You will be able to estimate how your mix of new and existing clients should change over three years.
Find the list of new clients you signed over the past year and mark each one who came through a referral from someone who already knew you. Divide the referred clients by the total. That figure is your referral share. It is one of two numbers you will set for the next three years.
Daniel is a representative in his first year. He spends almost every evening and most weekends meeting new people. By the end of the year he has about thirty clients (all figures here are his examples) and is tired in a way sleep does not fix. A senior colleague asks him where he wants his new clients to come from in three years. He has no answer, because he has been planning one month at a time.
His first year looks like most first years. Early in your career, most of your time goes to finding new people. You have few clients, no reviews to run and nobody yet who can give you referrals. Lesson 6.4, "Build a compliant 30-day prospecting plan", was written for that stage.
Over time the mix should shift. Each new client adds reviews, claims support and contact between reviews. Each client you look after well also becomes a possible source of referrals. A healthy practice gradually moves from mostly prospecting to spending more time on reviews, servicing and referred clients. You never stop prospecting entirely, but the share of new clients who come through people who already trust you should grow.
If that share does not grow, there are two possible causes. Either your service is not good enough to generate referrals, or you are not asking at the right moments. Lesson 8.2, "Ask for referrals after value, not after signing", deals with the second cause.
Referral share is the number of referred new clients divided by your total new clients. Each quarter, count the new clients who came from referrals and the new clients who came from everything else. Then divide the referred number by the total.
Daniel looks back at his first year. Of his 30 new clients, 4 came from referrals. 4 divided by 30 is about 13 percent.
One quarter's figure tells you little on its own, because it bounces around. Judge by the trend over several quarters. A share that rises steadily means clients value your service enough to put their name to it. If the share stays flat after two or three years while your client numbers grow, look at your service and at how you ask for referrals.
One representative can only look after so many clients well. A book that grows past that limit fails in the ways modules 5 and 7 warned about: missed reviews, files written late and clients drifting away. Your capacity is the number of clients you can service properly. You can estimate it like this:
Estimate the hours per client per year for proper servicing, counting the review, preparing for it, writing the file the same day, and contact between reviews. Decide how many hours a week you can give to servicing steadily, alongside prospecting and everything else. Multiply those weekly hours by your working weeks to get your annual servicing hours. Divide the annual hours by the hours per client. Round the result down and treat it as a planning limit to stay under.
Daniel estimates five hours per client per year. About three of those are for the review, including preparation and writing the file, and about two are for everything else. He decides he can give twelve hours a week to servicing. Over 46 working weeks, 46 x 12 gives 552 hours a year. 552 hours divided by five hours per client gives a capacity of about 110 clients.
These figures are estimates, so round them down. Capacity is a ceiling for planning, and you are not trying to reach it. If your book is heading past the limit, change something before service drops. You can add servicing hours, make your review process more efficient, or slow your growth.
A three-year plan starts with your current client count and adds the new clients you aim for in each year. You then check that the total stays under capacity and set a target referral share for each year. Finish by writing down a trigger: what you will do if the referral share does not rise.
Daniel starts with his current book of 30 clients. For year two he aims for 24 new clients, with a quarter of them (6) from referrals. For year three he aims for 20 new clients, with 40 percent of them (8) from referrals. If no clients leave, he ends year three with 30 + 24 + 20 = 74 clients. That is well under his limit of about 110 and leaves room for clients who stay longer and need more of his time.
His trigger reads: if his year-two referral share stays near 13 percent, he will look hard at his reviews and his referral ask before adding more prospecting.
This plan uses only numbers you can plan. It does not cover channels such as LinkedIn or content. The course "Social selling and referrals: LinkedIn, content and word of mouth" teaches you to build a presence on LinkedIn and through content, and goes much further into the channels themselves.
You now need to choose two numbers: how many clients you can service well, and what share of your new clients you want from referrals in each of the next three years. In the activity below you write both down, with the working behind them, so lesson 8.4 has something solid to build on.
Write down how many clients you can service well, and the share of new clients you want from referrals in each of the next three years.
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