I don’t know many businesses that would say they don’t want more referral business. They know that they are the best source of new clients, have the highest conversion of any lead source, and come at the lowest cost per client. At the same time, most businesses sub-optimize this opportunity. Leaders and producers alike have many questions that generally remain unanswered. How do I get more referrals? Why do my referral efforts fail? How can I get referrals without asking? How can I make it easy to get referrals – for my clients and myself? Let’s answer these questions while exploring the challenges and what to do about it.
Lack of “Refer-ability”
If people don’t trust or believe in the quality of your products, services, or expertise, they are less likely to refer others to you. The same is true if your business provides inconsistent or poor customer service. The remedy is simple, but not always easy to execute. Here’s a simple 3 step formula that works every time:
- Establish your baseline – take this 2 minute quiz to establish how referrable you may be as a start and to identify your areas of improvement.
- Increase your customer contact and get feedback on where you can improve your value to them. Then build a 90 day to shore up any gaps.
- Get focused and deliver on the 4 values of “refer-a-bility” – do what you say, show up on time, finish what you start and say please and thank you.
Lack of a Referral Program
If you don’t have a structured referral program and incentives in place, people might not feel motivated to refer others. In addition, if it is too much of a hassle to refer others, they won’t do it despite wanting to. The top way consumers refer today is through email. That can take 15-20 minutes to properly introduce someone. You need to get that down to less than 2 minutes. What can you do about this?
- Get a referral program that does most of the work for you.
- Build one yourself based on best practices
- Find a mentor that has a system and adopt that
Failure to Ask For Referrals
Often, customers won’t refer others unless prompted to do so. If you don’t actively seek referrals, you will miss out on potential leads. 91% of people would refer if asked yet less than 10% of professionals actually ask consistently. That is staggering and unnecessary. There are lots of reasons why many don’t ask. They usually relate to lack of skills, lack of courage/emotional competence, and false and limiting beliefs. Your plan to solve this should include:
- Get training – this can and should include skill training, emotional competence training, and role play and real play
- Change your mindset- for many it is like you have a map of Boston while driving through NYC. Your map is your beliefs, doubts, etc. The correct map is empowerment. Everyone wants to make a difference in the lives of others. People feel great when they refer others to a valuable resource. Empower them to refer others they care about.
- Get a system that does the asking for you – in personal and authentic ways while also creating the ideal path for conversion of referrals to ideal clients.
Not Identifying your Ideal Referrers
Some customers may be more likely to refer others. Identifying and nurturing these customers can improve your referral rate. Put another way, once you understand who your advocates are, you can put “more chips” down on them to amplify referrals. Here’s your plan:
- Use your own tracking system to determine the 20% that produce 80% of your referrals.
- Build unique nurturing campaigns to increase contact and value to those clients including increased incentives (incentives increase the likelihood of referrals by 50%!) while creating an easy path for them to refer.
- Get a system that does all of that for you – off the shelf
Your customers or contacts might have other pressing concerns and may not prioritize referring others to your business. You likely have too much to do and not enough time to do it. This leads to referrals becoming less of a priority to you and them! You want to create the opposite environment. What can you do?
- Put reminders for you front and center to keep your focus on referrals. Put an index card on your mirror and computer saying “did you empower someone today by asking for referrals?”
- Establish and continuously remind your clients of the benefits to them of referring others. Put a referral link in your email signature, put it into your office signage, and build referral links into all of your communications.
- Create a simple marketing plan focused on referrals.
Lack of Reciprocity
If you don’t reciprocate by referring business to your customers or contacts, they may be less inclined to refer others to you. This is particularly true with your network marketing. Sometimes we need to model the behavior we want or expect from others. For your customers this could mean being a resource broker to them as a value add by introducing them to trusted professionals like a dentist, doctor, car repair shop, etc. For your network, this means learning the profile of their ideal clients, then making strategic introductions to those you may know.
Privacy and Regulatory Concerns
You might be reluctant to ask for referrals if you believe you are violating someone’s right to privacy. In regulated industries, there are referral rules to follow and consequences of misbehavior can be severe. To solve for this:
- Make sure your referral system provides an opportunity to opt out and also provides the opportunity to only contact referrals if they request contact. Ours allows for that.
- Research your industry’s and company’s rules to make sure you are inbounds with your referral program. We work in many highly regulated industries such as financial services, insurance and accounting. We have created a platform that is very compliance friendly and a process for easy approval.
- Make it clear with your customers and network that you honor your relationship with them and that everything discussed is private and will not be shared with their referrals. Trust in that is everything.
To increase your chances of receiving referrals, focus on delivering excellent products or services, building strong relationships with customers, implementing a referral program, and regularly asking for referrals. Additionally, providing incentives or rewards for successful referrals can also be effective in encouraging people to refer others to your business.
ReferMe IQ™ is passionate about helping organizations build high-growth referral-based businesses with their ”state of the art” automated referral platform. Peter S. Velardi is an accomplished senior executive and entrepreneur who has impacted thousands of individuals and organizations to build a fast-growing referral-based business.
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Post author: Peter S. Velardi