What Every Business Owner Needs to Know About Referral Prospecting

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I have been in the industry for well over 30 years as an advisor, senior leader, trainer, and business owner. It is fascinating to me how so many sales professionals and businesses continue to struggle with referral prospecting and client/customer acquisition in general. The great irony is that is easier than ever!! With just a little better understanding of the modern consumer, proven practices, and new techniques that leverage technology – every business should have “ideal clients/customers” chasing them. Top businesses are doing that now. Here’s a brief primer on how you can too.

What we know:

  • 83% of consumers would provide referrals – if asked!
  • Consumers prefer to be referred to a professional as the #1 way to engage
  • Less than 1/3rd of businesses have a repeatable and professional system for obtaining referrals
  • 90%+ of High-Value Consumers use social media regularly
  • Acquiring targeted “ideal clients/customers” remains the #1 challenge for businesses
  • Communication preferences have changed dramatically – email, text, and then phone as preferred methods. 

So let me understand this. Consumers want to be referred. They want to refer and help out others. Targeted clients/customers are online with more accessibility and transparency than ever before – yet businesses still struggle to acquire referrals. Why is that and what can you do about it now? Let’s examine the reasons why it seems so hard, what needs to happen, and discuss some immediately implementable solutions.

Top 4 reasons why businesses don’t optimize referral prospecting:

  1. Lack of focus – referable business, marketing plan
  2. Lack of a system – repeatable and scalable
  3. Low readiness – skill, will
  4. Emotional competence – doing it face to face can be awkward, and involve fear

Additionally, what are the “conditions for success”?

  • Targeted clients/prospects must know you are referable and seeking referrals
  • You must create an easy and trustworthy path for them to refer others to you
  • You must ask – in a way that consumers want, and specific to who you want as “ideal clients/customers”

So, given what we know about consumers, businesses, and optimal conditions for success – what can you do now?

  1. Put the disproportional focus on referral prospecting:

–       Make sure your business is referable! Show up on time, do what you say, say please and thank you, and build referral awareness into your office signage, signature line in emails, business cards, referral cards, website, etc.

–       Develop the winning referral attitude – good people want to help others, and I am obligated to facilitate that, ideal clients/customers should be working with me, I am letting everyone down if I don’t make that happen.

  1. Implement referral systems that don’t require high skill or emotional competence (the focus of most training). Lots of great training out there – I have led many programs myself. You should try to become great at this. However, as a starting point – there are some easy ways to get this done so you won’t need massive skill and courage or to augment your skill and courage when you have it (most have it at times). There are 2 systems that you can use right now that result in targeted clients chasing you:

–       Manual Referral System. Lots of best practices here for businesses, including how to ask, when to ask, prompt for reminders, and development of a referral tracker. If you’d like to learn more about this, contact us.

–       Automated Referral Systems.  The best systems are easy to set up, they leverage technology and email to achieve scale and repeatability, and they work for both consumers and businesses.

The best I have seen in the market is the ReferMeIQ system.

  1. Get help. Human nature is hard to beat. We want to do what produces pleasure and avoids pain.

As a result, it is hard to maintain focus and make good decisions in the presence of emotions and challenges. Hire a coach, find an accountability partner, work with leaders in your organization, and learn what top businesses are doing to today with technology and modern best practices. You don’t need to go at it alone! We are happy to help as well! 

Post author: Peter S. Velardi

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