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5 Easy Steps to Consistent Referral Generation

Want to know how to receive consistent referrals?

Most small business owners know that referrals are the best and most cost effective ways of finding new business. However, very few know how to make that happen and even fewer still know how to make it happen consistently. According to Heinz Marketing, “companies with formalized referral programs experience 86% more revenue growth over the past two years (previous two years of the survey) when compared to the rest. And yet, only 30% of companies have a formalized referral program.”

As a small business owner, you may not have a formalized referral program, but understanding the principles that make consistent referrals possible and creating a system that implements that is crucial to consistent and sustainable business growth. There are 5 fundamental steps necessary to generate referrals on a predictable and consistent basis.

Trust

The foundation of referral is trust. Trust that you, the service provider will treat the referred client well, satisfy their needs and even delight them. This is by far the most important of all the steps and it is critical for all business, especially if you want an ongoing referral from your source. The degree of trust may vary depending on the perceived long-term impact and (perhaps) the personal nature of the service. So, the question is not if you need to build trust, it is how are you going to build trust with your referral sources if you want to build a business based on referrals. Here are some simple ways to start to build trust with potential referral sources.

  1. Connect. Make every effort to connect in person, if possible.
    • Meet with them one to one and learn as much about them as you can.
    • Find out their interests and areas of commonality between you that will make it easier to relate.
    • Be truly interested in them instead of trying to be interesting to them.
    • Of course, connect with them on social media.
  2. Support. Find out how you can support them in their business or their interests.
    • Ask the all-time important question, “how can I help?” and mean it.
    • Follow them on social media and provide supportive comments on their posts and articles, if applicable.
    • Find out what they are passionate about and find ways to contribute to the course.
  3. Be credible. Be worthy of the trust you’re trying to build.
    • Keep your promises.
    • Be on time and be present where you are.
    • Always follow up, even if only with a thank you note.
  4. Demonstrate excellence. If you have an opportunity to provide your service to the individual, do the very best. If you demonstrate excellence at what you do and provide an exceptional experience, it becomes a lot easier to promote you.

Trust takes time to build, yet it’s fragile and can be shattered in no time at all. Trust in a relationship is analogous to a bank account. A typical transaction is either a deposit (building your account) or withdrawal (depleting your account). Similarly, when building a new relationship, most of your actions will either strengthen the trust or weaken it. So pay attention to your actions.

Knowledge

By this, I mean an understanding of what you do. In order to have another professional refer you to their friend, family or colleague with confidence, they need to be able to describe what you do without feeling uncomfortable. It is your job to make it easy for your referral sources. You can make it easy by doing the following.

  • Teach them how to describe what you do in the simplest language possible.
  • Show them what makes you different from the competition. That is, what is your unique selling proposition (USP).
  • Teach them how to bring you up in a conversation with a prospect and what questions to ask. 
  • Tell them how to introduce you and what you’re offering for a meeting. This could be free half hour consultation, free website audit, free or low cost webinar, free evaluation, etc.
  • Provide your business card and marketing materials, if applicable.
  • If you can provide your referral source with an experience of your service, even better.

Need

A potential referral exists only where there’s a need. The need may be obvious and well known to the prospect or may be one uncovered as the referral source asks relevant questions. Regardless of how the need surfaces, the prospect must be convinced they have a need that requires attention. You as the service provider must educate your referral source on how to identify a need that requires your service. It could be by listening to a prospect’s complaint, watching for physical evidence or asking questions that uncover the need. 

Sure, there are some needs that will be obvious, such as a complaint about back pain could easily lead to a referral for a chiropractor or a complaint about paying too much in taxes could be an opening for a referral to an accountant. These are passive referrals opportunities. They are not predictable and therefore you cannot rely on them for consistent referral generation. One of the keys to consistent referrals is teaching your referral sources to be proactive in uncovering needs without being pushy. 

Your referral sources may find it helpful to have a few questions they can ask prospects they suspect may need your service. If your source is in your contact sphere, that is, their business is complementary to yours, you may ask if they would incorporate your questions in their client intake form. That way, all their new clients will be asked the leading questions and some will end up being referred to you.

Solution

As important as it is to correctly identify a need, it is not enough to secure a referral. The source must be able to present the service provider as the right solution to the problem or need. In the example of a prospect complaining about paying too much in taxes, it may be obvious that they needed a new accountant, it is however, not obvious which is the right one. They may have two or more in their network. The question is, what makes you the right one for them? Will your referral source be able to articulate that convincingly?

A good understanding of your key business practices by the referral source is very important here so they can make a compelling case that you’re the right solution (if indeed you are). It can be even more powerful if they had experienced your service and can truly say it was outstanding.  

You need to equip your referral sources to confidently show the right prospects how you’re the professional they need to solve their problem. Can they make such a compelling case that the prospect can’t wait to connect with you.

Connection

The last step in the referral giving process is connecting the prospect with you, the service provider. The source has done the hard work of uncovering the need and presenting you as the solution provider. Now the connection must be made the right way and on time, while it’s still top of mind for the prospect. 

You may be surprised how many times the ball is dropped at this final stage. One way to drop the ball is by simply handing the provider’s business card to the prospect and asking them to call. Some will but most will not. It’s not because they don’t want to, they just get busy with business and life and forget. So, don’t ask your referral source to simply give out your business card.

The best way to connect to the prospect is to have your source introduce you to each other. If possible, have the source set up an appointment for all three of you to meet in person where he/she will formally introduce the prospect to you and vice versa. This is most powerful but not always possible. A three way phone or video introduction is a good alternative to an in person meeting. Finally, an email introduction can also be very effective. 

Let your referral sources know your preferred method of connection but allow them and be open to what is convenient for them.

Conclusion

Referrals are a great source of business but consistent referrals can transform your business growth and change your life. It is rooted in cultivating and nurturing trusting relationships while providing the basic skills needed to find referrals for you. If you want people, especially other professionals to refer business to you, not just once, but over and over again, you have two overarching responsibilities. 1) Make it easy for them to refer you.  2) Make them look good by exceeding the expectations of the referred client. Your source will be proud and happy to refer to you again and again. 

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Get Invited to Our Chapters

Experience our proven referral system in action. People just like you working together, helping each other grow their businesses and improve their business skills.