Maximize Your Referrals

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My wife and I met with our financial advisor Karl earlier this week.  We spent an hour reviewing the performance of our portfolio, re-clarifying our personal investment goals, and discussing our estate-planning situation.

Karl is thorough.  We have the utmost confidence in his work and the firm he is associated with.  In addition to the “business” part of the meeting, Renee, Karl, and I talked about our children and their interests.  The time went by quickly.

As we were finishing up, Karl thanked us again for a past referral we had sent his way and also asked us if there was anyone else who we might feel comfortable referring to him.  Karl told us that when his clients referred other clients it saved him prospecting time.  He went on to say that this enabled him to spend more time working for us.  It all made sense.

It is always easier to sell a referred client.  There is already implied trust.  The client is more open and willing to look at the value you offer and evaluate if there is a good fit.  One referred client is worth ten cold leads.  Getting more referrals is all about asking questions.  The best in the business know who to ask and what to ask for.

You should always ask your current clients for referrals.  There is a natural flow of conversation that will enable you to receive more referrals from your current clients.  Toward the end of a meeting with a regular client or after the sale with a new client ask a “confidence” question.  You may ask, “Have you been satisfied with the work I’ve done for you?”  Or, “Does this look like we’re moving in the right direction?” Or, “That was a little easier then you thought, wasn’t it?”

Basically, you are trying to get your client to agree that they are glad they are doing business with you.  Then, you simply say to them, “My business is built around positive relationships.  I truly value our relationship, and I greatly enjoy serving you.  Do you know of anyone else who may have similar needs as you?”  The word “may” in the last sentence is critical because your client might feel that they do not know for sure if someone would need your product or service.  You want to make your client feel as comfortable as possible recommending you.

Give them a reason to help you.  One reason could be because they like you.  They are helping a friend.  We all want to help our friends.  Another reason could be because you offer a gift for referrals.  Some businesses offer a gift certificate for dinner at a nice restaurant as an incentive.  Another company I know has a formal referral program that pays $50.00 for every referred prospect that makes a purchase.  Karl’s statement about our referring clients left him more time to serve us was a great comment and provided us a tangible reason to refer someone to him.

All businesses are different.  What might be appropriate in one business would not be in another.  A home improvement company could pay $50 or $100 to a customer for each referral.  They could send out referral cards twice a year asking for those referrals.  This could be a significant marketing program for them.  They are many variations of this that my clients successfully use.

However, someone in the financial services industry would approach the situation entirely different.  Everyone should ask for referrals.  How you handle the procedure will vary by industry.

You can also ask for referrals from people who do not buy from you.  Let’s say you work with a prospect, but maybe the timing isn’t right for them.  At this point in time they choose not to move forward.  But, you have developed a good relationship.  They feel positive about you.  Ask them for a referral.  You might say, “I understand that the timing isn’t the best for you right now, and we’ll stay in touch as we move forward.  By the way, do you know of someone who may have a similar need that would be a good fit for me?”

When you ask for a referral you may want to be specific with regards to a “target” for your client to think about.  Don’t just ask if they know someone.  Give your client a target.  Your question may be, “Do you have any relatives that could use a similar service?”  Or, “Do you have a relationship with someone in a similar position as you with a different company that may need this same product?”

By giving your client a target when you ask the question it helps them think of people.  You can move from one target to the next in the course of your conversation.

Say “thank you” for your referrals.  Always call and thank your client when they refer someone.  It does not mater if the referral buys from you or not.  You want to reward your client with positive praise for what they have done for you.  Your client will be more willing to refer someone in the future if you positively reinforce this great habit.

It may also be appropriate for you to send a thank you card and, or, a gift to your client.  Good taste always prevails here.  The last time I sent Karl a client I received a thank you note, a phone call, and a gift certificate to the finest restaurant in town.  I wasn’t expecting anything in return for my referral.  I believed that I was helping the person I was referring as much as I was helping Karl, but I did appreciate the thanks Karl sent my way.

Asking for referrals should be an ongoing part of your daily business.  Ask people who buy from you and people who don’t.  People like to help others.  If someone believes in you and your abilities, they will be willing to lend a helping hand.  Grow your business through referrals and you will save marketing time, explode your bottom line, and be on the road to Building a Better Biz! 

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