Running the firm
Referrals are not a growth strategy
They are the best clients you will get and the least controllable input in the business. A firm whose plan is referrals does not have a plan.
Published
Why referrals are the best clients
They arrive pre-trusted, they close faster, they negotiate less, and they stay longer. Everything about them is better.
Why they are not a strategy
You do not control the volume or the timing. Referral flow is roughly proportional to the size of your existing client base, which means it grows a firm at a rate set by how big it already is.
For a new firm, that is close to zero.
What actually increases them
Asking, which most advisors do not. Being specific about who you are looking for, so clients can recognize a match. And making the introduction easy.
“We work with people in the two years either side of selling a business” produces referrals. “We appreciate introductions” does not.
Clients do not withhold referrals. They cannot tell who you want.
The controllable channel: professional relationships
Accountants and lawyers see the events that create advisory needs before anyone else. Building two or three real relationships is slower than networking and produces qualified introductions for years.
It works when you are useful to them first, and it does not work as a transaction.
The other controllable channel: being findable
Writing something specific enough to be worth reading, and publishing it where it can be found. It compounds slowly and it works.
This requires having something to say, which returns to positioning.
What does not work
Generic content nobody would search for. Advertising for a considered purchase with a long cycle. Buying leads that were sold to four other firms.
The realistic mix
Referrals as the majority, professional relationships as the controllable middle, and content as the slow compounding layer. A firm relying on one of the three is exposed.