Why Referrals Are the Main Way Wealthy Clients Arrive

Imagine a florist named Maren Holt who sends fresh flowers to 14 houses every week. She pays $400 a month for ads online and a listing in a wedding directory. In December, she sits down with her client list. Next to each house, she writes how it first heard her name.

Eleven of the 14 heard it from someone. Six came through two clients who passed her name to friends. Three came from a house manager who hires for two estates on the hill. Two came from an event planner she works with. The ads brought three houses. Two of those stopped by spring, after asking her for a discount.

The first calls were different too. A client sent by a friend usually asked which day Maren could start and what a week of flowers costs. A client from the ads asked for photos of past work and a price list. She also wanted time to compare Maren with two other florists.

Maren does the same work for all 14 houses. What changed from one house to the next was how it came to her. Most of the owners heard her name from someone they trusted, so they trusted Maren before the first call. Here is why a referral carries that much weight with a wealthy client. And here is why it is still not the only way in.

Wealthy buyers ask people they trust before they choose

In 2008, the Luxury Institute asked Americans earning at least $150,000 a year where they turn before an expensive purchase. While the largest group, 64%, went straight to the websites of providers they already knew, 57% asked friends and family. The wealthiest buyers strongly preferred to ask professionals, such as travel agents and realtors. In the survey, the wealthiest were worth at least $5 million or earned more than $300,000 a year.

The survey was about cars, jewelry, travel, and clothes, and the step to a service business is the course’s own. Here is the step. A client who is about to let someone into the house asks the people whose judgment they respect. It might be a friend, a relative, or an adviser they already pay.

A referred professional starts the first call already believed

When a friend gives a client your name, the friend has already done some of the checking. The friend has seen your work in their own home. They have watched you keep a date, or miss one. So the client starts out trusting the friend’s judgment, and some of that trust passes to you.

That explanation is the course’s own, and here is its reason. A friend can tell the client what you were like to work with, and no page of yours can do that. By the time the client calls, the friend has answered part of the question of whether you can do the work.

So a client sent by a friend asks fewer questions about you. Maren’s referred clients asked about days and prices. A client from an ad has nobody to vouch for you, so she asks for proof.

Referred bank customers stayed longer and were worth more

In 2011, three researchers tracked about 10,000 customers of a large German bank for almost three years. They were Philipp Schmitt, Bernd Skiera, and Christophe Van den Bulte. Some had joined through the bank’s referral program, and the rest had not. They published the results in the Journal of Marketing.

The referred customers brought the bank more profit at first, though that gap shrank over time. They were also more likely to stay, and that gap lasted. On average, a referred customer was worth at least 16% more than a customer who was not referred. The researchers compared customers who were alike and joined at the same time.

Those were bank customers, and the step to your clients is the course’s own. Here is the step. A client who came through a friend is likely to stay longer than one who came through an ad. So when you look at where your clients came from, look at how long each group stayed, too.

A portrait photographer’s referrals snowballed, and then some of them stopped

Jeffrey Shaw spent 40 years as a portrait photographer for wealthy families, based in New England. On a podcast for financial advisers, he described how he broke in. He walked into expensive children’s boutiques and jewelry stores with his photos rolled up in a black tube. When people asked what was in the tube, he laid the photos out. Then someone suggested that he donate his services to a silent auction at a social event. The first one he did was in 1987, for the Junior League of Greenwich. He showed up with a portrait to put on display.

Twelve of the women on the committee hired him straight away. “And then it just snowballed,” he said. “It’s one person told another person. My business increased fivefold in one year.” He said it took several years to reach the peak of his career. At that peak, he kept an eight-week waiting list for 15 years.

Then some of the referrals stopped. “There became a point where people wanted to keep me private,” Shaw said. “They wanted to keep it to themselves.” Some clients told him why. “Well, to be honest with you, Jeffrey, I’m not telling my friends about you because I don’t want my photographs to look like theirs.”

So Shaw changed what he told clients. His studio made about 15,000 holiday cards a year, and many of the families lived near each other in the Northeast. He promised every client that their card would be different, and the studio tracked who had which card. He also told clients that his style was recognizable, but “I’m going to make sure your portraits look different than anybody else’s.”

He set one more goal. He wanted 70% of his income to come from clients who had hired him before. He checked that number at the end of every year, because a drop told him something needed fixing.

Measured against this lesson, Shaw’s story makes two points. Referrals built his business. They also stopped for a reason inside his clients’ circle, with nothing wrong in his work. His answer was to promise each client work of their own. He also kept most of his income coming from clients who returned.

Referrals are the main way in, but not the only one

The 12 women on the committee did not hire Shaw because a friend gave them his name. They hired him after seeing his work at a charity auction. In the Luxury Institute survey, too, more buyers went straight to a provider they knew than asked a friend. So referrals are the main way a wealthy client arrives, and not the only one.

Referrals also come when a client decides to speak, and you cannot set that date. Good work on its own does not make them come, and they can stop while the work stays good.

So put most of your effort into the clients and the people who already send you work. Then keep one way open for a client to find you without a friend’s word. That is the course’s suggestion, and Shaw’s story is its reason. His first clients saw his work before anyone told them his name.

Why counting on one host’s word goes wrong

Imagine a caterer named Joaquin Ferrer who cooks for dinner parties in one town. Nearly all of his work comes through Celia Marsh, who hosts often and gives his name to every guest who asks. He lets his website go, because nobody seems to use it. The menus on it are three years old, and the phone number is his old one.

In the spring, Mrs. Marsh moves to Charleston to be near her daughter. Joaquin’s summer has six open Saturdays. A couple who ate his food at a wedding search for his name. They find the old menus and a number that does not answer, and they book another caterer.

Joaquin treated Mrs. Marsh’s word as his whole business. The version that works keeps her referrals and adds a second route. His website comes up when someone searches his name and his town, with the current menus and a number that answers. He also counts who else has sent him work, so he knows when one host is carrying most of it.

How to find out where your clients come from

Make a list of every client who hired you in the last two years. Next to each name, write how that client first heard of you. It might be another client, a planner or a house manager, a search, an ad, or an event. If you do not know how a new client heard of you, ask how they came to call you.
Next to each referred client, write the name of the person who sent them. Count how many clients each person sent. For example, a music teacher might find that four of her nine families came through one mother at the Lowell School. Counting is the course’s suggestion. Its reason is that a referral can stop without warning, so you want to know which people carry most of your work.
Compare how long the referred clients stayed with how long the others stayed. Then cut the money you spend on any ad or listing that brought clients who left within a few months. For example, a dog walker might drop a $90-a-month listing that brought two clients in a year, both gone by summer.
When a referred client gets in touch, answer as someone the client already trusts. Leave out the portfolio and the list of reasons to hire you. Answer the question the client asked, and give your free dates and your price. For example, an interior designer can write, “Thank you for writing. I can measure the two rooms the week of March 3, and my fee for both is $6,500.”
If a client tells you that they keep your name to themselves, ask what worries them. If they do not want their work to look like a friend’s, tell them how you keep each client’s work their own. For example, a private chef can say, “I never cook the same menu for two families who know each other. Yours is written for your table.”
Keep one way for a new client to find you without a friend’s word. For most professionals, the simplest is a website that comes up when someone searches for your kind of work in your town. Keep it current, with recent work and a phone number that answers.

Next: You will see how to become known for discretion and results, so clients pass your name on without being asked.