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Improve Your Referral System

Using the MISC formula can help you convert more referrals into clients.

By Bill Bachrach, CSP

It would not be an overstatement to say that most referral systems don’t work. The primary reason is that most advisors don’t actually ask for referrals or use any system. However, if you’re using a system and obtaining referrals, and you’re not satisfied with your success rate, it may be due to two simple reasons.

First, advisors rarely gather enough information about the people they have been referred to. To improve your success rate, you must create a compelling reason for people to want to take or return your calls. How do you create that compelling reason? You find out in advance what’s important to people, and you let them know how you can help.

The second reason for a sluggish success rate may be that you’re not prepared to respond to legitimate questions and concerns. If you view these as objections, and the person you’re calling says something like, “Well, I already have a financial advisor,” you’re likely to adopt a defensive posture that can lead to an adversarial relationship. The conversation becomes a debate, with you trying to persuade people instead of addressing their legitimate concerns.

On the other hand, you may be achieving some success with your referrals because the people you call have such strong relationships with those who referred them to you. These folks would talk to you no matter who you were or what you said. Referrals like these are wonderful, but they’re few and far between. More often, you’ll be calling people who aren’t automatically warm and friendly. How can you break the ice? If you want to build a high-trust relationship, chitchat or talking about your credentials won’t do it. Before you even call the referral, you have to ask the referring person the kinds of questions that get him thinking about what’s meaningful, important, significant or compelling to the person they’re referring. Remember the acronym MISC. It stands for meaningful, important, significant and compelling, not miscellaneous information.

Have a MISC conversation
Here’s an example of how a MISC conversation might work. Let’s say I ask my client Dan for referrals, and he recommends his friends John and Sally. To obtain MISC information, I might have the following conversation with Dan. Notice the types of questions I ask. They’re designed to stimulate Dan to think about what’s meaningful, important, significant and compelling to John and Sally.

Bill: Based on how you know John and Sally, what makes you think they’d value the same experience that you’ve had in working with me?
Dan: They have some goals and are interested in achieving them, but I think they could use some help.

Bill: What are some of the goals that you know are significant for John and Sally?
Dan: They’d like to own their own home and have the financial freedom to travel more often.

Bill: Have they ever mentioned particular places they really want to visit?
Dan: Oh, yes. They’d love to go to Europe, and they’d like to visit their families more often.

Bill: Which family members would they like to visit and where do they live?
Dan: Their parents. They live in California, and John and Sally live in Maine.

Bill: If they had more time, what would you guess John and Sally would want to spend their time doing?
Dan: John would like to spend more time with his horse.

Bill: What’s his horse’s name?

Did you notice how specific those questions were? Now, when I call John and Sally, I can say, “I understand that some of the things that really matter to you are taking a trip to Europe, seeing your parents more often and spending time with your horse, Mr. Ed.” Knowing that their parents are important to them, and even knowing the horse’s name, makes what I have to say much more compelling than if I talked about family, travel and hobbies in general.

Before you start dialing, prioritize the five most compelling reasons why what you do will have a positive impact on the referred person’s life.

Be ready
It’s also crucial to ask specific questions about the person’s spouse. Then you can have the same kind of conversation no matter who answers the phone. Before you start dialing, prioritize the five most compelling reasons why what you do will have a positive impact on the referred person’s life. Lead with the best one. The response you get will determine whether you need to use the remaining ideas. Also, be prepared to respond to the three or four most common questions and concerns that could come up initially.

If you want to improve your referral success, try using questions like the following to elicit MISC information. Remember, you’ll be asking your existing clients about people who might benefit from working with you.

  • What do they do for fun?
  • When they talk to you about their future, what plans do they have that are meaningful to them?
  • Who are the people who matter most to them, and what do they like to do with those people?
  • Is there anything they’re really passionate about? Any charitable or philanthropic endeavors?
  • Are they spiritual people? Religious people?

Finally, if you really want to improve your referral system, don’t be a salesperson. Be a Trusted Advisor.

© 2005 by Bill Bachrach, Bachrach & Associates Inc. Used with permission. All rights reserved.

Bill Bachrach is the author of four industry-specific books, including the newest book, It’s All About Them: How Trusted Advisors Listen for Success. For information about his services, including The Trusted Advisor Coach program and free newsletter, call 800-347-3707 or visit his website at

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