How To Ask For a Recommendation - And What To Do If They Say No?

November 20, 2009 | Filed Under Client Experience, Communications, Strategy | No Comments

“It’s an equal failing to trust everybody and to trust no body.” Thomas Fuller

People do business with people they know and trust.  Trust not only builds relationships,  it drives transactions.  According to McKinsey, over 66% of the economy is influenced by recommendations.  People even trust recommendations from people they do not know!  How many times for example, have you consulted Amazon ratings, Consumer Reports or Morningstar before making a purchase?

If your business is based primarily on recommendations and referrals, than you know how powerful they are for building trust and influencing others to buy from you. Here are some best practices to keep in mind when asking for a recommendation or referral.

1) Ask in a way that does not make your colleague feel awkward, or allow them to decline gracefully.

For example, asking, “Can you please recommend me to the CEO of your company?” is a yes or no question and does not give your colleague an easy way out.  Asking, “Do you think you might be able to provide me with a good recommendation?”  is better.  However, asking, “Do you think you know me well enough to provide me with a good reference?” keeps your colleague focused on your accomplishments or allows them to decline gracefully.

2) Select your referral sources carefully.

This might seem overly simplistic - however, you are asking for a favor so make it as easy as possible (especially if it has been some time since you last spoke).

• Highlight key projects and your specific contributions relevant to the request at hand.
• Be cognizant of their schedule (ex. think twice about approaching an accountant during tax season).
• Explain what you seek to achieve by meeting their colleague and the best way to follow-up after the  recommendation has been made.
• Thank your colleague after they agree to make the referral, thank them after they make the referral and follow-up with them after your meeting (quickly!).

3) What do you do if you ask for a recommendation or referral and your colleague says no? 

One option is to be grateful for their honesty, thank them for their consideration and walk away gracefully.  A more productive option is to thank them for being honest and forthright but instead of walking away, keep the relationship moving forward. For example, try following up with “My sense is that I have disappointed you in some way.  So let’s put the the issue of referrals aside, and spend a few minutes identifying what the problems are so we can get back on track.  Would that be ok with you?”  This latter approach allows you to start a conversation to rebuild your relationship and hopefully, establish trust.

Bernie Made Off With More Than Billions

July 22, 2009 | Filed Under Client Experience | No Comments

News of Bernard Madoff’s 150 year sentence will give limited comfort to some investors.  However, scandals involving Madoff and others have put a spotlight on issues of  trust and accountability in the financial services industry.

“Americans should be more concerned about the return of their money, than the return
on their money.” Mark Twain

Although Madoff’s trial has ended, investor confidence remains low and combined with economic conditions, is unlikely to change near term. As a marketing consultant, I informally surveyed a group of colleagues about what they are doing to restore investor trust and promote accountability in business transactions.

Contrary to Madoff, Adviser Investments uses a third party clearing house and complies with the SEC and other industry regulators.  Advisers who are not registered with the SEC and hold custody of assets have less credibility, and can be a big red flag to investors.  Corby Capital Markets, Inc. proactively keeps clients informed about their portfolio’s performance using a third party clearing house to collect and report investment data.  In the future, Liquidity Reserve Asset Management  believes that investments will be structured differently, becoming more transparent and easier for investors to understand.  Further, with performance anticipated to be below historical values, firms might need to realign fees closer to performance in order to attract new investors.

Do investors share part of the blame for what has happened?

Yes, particularly high profile investors who followed a herd mentality to make investment decisions vs. appropriate due diligence.  Strategic Insights recommends going beyond secondary source data to perform enhanced due diligence, especially in a strong economy.  During this time, investors are more likely to rely on direct data from high profile advisers such as Madoff, whose antics only became known when the economy began its downward spiral.

Regardless of the economic environment, individuals with fiduciary responsibility need to enhance client trust and investment accountability in both appearance and in fact.  In the qualified plan market, The CIP Group believes that advisers should take a more active role in identifying and managing the ongoing fiduciary obligations of the plan sponsor and its investment committee.

As difficult as it can be, practitioners need to communicate more openly and frequently about the downside of their client’s portfolio performance.  Afterall, when it comes to money, it’s not what you start out with - it’s what you end up with that counts.