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Practice Management

Advisors can establish direct contact through fun and social client-referral events.

This Practice Management article is intended for financial advisors only (registered representatives of broker dealers or associated persons of Registered Investment Advisors).

It’s not enough to settle for referred leads. With referred leads, you may emerge from an appointment with 10 names and phone numbers, and not set a single appointment. But, if you emerge with three to four quality connections, you’re more likely to set all four meetings and sell them all.

This article covers some good examples of how your colleagues are using referral events to produce great quality introductions that result in new clients. I’m not talking about client appreciation events, but referral events. There is a big difference. You host a client appreciation event to show your appreciation to your clients. You don’t ask them to bring friends. Doing that can diminish the appreciation value.

A referral event is an overt way of getting your clients to introduce you to their friends. There’s a client appreciation component to this, but everything is above board. Your client knows you are hosting a fun event to meet potential prospects.

If you are trying to attract high-net-worth and wealthy clients, you must make referral events a part of your marketing mix. Many affluent clients don’t want their first encounter with you to be a meeting where they reveal their personal financial information or drag along piles of financial statements. They’re thinking, “My friend George likes and trusts his advisors. I’d like to see how I feel about them.“

I teach a client-centered approach to referrals. We don’t ask for referrals based on “how I get paid” or to help us build our business. We ask for referrals as a way to bring our important work to others. Here’s a sample conversation:

You: Bob, I’m calling today because I wanted to let you know about a fun event I’m planning for my clients and their guests. We’ve reserved a special room at Chez Fancy and we’re calling it a Chef’s Table. The chef of Chez Fancy has agreed to come out of the kitchen and talk to us about the meals he and his staff will be preparing for us. Those who wish to take a brief tour of the kitchen will be welcome to do so. It should be a pretty special event, don’t you think?

Bob: My wife would love this...and so would I for that matter. How do I sign up?

You Well, here’s the deal. What I’m trying to accomplish with this event is twofold. First, I want to treat some of my select clients to a very special evening. And second, I want to get introduced to people who are not yet clients, but should probably know about the work I do. It’s going to be a low-key event. No sales pitch. It’s just a way to meet some new people—and let them meet me—in a social setting. Does that make sense?

Bob: So you want me to bring a guest, a couple I assume, who might enjoy the event and want to meet you?

You: That’s it. Is this something you and Helen Ann would like to do? If so, who do you think you should invite?

It’s as simple as that. While you can print up nice invitations to this event, you’ll have more success if you also speak to your clients over the phone. If you’re inviting your A clients, don’t delegate this call to an assistant!

Fun Field Trips 
The Chef’s Table is the kind of event that clients like and feel comfortable inviting guests to. An ideal number of people is eight to 12 because you only want one table so that you can connect with everyone at it. This event is simple to organize. You will probably need a high-end restaurant, so your investment per guest will likely approach $60 to $90 per person (depending on the amount of alcohol consumed).

I know one advisor who hosts two or three golf lessons every summer. He hires a golf pro to teach a lesson and hang out with his clients and prospects. He serves food and drink. The event can accommodate about 12 to 18. Remember, you want to make good connections. If you have too many people, your connections will be weaker. Your total cost per person—depending on food and drink—should range from $20 to $30 per person. You can up the “value” by giving out sleeves of golf balls and other items.

David, an advisor in Latham, New York, hosts a one-day junket at a local ski resort. Clients pay for the trip by inviting guests. The out-of-pocket cost is about $100 per person (for bus and lift tickets). Each client can buy down their cost with referrals. If they provide a total of five referrals, their trip is free. A referral who actually comes on the trip is worth three referrals who don’t attend. David has been doing this for years. This trip sets up a year’s worth of client acquisition activity.

Don, who works out of Toledo, Ohio, arranges for a two-day theater trip via motor coach. Don arranges the bus, theater tickets, hotel and dinner—about $400 per person. His clients and their guests pay their own way. He just organizes the trip and acquires several new, very affluent, clients this way every year.

Valerie, an advisor in Calgary, Alberta, recently hosted a Wii party for clients and their guests. The idea for this event came from a special events planner. Valerie had 25 guests in a party room at a local pub. They had 10 Wii stations—playing games like tennis, bowling, golf, baseball, etc. The guests remarked that this was the first time they could play Wii without their children making fun of them. Valerie got seven new clients from this event.

Jeff, in Columbus, Ohio, hosts the Event of the Year at his home. He gets a big tent, hires a band and entertainers. His clients bring guests, many of whom turn into clients. With up to 400 people, this goes against my belief that events should be small because they create better connections and are easier to plan and host. To me this is more of a client appreciation event. But Jeff loves it and says it’s worth the effort.

Simple but Classy
I know a producer who uses his boat all summer long as a way to entertain clients and their guests. Bring a guest and you get to spend the day on his boat. Many advisors accomplish this goal through golf, tennis or baseball outings. If you own the boat, the cost is for fuel and food and perhaps catering. Tennis at a club is inexpensive. Golf can be costlier, but you get to spend a lot of time with your clients and guests.

By the way, special events planners can be a great resource. They aren’t very expensive compared with the potential upside of a new client, yet with their experience and creativity, they can maximize your budget and anticipate possible problems. They are well worth the investment!

I believe that with events like this, you can exceed the usual $100 gift limit. However, please check with your compliance department for your company’s policy in this regard.

While the magic may happen at the event, the results happen afterward, so follow-up is critical to your event’s success. One firm I work with has determined that follow-up with your new prospects must occur within 24 to 48 hours. Waiting any longer will diminish your measurable results significantly. What your follow-up will look like depends on the type of event and the rapport you developed with your prospects. Some advisors like to drag out the follow-up by first sending a memento photo of the event or a similar sort of gift. Personally, I think this can work against you capturing the rapport that you created at the event because it delays your personal contact with prospects.

What kind of event can you host? Attractive enough to have clients want to attend and bring guests? Start small. Keep it simple, but classy. Now you’re getting personal, face-to-face, introductions to great prospects.

Bill Cates is the president of Referral Coach International and author of Get More Referrals Now! and Don’t Keep Me a Secret! 


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