You get referrals in your business already because you’re good at what you do. 90% of the referrals systems I observe with coaching clients are at best “passive”, not “proactive.” They don’t have a world class, consistent and proven practice for generating referrals on an ongoing basis. Instead they just do great work and let the referrals trickle in.
The opportunity costs of “trickle in” referrals are shocking. One of my financial advisor clients in Atlanta had these numbers to report after implementing the referral strategies I’m about to share with you:
Annual Revenue 2009: 800k
Annual Review 2010: 1.54M
That’s a 100% jump!
Average Transaction Size 2009: $13.5k
Average Transaction Size 2010: $18.9k
# of Referrals 2009: 91
# of Referrals 2010: 156
You’re probably saying “s**t!” You can’t fake numbers, they speak for themselves. Here’s how we did it:
Step 1: Orient every new client converted around the referral process.
New clients need education on how your business works. If you don’t tell them how, don’t count on great referrals. First, let me know that at this point you’d like to tell them how your business works, to get the most out of your services. They agree. Tell them that your business thrives on referrals, you are a by-referral-only business and you’re very proud of the fact you get so many of them—it means you do great work. You’re by referral only because you only want to work with great people like your client, and instead of going out and putting all your energy into finding new business, by getting quality referrals, you redirect all the time, attention, and care back to your clients like him. Let him know that you’d only expect someone to refer his friends to a person who takes clients’ vested interests to heart like this.
So you’ve explained well the reason why you focus on referrals, but now it’s important to gently disclose what you expect of your client now that he’s part of your program. Your focus is to make that client a raving fan. And to do that you must demonstrate not just outstanding service, but give him the most unique process out there, one he can’t find anywhere else, and it’s crucial to his future success. I’ll leave the unique process to another article. Essentially, the deal is that if you transact business, and move forward, you expect 2 favorable introductions in exchange for blowing his mind. Let your new client know that down the line, if he’s blown away, you’ll expect two favorable introductions to referrals like him. Ask him for agreement on this before moving forward because it’s how you transact business. Notice I’m suggesting favorable introductions, not the word referrals.
Step 2: Get A Report Card regularly on your level of value that you create for clients.
Ask clients regularly to give you a report card on your level of service and their satisfaction.
Do this after a great call together, a meeting, or just pick up the phone and ask. They’ll tell
you. If you get an A, ask them for examples, so that you know what they mean. If you get a B or less, ask them what you can do to earn an A+ in their eyes. When your client knows how important he is to you and feels listened to, you’ve made him feel honored and special. It takes vulnerability to ask this and he appreciates your courage and integrity to match what you promised him originally.
Your client doesn’t refer you to others because of you. I know you’re great and have many qualities which earn referrals, but he’s not interested in those when it comes to referrals. He refers because he cares about his friends, and want’s to share something great with them. He wants to be helpful. When you demonstrate this kind of adjustable service adherence by asking for ratings, you’re helping your client see why to help a friend.
Let your client know his report card after you get yours. Let him know what you appreciate about him so he can perpetuate what get’s your creativity flowing and enthusiasm for better and better value from this point on. When clients hear compliments from you, it sends a subtle signal to them about qualities you prefer in others they may know. It’s like covert referral training.
Step 3: Systemically Ask for Referrals.
Not now and then, or when you feel it, or hit or miss. Systematic means doing it continuously and regularly. When your client pays you a sincere compliment, that’s a pivot. Pivots are sudden shifts to prompt for a favorable introduction. You could ask them who they know who appreciates the same level of service. Another pivot is when you give your client a compliment too. Ask them who they know with the same remarkable qualities. These are good leap-off points into discussing favorable introductions.
When you have a special meeting with your client to discuss their ongoing needs and review progress, bring them a unique client gift. When you bring them something they’d love, it shows how special they are to you. Clients leave you for lack of recognition. Competitors hunt
down those you’ve neglected. When you give a unique client gift you’re telling them how much of a priority to you they are and again want to give this special feeling away to friends who’d enjoy the same.
If you feel pushy or reluctant to bring up referrals to clients just remember this fact: they refer because they love friends and want to hand over something worthwhile. Who doesn’t love being a hero to someone else? And this client referring you most likely reached you by referral. Paying it forward is a natural way of compensating for their gratitude to have you in their life.
Step 4: When asking, make it as easy as possible.
Our clients put together a “Platinum Club” list of most wanted clients. I’m always amazed when I hear how familiar their clients are with the people on this list. This list of 25 people are your ideal clients with company name and first names listed on it. I had a top manager from Starbuck’s on mine and after sharing the list with three of my clients, I had a favorable introduction being sent to the manager via email and warm call on the other line within 2 days. When you setup reverse referrals like this you’re narrowing the frame of reference for clients to open doors and endorse you.
Asking for referrals is like asking if you know any good jokes. You know so many people, but find it tough to think of one when asked. Make a single page called your Ideal Client Criteria. Be specific, bold, and choosy about the qualities you work your butt off for in clients. When you prompt for referrals, bring this out. Ask your clients for a favorable introduction to the most successful businessperson you know.
Pre-write an email in your client’s words that your client could send to the person they’re introducing to you. Make sure they put your email in the CC so the person they’re referring has
noticed you’re aware of the referral and an introduction is due. Do not call the person first, always get a warm introduction to their referral first so it’s not awkward. They’re expecting your call.
If your client agrees, get together for lunch the three of you. This way your client can endorse you in person and mention the deliveries he’s enjoyed from your work with him.
Step 4: Incentivize your Referrals
Consider two incentives. What are you going to implement to reward those who refer you? Don’t pass this by because once you’ve opened up the referral spicket, you’ll want to keep the flow going by reinforcing your clients with rewards. Always give them something they’d love. Spend the money. Don’t be cheap. Consider 3% of the sale going toward a reward for them. Consider 7% of the sale going toward the second incentive. This one is a special offer or incentive to the person your client is referring. I’m not suggesting you give them deals. That’s deadly because you train clients from the get-go to ask for discounts. Instead charge normal but consider the bonus or incentive they’ve earned by being referred. What extra do they get? What else will you throw in? Again, help your client who referred them be the hero in all of this and reward them too.
Step 5: Make spaces for clients to bring friends.
Gently insert yourself into clients’ social circles by buying them a round of golf with 2 extra spaces. If you’re going to the Angel baseball game, buy 4 seats. If you’re doing fishing in Baja, buy an extra room. If you’re going motorbiking in the mountains, rent 2 more bikes. This is a great point of entry to get familiar with close friends and potential clients on informal turf.
Step 6: Systematically Follow Up
Don’t call the referral right away. Wait 24 hours. If you’re coming across as aggressively looking for business, that’s a turn away. Instead send an email if you have it and prompt the person for a phone appointment. If you don’t have the email, call within 24 hours and let them know you promised your client that you would contact them. Tell them that your client said they were interested in speaking to you and that your client thought you could help them with their situation.
What this introduction does immediately is communicate your high level of dependability. You’re a safe bet because you promised you’d call and you came through. Second, you’re stating that your client thought you could help. They respect your client more than you at this point so this opens them up. And when you say that your client mentioned they’d be interested in speaking with you, you’re sending the message how much your client cares about them doing well. Again, the client is the hero.
Bonus Step**: Don’t Join Private Network Groups, hand pick your referrors
Private network groups like BNI an Le Tip lack referral sincerity. I ran a BNI group for several years and privately networked from 2000-2007. The motivation is to bring in a lead each week to avoid embarrassment. These groups develop alot of “inside referrals” but you’ll see much grander and stronger potential clients by selecting people who have qualities you like, respect, and work hard for. Instead make a list of 10 people you would go to bat for, work hard for, respect, and would love referring anyone to in heartbeat. Birds of a feather flock together. When you’re selective who get’s attention and referral training, you’re taking a sizable step into attracting ideal clients. You may want to setup a referral relationship if they’re an alliance, and put all your favorable introduction preferences and platinum clubs into a pow-wow meeting to strategize introductions and build new doorways into opportunities together. What I’m saying is going deeper that penetrating their acquaintances. Really take a comprehensive look at your own network, you haven’t tapped it fully yet.
Private network groups tend to have 20% givers and 80% takers. When the takers drain the givers, givers leave because of inequitable contribution levels. Ultimately this leads to more members, less quality referrals, hyper inside leads, and mass discouragement. Alliances are much better because two people can poach each others’ databases in depth and develop a war room strategy for mutual benefits which are fair and equitable.
Now, let’s talk about implementation. You probably agree with this approach and doing some of it now. But you lack accountability, consistency and finesse. Without coaching and guidance, you’re not likely to do this for yourself because it’s not comfortable. It’s not a habit. You need help. If you’re comfortable with your own ignorance in this area, call us at 714-375-6624. Let’s make you a referral ninja!