The Power of Introductions

The following is based on one of The Covenant Group’s clients. All of the names and telling details have been changed.

Article by Norm Trainor.

Andre Lamonte thought finding new clients would get easier after twenty years in the business. Unfortunately, his pool of prospects was always too small and acquiring clients proved to be as challenging as ever.

After seven years as an advertising executive, Andre decided to change careers and become a financial advisor. He was inspired by Stan, one of his neighbors, a man in his late 50s who’d been in the business for twenty-five years and enjoyed a comfortable lifestyle, working four-day weeks and taking three months off each year to travel to Europe. Stan had a great passion for the business and instilled that in Andre. He told Andre that if he put in ten years of hard work, learned the business, and built up a clientele, he’d have it made.

“Stan was half right,” Andre said, “the first ten years were a slog. I worked my tail off. Unfortunately, the second ten years weren’t any better. And frankly, I don’t see what’s going to change.”

I.e. asked Andre what he thought Stan’s secret had been.

“You know, I wish I knew. Unfortunately, he passed away ten years ago, so I was never able to ask him. But I think it was a different era. The business is so complicated these days; we’re inundated with new products almost every day, consumers are incredibly educated, we’re constantly dealing with compliance issues and contracts and continuing education... Things were simpler in Stan’s day. I don’t think advisors will ever get it that easy again.”

“I can’t argue with you that the business is complicated and increasingly challenging, but I don’t think it’s any less rewarding. In fact, I would venture to say that if Stan were in your shoes today, he’d be enjoying a lifestyle similar to the one he had twenty years ago.”

A look of doubt crossed Andre’s face.

“Andre,” I said, “I hear a lot of advisors tell me how many years they’ve been in the business and where they think they should be because of their experience and longevity, but time in the business has less to do with your stage than we might think. We have to avoid an entitlement mentality where we think things are due to us simply because we’ve hung around. Career stages are earned, and clearly, Stan earned his. Another advisor once told me he’d been in the business thirty years but that it was like he’d had one year’s experience thirty times over.”

Andre laughed and said that it probably described him too.

“The definition of insanity,” I said, “is doing the same thing over and over again and expecting a different result. So we need to look at your business and see where the opportunities are for changing behaviours. If meeting high-quality prospects is your challenge, how are you currently going about finding prospects?”

“Mostly through my existing clientele.”

“That’s certainly your best source of prospects, but what’s your process for that? Do you always ask for referrals or introductions?”

“Actually, only rarely. Usually, I’ll wait until one of my clients offers to introduce me to an associate or friend of theirs.”

“One distinguishing characteristic of successful advisors,” I said, “is the degree to which they are proactive about growing their business. Too many advisors are reactive or opportunistic. Sun Tsu said, ‘He who surrenders the initiative loses; he who maintains the initiative wins.’ To be at the level you want to be at, to enjoy the lifestyle that Stan enjoyed, you have to take the initiative around obtaining introductions.”

Andre said he was never comfortable with the idea of asking all his clients to give him lists of names. “It seems too hard-sell for me.”

“Andre,” I said, “salespeople stop selling the moment they come across an objection with which they agree. So you have to overcome your own resistance to asking for introductions. I know many of us were taught to ask our clients for referrals. But there’s a difference between referrals and introductions. A referral is simply a name and number, but with an introduction, you’re asking your client to introduce you to their friend or associate physically. With a referral, we don’t take full advantage of the client’s influence on their friend, and that’s probably where a lot of the uncomfortableness comes from. We’re never sure how the referral is going to respond when we call on them? Did our client mention we were going to call? What did they say? How did they position us? But with an introduction, you are there in person, and you can see for yourself the power of your client’s influence on their friend.”

“I certainly feel more comfortable about meeting prospects in person than calling on them when I’m not sure what their expectations are, but most of the time, it’s not easy or feasible to arrange a personal introduction,” Andre said.

“You’re right. One of the difficulties with introductions is that you are asking your client to arrange a meeting between three people — three busy people, and we all know that can be a challenge, but if you’re creative, it can be done quite easily. Let me tell you about Harry Shepler, a friend and advisor I’ve worked with.

“Harry Shepler is one of the best examples of someone who’s taken the initiative around gaining introductions. Harry lives in a small community in the North Eastern US. Every year in November, Harry determines how many introductions he will get in the next calendar year. And then, he develops and implements a yearlong plan to ensure he meets his target.

Last year, Harry’s objective was 80 introductions. Given a 40-week work year that translated into two introductions per week. And to ensure that he generated introductions at that rate, Harry devised a system that involved three major campaigns. Harry planned to run six pitching and to put clinics that would result in thirty introductions, six concept lunches in partnership with a CPA firm that would generate another thirty. The remaining twenty would come from seasons tickets to the local hockey game.

In each of these campaigns, the challenge of arranging introductions is solved. For each pitching and putting clinic, Harry usually invites six clients and asks them to bring a friend or associate. He follows the same formula with the concept of lunches. He has someone in his office arrange all the logistics. So at each event, Harry meets a new group of prospects and is introduced to them personally by his clients.

As Harry conducts annual reviews throughout the year, he’ll close the meetings by bringing out two tickets to a hockey game and say, ‘I’d like to take you to a hockey game.’ Then he hands over both tickets to the client and adds, ‘One of these tickets is for you, and the other is for you to bring a friend, someone who enjoys hockey, and someone who you feel would benefit from meeting me. I’ve got another two tickets for myself and for someone who I think will benefit from meeting you.”

Last year Harry’s system-generated incremental revenue of 300K.

Inspired by Harry’s story, Andre spent the next few weeks developing his own system for gaining introductions. As an avid golfer, Andre loved the idea of pitching and putting clinics and so started running a series of those throughout the summer. He also began working with an accountant friend of his to run concept lunches on a bi-monthly basis. Within a few months, Andre’s system was paying off. He’d gained over a dozen new clients this way, and his revenue was up more than 15% over the year before.”

Lessons Learned

Andre learned three important lessons about obtaining introductions:

• An introduction, where your client personally introduces you to their friend or associate, is significantly more powerful than a referral, where your client gives you someone’s name and number.
• Being opportunistic or reactive about getting introductions will not have much impact on your business. Successful advisors are proactive and develop an effective system to ensure they are meeting high-quality prospects regularly.
• Because introductions are hard to arrange, it’s best to organize events, such as concept lunches and pitching and putting clinics, to which you can invite your clients and their friends.

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The Covenant Group is referred to by many as the place entrepreneurs go to become Business Builders. They are considered to be thought leaders and have authored the best-selling books, The 8 Best Practices of High-Performing Salespeople, The Entrepreneurial Journey, and The Business Builder.