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When Should You NOT Ask for Referrals?

If you’ve been reading my articles over the last few years, you know that I’m a huge advocate of asking for referrals.  While I don’t teach an aggressive approach, I do advocate finding ways to be appropriately proactive.  Sometimes, it’s appropriate to promote the referral process by planting referral seeds. One of my favorites is, “Don’t keep me a secret,” and many reps have great success with it. But sometimes, it’s appropriate to come right out and ask for referrals especially if you know that your client has recognized the value you bring to the relationship.

There are three basic scenarios in which you should consider not asking for referrals:

1. You have to take into consideration a client’s personality. One way to measure a client’s personality is to use a gradient scale from Very Open to Very Guarded (contained).  Obviously, a more open person will be more likely to play the referral game earlier in the relationship.  A guarded person will take longer to warm up to referrals.  Some guarded clients may never warm up to the referral process.

I don’t recommend asking a guarded person for referrals in the first or second meeting (while this could be easy to do with a very open person).  When you do ask a guarded person for referrals, and it’s clear they are uncomfortable with your request, you have to back off quickly.
That said, you do have guarded clients who will give referrals, but only on their terms—not yours.

2. The second situation where you might consider not asking for referrals is when a client doesn’t fit the profile of your Ideal Client.  I believe it is critical for you to develop a very clear sense of who fits your business and who doesn’t.  I also believe that you need to resist doing business with clients who do not fit your profile. The one exception to this thinking is when a client refers you to a very close family member.

There is no question that some of your grade B and C clients can refer you to grade A clients. But can you ask a B or C client for referrals, if you’re only pursuing A clients?  The answer is yes and no.  In most cases, you can’t unless you have an unusually strong relationship with that client. When that client has become a business friend, then you can talk about where you’re headed with your business and how they might help you get there.  This is a conversation usually reserved for business friends.

3. You probably don’t want to ask for referrals when the performance of your client’s portfolio is significantly below average and your relationship is suffering because of it.  After a recent seminar, a participant came up to me and said, “How do I ask for referrals when a client’s account is down by 70%?”  I told her two things, one of which I knew she didn’t want to hear, but needed to.  “First, you can’t ask for referrals right now while you’re engaged in damage control. You need to focus on rebuilding your relationship with that client and making sure sound strategies are now in place. Secondly, you need to reconsider the financial strategies you bring to your clients or what you allow them to do to themselves.”

Of course, you always want to make sure that a client judges your performance as something separate from the performance of the market, but that’s not always possible. There will be times when some relationships get hurt because the market is hurting. In these cases, be as present as possible when confronting the problems. Work on restoring your client’s trust in you. If your client lets you do this, you will become referable in their eyes once again.

There is no one approach to referrals that will work with every person every time.  There is the skill – having the right tactics to apply, and there is the art – knowing what to apply and when.  The more tools you have in your referral kit, the more likely you’ll have the right one for the specific job.  Sometimes I’m asked, “What’s the most important ingredient in being successful with referrals?”  My answer is always the same, “You’re commitment to mastering referrals.”  When you make an internal commitment to mastering referrals and you become a student of the game, you will more naturally pick up the skills and awareness that will work for you.  Don’t let anyone tell you there is one best way to get referrals.  Hey, I teach a very specific system to generate referrals that has proven effective with thousands of financial professionals. Yet, I know that it’s the rep applying the skill at the right time that makes my system, or any system, work.

About Bill Cates

Bill Cates
Bill Cates is the President of Referral Coach International.  His trademarked Referral Advantage™ Program has been featured in such publications as Success Magazine, Entrepreneur Magazine, Selling Power and Research Magazine, and his own business success has been featured in Money Magazine. Bill is a regular contributing editor for many financial services publications. Visit his Web site at Bill Cates, author of “Get More Referrals Now!” and “Don’t Keep Me a Secret!” is offering you a free copy of his report “7 Deadly Referral Mistakes” as well as a subscription to his free referral newsletter with 30,000+ subscribers. (What do they know that you don’t?)  Go to  To contact Bill, send him an email at or call (301) 497-2200.

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