recommending. There’s a lot of personal experience, but I’m sure you’ve heard this before, that the plural of anecdote is not data. It’s nice to actually have this sort of systematic study so now we’ve got some data that we can point to, and it reinforced some of the things that we thought and actually surprised us with a couple of other things that turned up in the data that we hadn’t anticipated, and things that did not materialize in the data that we had anticipated.
Great. So, John, I’m interested from your perspective, you see a lot of different ideas just like Steve said, we’re at conferences we hear these things all the time. What was it about kind of going out, doing the research, thinking about the tool that you thought might be helpful for advisors? Why do you think this is important for advisors today?
Well, I think, you know, when I look at the different conferences, and we all attend these conferences and we all hear these speakers, and most of them do a great job because it’s something that’s worked for them. But when I first started hearing about the idea of the referability index, and when I first started hearing the idea of creating this research, what really drew me to the whole conversation was trying to find a way to get away from just providing tactics. I think about the average advisor who conducts a great quarterly service meeting. You know, they talk about the plan, they talk about the investments, they talk about the wife and kids, they talk about the grandkids, they talk about all these great things, and this meeting is going really, really great until the very end.
Great points. You mentioned strategy, one of the things that really jumped out at me—there was a couple of things, in fairness, there was a lot, but just as you mentioned, just the notion of having a clearly defined strategy seemed to be one of those things that was common to advisors who had succeeded. And you say that out loud, it sounds a bit obvious, but the reality is that most of us, of course, don’t have a defined strategy. But the other thing is, just to hold out some hope, I think, is that 92% or so of advisors really felt that they were missing out on referral opportunities. So, most advisors are saying that there’s relationships and money that’s being left on the table, and if I could just get this strategy in place, we’d be in good shape. But it is confusing. So, John, where do you think advisors just start this process? How do they make it easy and just dip their toe in the water and get started?
And John, before you answer that, Julie can I jump in with something?
Of course you can. It’s your podcast too, Steve.
Oh that’s right, yes, sorry.
Anytime you want.
You know, to really build on that, I think that advisors sometimes may not realize, or lose sight of the idea that their clients want to help them. The primary reason for making a referral is to help the friend that they spot who’s got a challenge, or to help show their friend a really good experience. But at the same time, clients are more than willing to help out the advisor to do that, if we can just help them be more effective at it. What we had suspected, what we knew qualitatively from our own work, and John, I’m sure you’ve heard this from a lot of people, too, but now we’ve also verified in the data, is that the most powerful things are things that just help the client pursue that natural inclination that they have.
Yes, I agree. Making it easier for them.
Yes. Showing them how to do it better.
Yes. So, with all that said, then, where do you think we should start, or where can an advisor start?
Well, to me, more than anything else, it starts by looking in the mirror. I think we have to think about really, what kind of business we want to look like. How do we want to envision what that client sees. I think we have our own little biases with what we think we see, what we deliver, versus, what we actually do. In fact, I like to tell a story when I talk about referrals, something I’ve been talking about for a number of years.
Yes, and you do need to rely on somebody else sometimes, right? I mean, it’s hard to take that look at ourselves, and not because we’re even in denial, but it’s sometimes hard to see. It’s our baby, we’ve built it, so we could use that fresh set of eyes.
Not just a fresh set of eyes, but somebody who’s seen—you know, one of the things that professional marketers do that most of us tend not to do is competitor research. So, I think that’s one of the reasons why so many advisors claim something to be unique when it’s actually the same thing that most advisors talk about, because they don’t even look at the other advisors. So, not only somebody who’s an objective look from the outside, but somebody who also has talked with a lot of other advisors before, so it gives them a little bit of perspective. You know, your clients will tell you. You need to be getting your clients’ feedback. And you also need to recognize that your clients’ feedback is going to be skewed, and when you ask your clients “What’s unique about me?” they’re going to say a lot of the same things as other advisors say, so you need to have both the outside feedback as well as somebody who has that perspective.
Right. So, we talked about this framework, and I think this is a powerful outcome in the white paper, and the white paper will be available in the show notes, and I’d love to talk a bit about these components of the framework and maybe John, get some of your insight on it. The first part of the framework is, and anyone who’s been listening to this podcast will be quite familiar with this theme because it’s not the first time we’ve touched on it, but the notion that advisors really need to embrace and understand their target market. What are you seeing there? Do you have any good examples of advisors who are just doing this really well?
Absolutely. I think that, to me, is really the beginning stages, is I think about all the robo-advisors, I think about the virtual advisors that are out there, and when I look at the competition, typically they create more generalist advice for generalist type of clients. The more focused you can be on a target client, and looking at their unique needs, that’s where we really begin to separate ourselves out. And when I look at advisors that are doing that, I find that they create great relationships with their client. They’re creating great service for their client.
Yes. You know, you remind me of a concept that I’ve been noodling lately. I know this will sound a bit strange, but I took an acting class a while ago, because I thought it would help with performance and things. Anyway, that’s not the point of the story. But the concept that they talked about in acting is the through line. For an actor, it’s sort of the motivation, but it struck me as so relevant in our industry, the through line being sort of here’s the objective for my business, here are the needs of my clients, and how is that then articulated in everything that I do. You can see a clear line from start to finish, and so it’s not just about having that target, right? It’s about how it’s expressed in the communications, don’t you think?
Absolutely. I love to look at these personas and say, you know, I name them. I did a post a couple of years ago where we actually even brought out this little persona doll. We called him Gary. It was pretty funny. His name was Gary, but the whole thing we talked about is that we take this persona, we put it on the wall, and say, “What would Gary like to read if we deliver? What are the services that Gary would like, what would he value in what we deliver? What would he sound like? What would he talk like? What would he enjoy doing?”
You know, John, I think that’s such a critical idea about using the client’s words. One of the great things about getting client feedback is, not only do you find out what they really value and what they really find most important about what you do, and you may have that right and you may not. But just as important as finding out what’s most important to them is the way that they describe it, and the language that they use and the words that they use to describe what you do, and it’s knowing the client’s jargon.
And that ties in nicely to the next piece of the framework, because I think we often forget it’s not just about creating these personas but then talking about them. Now this, making this part of your conversation so whether that’s with clients or with team, so that everyone is aware of exactly who is right for your business, because it’s not a case of if we build it they will come. John, what do you think about how advisors can really get that message out?
You know, I think the challenge for most advisors today is that we remember our early days, when we were getting started in the business, and we wanted to talk to anybody that could fog a mirror. Anybody was our primary client. Anybody was our best prospect. As we evolve into running a more mature business, we’ve got to start thinking about focusing on a type of client, and understanding exactly. I think we’ve got to get away from the fear of—I’m not going to say alienating a prospect, because we really want to create a focus. We want to create a specialty, and the more we talk about a specific type of client or clients, and we understand their needs, allows us to express hey, here’s how we help people. Here’s how we help people just like you. And the more we can repeat how we help people like you, the more that client’s going to understand who the type of prospect is that I want to meet.
And Steve, you could probably talk to this, too. Just the idea of the team came up a few times in the research, which I thought was a really important finding, that we don’t talk enough about—you know, the importance of ensuring that the team is also embracing those personas, understands them, and that you’re regularly communicating with them about this issue as well.
Yeah. And you know, I think that there are two ramifications of doing that. One is that I’m surprised that you can walk into a lot of advisory firms these days and if you were to ask the receptionist who the target client is, that he or she would not know. If your front-line person doesn’t know, then they can’t be communicating it to anybody else, and so all of your advisory staff, all of your operations staff, everybody in the office really ought to know who it is. The more people that know it, the more that that description will get out there.
You know, that’s a great point, Steve, and I think that’s something that really needs to be kind of talked about a little bit more, is you know, you say that when you’re talking to your staff about the types of clients and things like that, they can be on the lookout. But I think it’s also part of a bigger issue, when you think about how you engage with your staff. When you engage with your staff, whether you’re providing them not only good case studies of the type of client you want to work with, but maybe case studies about the successes that you’ve had, the successes that you as a firm have had, they feel better about the firm that they’re a part of. They have the ability to identify the types of solutions that you can provide. I think the more time you spend talking to your staff about the solutions, about the types of clients, about the relationships that you’ve built, the more they become engaged and they become a bigger part of the firm, rather than just coming in, doing their job and then leaving.
And I think that’s a really important point. You know, one of the things that we found in the study, as well, is that interestingly, firms that provide their staffs more training also attract more referrals. And the interesting part of that was that the training on getting referrals, there weren’t that many firms that did that, and even training on customer service type things was more, but it was just generally providing training, because the highest levels of training were in things like financial planning topics and investment topics and technology.
Well, think about it. You’re one person. You’re telling your story. You’re identifying who your client is and you’re trying to get your message out to each person. You have a staff of six. Now you’ve got you and six other people who are telling your story, being engaged and getting out in the community and talking about the types of services that you can deliver, and the types of benefits. It’s really when you kind of picture yourself in that situation that you’re much more willing and able to give that referral. The more you can involve that staff member, it makes so much more sense to give them be a part of the firm than anything else.
And even more than that. Even more than being engaged in the strategy and being able to articulate who it is that they’re shooting for, I mean, if they get genuinely excited about working there, if they find it a fulfilling place to work and a rewarding place to work, then even if they don’t say anything specifically about it, it will come through in the client experience. Again, it’s a subliminal kind of magnet that gets people excited about working with you when all the people that you work with are excited about working there.
That’s great.
Well, you know there’s a lot more in this paper. It was a lot of fun to work with both of you on putting it together. So, John, this will be available by the time this airs from folks.
Yes. Basically, as we’re speaking right now, the paper is probably about 90% done. I think the last 10% is usually the editing, the fact checking, the graphics and all that sort of stuff. So, by the time that this podcast comes out, I’m pretty sure the paper will be complete and you’ll be able to put a link to it in the show notes, I’m assuming?
We will put it in the show notes so that people can go right to the SEI site, wherever it happens to be there, and be able to get it.
Yes. I’m very excited about it. I think the opportunity to really think about it, and as I think more and more, and we started the conversation with this and I think it’s a better way to end the conversation with it, too. The more we think about it, most people are taught tactics on referrals, and this is really all about building a strategy. Most people are given one or two tasks rather than building out the whole plan and I think that’s really going to be the differentiator for this paper, and hopefully for the future of this program.
Yes, and as sort of the reveal, here at the end I want to mention that this research is building toward the development of a tool that will enable an advisor to answer a bunch of questions that are similar to the ones that we asked in the research, but will give them a report about what they’re doing that helps them attract referrals, and what they need to do better to more effectively attract referrals. It’ll be called the Referability Index, and at least for three months after the initial release, it will be available only to advisors who engage with SEI to do their investment management.
Yeah, I could not be more excited about the tool, Steve. I think that the idea of giving yourself a score, a benchmark, and comparing yourself, and how do I compare, how do I get better at being referable, is a tool that I just can’t wait to see.
Me too. And it’s been great to work with all of you folks on this project, and I’m really excited that it’s going to be coming out through SEI. That will not be in the show notes for a while because it won’t be available for a while. We have a number of SEI advisors who are participating in the pilot, but it should be released in the fall, and as I said, the only place you’ll be able to get it is through SEI, by doing business with SEI. And I think that working with SEI is also a great way of making yourself more referable, so you can focus on all these things that we found in the research that you need to be focusing on to bring in more folks.
Thank you. Thanks to both you and Julie. I really appreciate the good working relationship we’ve had for years, and I’m really looking forward to continuing on.
Okay. Take care, John. Thanks.
Hi, it’s Julie again. It was great to have you with us on Becoming Referable. If you like what you’ve been hearing, please do us a favor and rate us on iTunes. It really does help. You can get all the links, show notes and other tidbits from these episodes at BecomingReferable.com. You can also get our free report, Three Referral Myths That Limit Your Growth, and connect with our blogs and other resources. Thanks so much for joining us.