The Simple Art of Referrals

I have read many articles on our industry, but I rarely come across ones that keep the art of referrals simple. These articles, blogs, and stories all talk about CPAs, attorneys, and all the relationships we need to maintain with these sorts of folks. But none of the articles ever talk about family and friend referrals—referrals from people that we’re always around. So I keep asking, “Why is that?” Are we judging the people we know? Or, are we simply too afraid to push those that are close to us into learning more about what it is we actually do.

I once found myself in a family situation with a few relatives just sitting around and casually watching television. One of them, who had been recently laid off, started asking us what to do about the 401k that he needed to roll over. Of course, I made the classic mistake of trying to explain what an annuity was right then and there. Within five seconds, the other present family member blurted out, “You don’t want to buy that! There are too many fees.” I wanted to respond, but realized I should have never started explaining things in that forum. I never got in front of this “prospect,” and to this day, I believe my credibility was damaged permanently with both of them. 

There is a better way to handle these types of situations, and what I do now is simply say something like, “Hey cousin Bob. When can I call you to discuss the matter? I may have an idea or two that could help you.”

One of two things will happen in that moment. They will either say, “That’s okay,” or “Really? Like what?”

Again, the temptation to explain right then and there must be avoided at all costs. The peanut gallery always knows best, and they can only be silenced by never giving them the chance to beat you up in public. Isn’t it funny how those who know the least about a subject are almost always the first to chime in and give their opinion?

In conclusion, I never discuss business in front of these two family members anymore. Being more experienced now, I have been tempted, but it just isn’t worth the public stoning you end up getting. That said, I still believe family and friends are our best sources if handled right. The goal, as always, has to be the meeting. No meeting, and there will never be the chance to show how much you really do know. Look for my next article on how shooting from the hip always works best.