GlobalBX

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. A referral strategy, regularly executed, can make a colossal difference to your bottom line.

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 specific practice of getting an abundance of referrals for your small business.

1. Isn’t it true that our good friends and 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. Note to the CEO – “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 represents 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, low in cost, and take advantage of the connections and relationships 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 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. Meanwhile, while we pursue new 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 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?”

Key Points For Generating Referrals From Customers

1. Train customers how to network for you. Create a process and an ongoing strategy.
2. Develop a benefit statement for the product or service you provide.
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.
4. “Frame” or isolate people in the referrer’s mind so that the referrer can “see” them. You do that by providing them a frame of reference.
5. Help them “see” your referrals within that frame.

Exercise: Try this right now. Commit to doing it 5 times.

1. Identify a customer, one of your best. How could she or he be a referral source for you?
2. Find out if she or he’s willing or not. Be prepared to accept “not!” without resistance and move on. Most will say yes.
3. Help him/her understand what is a good referral/client for you.
4. Ask him/her what’s been successful about your relationship.
5. Explore one or more of his personal frames of reference with him.
6. Ask him to try your referral requirements on the people in his frame(s) of reference.
7. Ask him for 2-3 names, and if he’s willing to speak with them first before you follow up.
8. Now switch, and reverse roles. Ask him how you can find referrals for him! Fair exchange is no robbery.

Expectations:

– Expect to feel a little awkward on the first one.
– Expect to feel much more comfortable on the fifth.
– Expect some new business from your five calls.

Will you tell me about your results? Contact me.