‘Nothing influences people more than a recommendation from a trusted friend. A trusted referral is the HOLYGRAIL of advertising.’
Mark Zuckerberg, Facebook.
People influence people, that’s why word of mouth marketing is the most trusted marketing method today. But what do we mean by referrals? It’s all about encouraging people you know to introduce you to others who may want to work with you; after all people who expect your call will take your all.
Some referral ‘fast facts’:
- 15% of clients will never refer you
- 75% of clients will refer you when asked and
- 10% of clients will refer you without even being asked
In his book ‘Winning Sales Referrals’, Bruce King notes that referrals are much less stressful than cold calling, a relationship built on a referral is much easier to initiate when you have some common ground to discuss. Referrals can be very powerful, research shows that sales cycles of opportunities resulting from referrals is significantly shorter than the average, reducing the cost of sale while simultaneously showing increased customer lifetime value.
But asking for referrals can be challenging for some, there’s always the fear of rejection, or waiting for that ‘right’ moment, but often it’s simply because there is no process to follow and no accountability for doing something that should be part of your job.
Here’s some actual results from my referral journey
- 100% of people I have asked have given me a referral
- The average number of introductions I have been given is 3
- 10% of people referred have not responded to me
- 24% of people referred have not become clients
- 40% of referrals have become clients
- An increase of annual closed won revenue by 35%
My recommendation is to develop your own process, something that works for you but here’s an example of what I use, some of the steps were influenced by the work of Bruce King (2012).
Mindshop’s ten step referral process
- Create a profile of your best clients: the most profitable clients who are fun and easy to deal with and have been a good source of referrals. Describe their niche if they operate in one, then detail the major benefits you bring to them.
- Are you referrable?
We’ve created a diagnostic that reviews gaps in our current referral process and to create actions for improvement. I’m not suggesting you go to this extent but have a think about where you can improve based on this list of ten steps. - Proof of capability: provide referrers with evidence that you can do what you say you can do. This might be in the form of testimonials, case studies or videos. But don’t forget to include some good solid facts, statistics of how you have made a difference to their business.
- Accountability: What you can measure, you can manage. Set yourself a referrals target per month and get someone to hold you accountable for achieving this goal.
- Profile your perfect prospect (PPP): What does your future perfect client look like? Create a profile that includes geographic region, size, turnover, number of employees. Delving down into the niche and market need. Make sure you have a clear value proposition for being able to solve the problems that are typically found in businesses in this sector. What opportunities can you present to them to help improve their business performance?
- Who will you ask? There are typically three types of people that you want to bring into your referral program: the connector, a person with confidence in you who enjoys matchmaking and networking, their network of contacts is broad but they may not have large amounts of influence. The key influencer, a person who possesses greater than average potential to influence others through personal persuasiveness or frequency of communications. These people tend to have smaller, deeper networks. And finally the advocate, a raving fan who loves your product.
- Create your ‘ask script’: often people ask too much or are too general in their requests, be specific. Here’s an example: “Hi Fred, I like to spend my time looking after my clients, not looking for them, so I would really appreciate your help please. Would you mind if we took a few minutes to brainstorm who else you know (you might want to outline your perfect customer here) that you could introduce me to?”
- Create a profile that your contact can use to introduce you: make it easy for the person doing the referring, give them a script to send on to their contacts. It might contain information about how they know you, what you do, what you have done for them and whether it’s ok for them to pass on contact details to you.
- Create a ‘thank you’ system: Choose a genuine, personal and thoughtful way of saying ‘thank you’ if someone does refer you. Wine, chocolates and flowers are great, but you could also think outside the square and buy tickets to a show or an experience like sky diving.
- Maintain a book: Finally, I like to keep a little black book with me at all times with the names and contact details of my referrers in it. It keeps the process at the top of my mind, and also those who have referred me before are more likely to do so again.
One final thought, if you treated every customer as though your main purpose in serving them was to generate a referral, what would you do differently to help them?
If you would like to discuss any aspect of this article, please contact me on gburn@mindshop.com
Further reading ‘Winning Sales Referrals’ by Bruce King, http://www.bruceking.co.uk/winning-sales-referrals/
