INTENTIONAL REFERRALS.
Referrals – we love to get them, we hate to ask for them!
And yet, almost nothing can be more beneficial to the entrepreneur or small businessman. Referrals provide new business at almost no cost, and frequently provide a new customer who’s pre-sold. Most businesses are delighted with referrals, and they just wait around for them! A referral strategy, regularly executed, can make a colossal difference to your bottom line.
Following: 7 steps to profit without expense.
This document focuses on the value of referrals, and some methods for avoiding the stops we encounter around asking. Bob Burg wrote an excellent book called Endless Referrals, from which much of this material is taken. Burg’s book goes deeply into networking practice, and is a great advisor. In this newsletter, we’ll narrow our focus to the strategies and tactics of getting an abundance of referrals for your small business.
- 1 – Isn’t it true that our good friends and good customers are the best informed and probably the most enthusiastic support groups we have? I’m assuming that most of us need training on seeking referrals in order to train your customers and colleagues. It’s not hard to do, they’ll love you for it, and you’ll really love the results.
Small-business owners usually describe their advertising as “word-of-mouth.” They occasionally get a referral from a friend or client, and occasionally turn it into business. These are wonderful moments – a customer has affirmed you, and you have a new client as well. When he tells you about it, he’s proud to proclaim that it was unplanned. As we observed before: “unplanned” is not necessarily a good thing!
If a large business needs a seasonal emphasis on sales, they revert to advertising to simulate sales activity. A car manufacturer has too much inventory when the new models are coming out. What does he do? He reverts to advertising to stimulate sales activity – a half-a million dollars invested in spot TV might do it nicely. Paid advertising is a resource for business – properly handled, it implies an R.O.I. proposition – an investment that produces a return. And it can be controlled, so that you get what you want when you want it. Isn’t there an alternative process available for the solopreneur or small businessperson? Something which can be equally deliberate, lower in cost, and take advantage of the connections and relationships s/he’s developed?
Generating and directing referrals comes from a focused approach to networking – which Burg defines as “cultivating mutually beneficial, give-and-take, win-win relationships. The end result [is to] develop a large and diverse group of people who will gladly and continually refer a lot of business to us, while we do the same for them.”
- 2 - But when you ask, consider Girard’s Law of 250. It suggests that there are about 250 people in our “sphere of influence” who would attend our wedding (or our funeral.) That’s where we networkers start. We network with them, we send them newsletters and thank-you notes, perhaps buy them breakfast or lunch. We attend networking meetings, exchange business cards, do one another favors. We invest energy and money in networking. The investment we make is hard to quantify, and this is probably just as well, since we may have a tough time evaluating Return On Investment.
- 3 – While we pursue networking opportunities, we ignore our best sources of business –our satisfied customers, the people who have had the most recent experience of our products or services. And right up with our customers are our colleagues, those we trust and who trust us.
We reason that it’s inappropriate to train our customers to be powerful referrers – we’re supposed to be working for them, not the other way around. And we wouldn’t want to coerce or manipulate a friend, would we?
- 4 – We’ve forgotten Benjamin Franklin’s dictum – “If I want a friend, I let him do me a favor.” In fact, your customers are not only the source of your current business – they can be a superior source of new business as well. And colleagues would be delighted to help – if only they knew how.
- 5 – When a referral says: “What can I do for you now that you’ve been such a help to me?” what do you do? What would you say?
- 6 – When a client says: “I’d be happy to be a reference for you.” What would you say?
First, let’s have a look at what you really want. You want an informed introduction to a few of the people the client knows. You’re willing to follow-up, particularly if he’ll pave the way for you.
Now here’s how NOT to ask for what you want.
“Do you know anyone who might benefit from my products or services?” Actually you may have tried this already, discovered it doesn’t work, and firmly resolved never to do it again!
Here’s what happened: Anyone meant “everyone.” They ran their mental search engine over a blur of Girard’s 250 people, couldn’t single out a soul, came up with zero, felt a little embarrassed, and promised to think about it more in the future (when they have more time.) Predictable outcome = 0
Alternative: You must provide them with a frame of reference. If client is a golfer, ask if there’s a foursome he plays with regularly. Then, ask –
- “Does anyone in that foursome need ….?”
Not a golfer? then ask:
- “How long have you been involved with your local Rotary club? Are there one or two people who …” You won’t say “is there anyone…” because you don’t want just anyone, you want to set a frame of reference for your friend, and, with his help, pre-qualify the referrals.
“How long have you been: sailing, bowling, flying, collecting stamps. Are there one or two people you know who share your hobby and might be potential referrals for me?”
He knows you support him. Why shouldn’t he reciprocate?
- 7 – Key points for generating referrals from customers. Each will put money in your pocket.
1. Train customers how to network for you. Create a process and an ongoing strategy. (Feel free to give them a copy of this document.)
2. Develop a benefit statement for the product or service you provide. Share it with them. If they’re going to advertise for you, they need to present you properly. And having your clients think about why you’re great has to be a good thing.
3. Teach people how to know if someone they are talking to is a good prospect for you. if you’ve carefully defined your ideal customer, this should be easy.
(For example, my model of the ideal customer for my business coaching business is someone who’s doing excellent work, getting less than excellent results, and is waiting for “word-of-mouth” advertising.)
4. “Frame” or isolate people in the referrer’s mind so that the referrer can “see” them. Give them a verbal picture of your referral.
5. Help them “see” your referrals within that frame.
Exercise: Try this right now. Commit to doing it 5 times.
- Identify a customer, one of your best. How could she or he be a referral source for you?
- Find out if she or he’s willing or not. Be prepared to accept “not!” without resistance and move on. Most will happily say yes.
- Help him/her understand what is a good referral/client for you.
- Ask him/her what’s been successful about your relationship, what s/he’s interested in recommending about you.
- Explore one or more of his personal frames of reference with him.
- Ask him to try your referral requirements on the people in his frame(s) of reference.
- Ask him for 2-3 names, and always! ask him to speak with them first before you follow up.
- Now switch, and reverse roles. Ask him how you can find referrals for him! Fair exchange is no robbery.
- 8 – Referrals from colleagues?
You know people who market to similar audiences but who are not direct competitors. Invite one to find 3 potential clients for you. Agrfee to find three potential clients for him or her. Give yourself a week. Plan to make five calls. Not complicated.
If you can generate one conversation for possibility for your colleague, and one for yourself, you have a big win-win! What would it take to do that every week?
Expectations:
- Expect to feel a little awkward on the first one.
- Expect to feel much more comfortable on the fifth.
- Expect some new business.
Will you tell me about your results? Call Craig Jennings, Business Coach at 516 944-6454 or email to craig@craigjennings.com.
Information:
www.craigjennings.com
www.linkedin.com – search for craig jennings
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