May 16th, 2012 by Stephen Wershing

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A recent video blog post demon­strates why tar­get mar­ket­ing is so important.

Veron­ica Dagher of Dow Jones recently posted a video in which she asks passersby on a Man­hat­tan street what would cause them to make a refer­ral to their finan­cial advi­sor.  Some sam­ple ques­tions and answers include “What do you like best about your advi­sor?” “He gives me thought­ful ideas.”

“What could your advi­sor do to improve his ser­vice?” “Focus on what I need and my objectives.”

“What does it take to get a refer­ral?” “The con­fi­dence that they will con­tinue to do a good job for who­ever I referred over.” “They would have to do a good job through­out the mar­ket cycle.”

Does it strike you that any of these peo­ple come off as par­tic­u­larly enthu­si­as­tic about mak­ing refer­rals to their finan­cial advi­sor? It doesn’t come across to me like that. Notice, for exam­ple, they answer the hypo­thet­i­cal ques­tion “What would it take for your advi­sor to get a refer­ral” rather than respond­ing “I give my advi­sor refer­rals, and this is why.”

My con­vic­tion is that the key to being refer­able is to pro­vide a spe­cific set of ser­vices tai­lored to the needs of a well defined tar­get mar­ket. What is the trig­ger phrase that would get any of the sub­jects of this sur­vey to tell some­one about their advi­sor? Would one of their friends have to say “I wish I could find a finan­cial advi­sor who will do a good job for me through the mar­ket cycle?” Peo­ple don’t talk like that!

If you have care­fully and specif­i­cally defined your ideal client and tai­lored your ser­vices to the needs of that group, and that client was inter­viewed by Veron­ica, I can envi­sion their response to the refer­ral ques­tion to be some­thing like “oh I do pro­vide refer­rals to my advi­sor. He works with peo­ple exactly like me, and under­stands the par­tic­u­lar things I need. So, when I hear a friend like me talk about their chal­lenges with money, I always pass his name along.”

If Veron­ica but­ton­holed your clients and asked about you, what would they say? Would it be “he lis­tens to me and does a good job.” Or, would it be “he knows me. He spe­cial­izes in peo­ple like me.” And which do you think would get you more referrals?

Stephen Wershing, CFP® coaches financial advisors to be more effective and successful, and attract more clients and referrals, by developing more client-connected and client-driven practices. His process of collecting systematic and objective client feedback and using it to reorient an advisor’s practice effectively engages an advisor’s best clients to drive the strategic plan of the business. He consults financial practitioners on many practice management issues, including strategic differentiation, client advisory boards, and implementing technology. Read more from the author/contributor here.

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Tags: Challenges, Confidence, Conviction, Dagher, Dow Jones, Good Job, Hypothetical Question, Job Market, Man On The Street, Manhattan Street, Phrase, Questions And Answers, Referral Question, Referrals, Sample Questions, Service Focus, Target Market, Target Marketing, Thoughtful Ideas, Veronica
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