"I've referred three great clients to Mary Smith because she's a topnotch CPA. All I've gotten in return is a thank you email. What am I doing wrong?” We hear this refrain frequently from advisors who mistakenly expect referrals from another advisor who is a well-recognized expert—a Center of Influence.
Why are so many advisors mistaken?
In some of our previous blog posts, we have discussed how working with your centers of influence (COI) is a vital part of your marketing strategy and how incorporating them into your efforts, if done correctly, can pay off handsomely. That said, below we outline some of the pitfalls that lead to statements like the one in the opening of this blog and how to avoid them.
First, advisors become centers of influence because they have a recognized expertise; an estate planning attorney specializing in planning for business owners for example. They receive referrals from Joe Advisor because they benefit Joe and Joe’s clients. Of course, advisors like Joe want their “great clients” to receive the best possible professional advice. But expecting to receive, at some point, a return referral is unrealistic unless Joe has educated the COI of his unique expertise.
As a recognized expert, that estate planning attorney receives referrals from other advisors on a continual basis. That's how COIs develop their businesses. That's the reason they become recognized experts. Because most of the clients these COIs represent are referral-based, the COI won’t re-refer them to other advisors who are seen as the same or similar to the referring advisor. Why would they when the original referring advisor maintains the client relationship?
Second, COIs such as an experienced business CPA, have established relationships with expert insurance advisors, financial planners, and attorneys. They know and trust these other experts so refer their clients to them.
Unless you offer something that other existing expert advisors do not, you're unlikely to get a return referral from a COI.
Third, having lunches, breakfasts and networking meetings with COIs is usually unproductive. Scheduling one lunch a week means you spend 8 to 10 hours per month trying to develop relationships with COIs. We believe that the meal approach is usually a wasted effort that leads only to an expanding waistline. We suggest that in lieu of, or in conjunction with, a lunch use the time to share a short presentation and explain what sets you apart as well as what is in it for the COI (real billable work) who refers you business.
That said, no, marketing to COIs is not a waste of your time. Referring them business in the hopes of getting something more than a, “thank you,” may be. Presenting yourself as a “better version” of the advisors who referred them a majority of their client base, may be as well. Networking for the sake of networking, definitely is. What should you do?
You should become a center of influence.
Rather than sending clients to COIs hoping for something in return, spend your time focusing on your key differentiators. This means your recognized expertise will attract other advisors, including COIs, as well as clients to your practice. We emphasize the word "recognized" as well as the word "expert." It does no good to be an expert in a field if no one knows about it or knows about you.
Takeaway: Don't focus on referring clients to centers of influence; become one.