Studies show that 87% of customers are willing to refer friends and peers to a particular business. However, only 11% of these customers are asked for referrals.
If you are not in the habit of asking for referrals, START NOW. If you are already in the habit of asking for referrals but have not had much success with it, you can follow the below steps to help increase your level of success.
STEP ONE: WHO ARE YOUR REFERRAL SOURCES?
It is important for you to build a “referral source portfolio”. Below are a few different categories that you can use to build this portfolio of referral sources:
o Past customers
o Current customers
o Prospective customers
Centers of Influence (Non-customers)
o Professional (CPAs, Attorneys, General Contractors, Real Estate Agents, etc)
o Personal (Friends, family, employees, etc)
o Suppliers & service providers (Title companies, appraisers, etc)
STEP TWO: PREPARE TO RECEIVE
Long before asking an existing customer, partner, or friend for a referral you must prepare yourself and the relationship for that effort. Receiving referrals is a process not a onetime event. Prepare yourself by:
- Change your mind set. Asking for referrals is NOT about you. It is about your customer. The focus needs to be on empowering your customer and supporting them, not about serving your needs.
- Have confidence in your services. When asking for referrals you must come from a place of mental strength. Do not sound like you need the business or need your customers help to grow your business. It should feel like you are opening up a special opportunity for them to help their peers.
You must also prepare the relationship that you have with your customer by doing the following:
- Give to receive. If you want to get more referrals, start by giving more referrals to your customers. Learn about your customers business and find out what their ideal customer looks like. Work hard to find leads for them. Send them referrals as often as you can.
- Model the referral sharing process. It will be important for you to give your customer a good example of how to send referrals to them. Later, they will model you and follow your example when referring their peers to you.
- Help them reach their goals. Demonstrate your “servant mentality” by looking for different ways to help your customers in their business. When you help people reach their goals they will help you reach your goals.
- Strengthen the relationship. If you are not in the habit of regularly communicating with your customers than START NOW. Use email, text, phone, newsletters, social media, face-to-face visits, b-day cards, etc to keep in touch with your clients. They must feel like you are genuinely interested in them as a person as well as their business.
- Set new expectations. If you have not been in the habit of communicating frequently with your customers you will need to change that expectation. Talk with them and let them know that you would like to help them grow their further business and would like to stay in better touch with them. In this way they will understand why you are doing what you are doing.
STEP THREE: TEACH THEM WHAT TO DO
Studies have shown that the majority of customers want to refer their peers and associates to your business, but often times they do not know how. Use these tools to teach them what to do:
- Referral guide. Provide your customer with a small card that outlines the main problems that your company fixes. The card might also provide a short summary of the areas or fields of expertise that you have.
- Focus on process. Share with your customer the process that typically happens when a customer refers someone to you. Let them know what the steps are ahead of time so they will know what to expect.
- Focus on results. Listening to a company’s features and benefits is boring and feels “too salesy”. Instead, focus on the results and outcomes that your customers typically experience as a result of working with you. Help your customer understand the difference.
STEP FOUR: THE PROCESS
The most powerful form of being referred to someone is by having them introduce you to their peer. Work to avoid all other forms of “cold referrals” such as being given a name and number and being told to “Give him a call…” A cold referral is any sharing of contact information without an introduction and/or permission being given to be contacted. When the customer is ready to refer someone to you it should follow this process:
- You talk with your customer and together you develop a list of potential contacts.
- Customer selects the best referrals that THEY are going to contact.
- Customer calls referral and talks to them about their experience working with you.
- They ask if it would make sense for them to introduce you to the referral.
- If yes, than the customer sets up a conf call, email or in person meeting where they can introduce you to the referral.
- After the conf call, email or meeting you send your customer a thank you card or other form of appreciation.
STEP FIVE: THE PROCEDURE
It is important when asking for referrals to make the process a multi-step process. Many people who are unsuccessful in asking for referrals simple ask “Do you know someone that I could help?” This is a less effective approach because it often catches people off guard and unprepared. Instead, you should ease into the process with a few of the following steps:
- Ask permission. Prior to asking for referrals it is important to ask your customer if they would be Ok with you asking them some questions, or if they would be OK participating in an informal exercise. In this way, they do not get caught off guard or made uneasy.
- Do your homework ahead of time. Using social media and other sources learn who your customer is connected to. When the moment is right say, “I noticed that you know John Smith. I would like to meet him. Can I ask you some questions about him?” Ask your customer questions to further qualify the referral to see if it would make sense for your customer to introduce them to you.
- Use events to facilitate introductions. Some customers will be more comfortable bring a peer or associate with them to an event and introducing you to them there. Schedule a few customer appreciation events each year and provide training that would be interesting to your customer groups. Make it easy for your customers to invite their peers.
- Take advantage of Value Moments. During your normal interactions with your customers pay attention to those moments when they express appreciation for your services. These moments present a good time to ask for referrals.
- Use the Inner Circle approach. Over lunch or after a sales call, ask the customer to write down the names of individuals that they might call if they had a urgent business challenge. Then ask them which of those individuals might be someone you could help. Ask why. This approach works well in helping the client put a list together before he or she knows what the purpose of the list is for.
- Use open ended & targeted questions. Avoid asking questions that can be answered with a simple YES or NO. Instead ask targeted questions like, “John, we are rolling out a new loan product that is helping start-up businesses purchase new equipment, etc. Who do you know that has recently purchased a new business or has been talking about starting a new business?”
STEP SIX: THE FOLLOW UP
It is important to control the referral process and follow up with your customer. After they have agreed to contact the referral and introduce you to them, ask them when they see themselves having a chance to do that. Ask them if it would be OK to follow up with them about the introduction if you haven’t heard back from them within a day or so after the time they said they would be able to get it done.
STEP SEVEN: TRACKING
It is important to always be tracking and monitoring the progress of your networking and referral generation efforts. You must know what is working and what is not working. Keep good notes. Document everything. Pay attention and learn from each interaction. As you learn make small tweaks and changes to your process. Test small changes rather than big changes so you can refine and tighten your recipe for success. Following this pattern will make you more successful.
For more great tips on generating more leads, visit our website www.HansenGroupCompany.com or call us at 208-346-1005 to receive a free training for your team.