3 Steps to Take After Receiving a Referral

Posted on by Scott

digits-705666_640I couldn’t believe what I was hearing.

A teller with a leading community bank (a former employer of mine) had sent me an email, saying she wanted to speak with me for a few minutes. She was looking for referral advice. Naturally, I expected her to ask for tips on making referrals. Perhaps she wanted help on identifying referral opportunities. Maybe she wanted some assistance in identifying the appropriate time to bring up the concept of a new product or service with her customer or acquaintance. Or maybe, I thought, she’s struggling to find the right words to use and wants to bounce some ideas back and forth. I certainly was not prepared for her actual request.

“Scott,” she said, “making referrals is hard. I’m shy and it takes a lot for me to speak up and suggest my customer consider an additional product.” I agreed. After all, making referrals is a leap of faith. You’re opening yourself up to potential rejection. Customers might not welcome the intrusion and, depending on how the conversation transpires, mistake the referral for a high-pressure sales pitch.

She continued, “I do it anyway, though. We all do. We love our customers and know a big part of our job is finding other ways the bank can help them.” I was pleasantly surprised at her level of commitment and encouraged her to keep at it. “So, what part of the referral process can I help you with?” It was her answer to this question that threw me for a loop.

“We’ve been sending a lot of referrals to the lender at our branch,” she said, “but he never follows up. I just spoke with a lady I referred to him last week. When I asked how their conversation went, she told me she’d never received a call from him. She wound up going to another bank for the loan that I suggested she look into. One of my coworkers told me that she has the same problem and has actually started sending her customers to a lender at another branch who always follows up. I hate to do this, but I also hate looking bad when my own go-to person doesn’t seem to appreciate the referral. What should I do?”

Referrals represent the holy grail of marketing. What better way to generate new business than to have other people selling for you? How better to qualify prospects than to have partners making one-on-one recommendations to people they’ve identified as great candidates for your product? And how much easier can it be to overcome the credibility barrier when the recommendation comes from someone the prospect already has a relationship with and trusts?[Tweet “Referred customers carry a lifetime value 16% higher than the norm.”]

Referrals are timely, targeted, and carry no upfront costs. Furthermore, referral leads convert at a rate 30% higher than those obtained through any other type of marketing. Add to that the fact that referred customers carry a lifetime value 16% higher than the norm and it’s easy to see why smart business owners attempt to leverage this strategy as much as possible. But sadly, 48% of referred leads never make it to the next step of the sales cycle.

Referral marketing only works when referrals are acted on. Without follow up, referrals don’t turn into sales. They turn into poor service experiences, disappointed customers, frustrated referral partners, and missed opportunities.

When you find yourself the fortunate recipient of a referred lead, take these steps right away.

  1. Act on the lead. 50% of buyers choose the vendor that responds first. The sooner you follow up on a referral, the more likely you are to actually get business from it. You need to act while the prospect is thinking about taking the next step, and the propensity to buy is highest right after a quality referral is made.
  2. Deliver exceptional service. Referral leads should be treated delicately. The expectation of performance is high – after all, you did come with a personal recommendation – so make sure to shine. Even if the sale doesn’t close, your interaction with the lead impacts your reputation as well that of the referring party and the organization. The way you follow up on any given referral can influence how many more come your way.[Tweet “The way you follow up on any given referral can influence how many more come your way.”]
  3. Follow up with the referrer. Thank them for sending someone your way, even if things didn’t work out. Let them know how the conversation went and, if necessary, provide any tips for better qualifying prospects in the future. The more you develop this partnership, the more likely you are to see additional referrals come your way.

Of course, if you’re not interested in referral business, simply ignore these steps. In fact, ignore any referrals altogether, just like this banker did. Feel free to thumb your nose at a strategy virtually guaranteed to provide a steady stream of qualified business to your doorstep. Just don’t be surprised when all that business winds up being referred somewhere else.

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What strategies have you found most useful for generating referrals? Share your tips on our facebook page.

10 Tips for Better Referrals

Posted on by Scott

human-763156_640re-fer-ral (noun) an act of referring someone or something for consultation, review, or further action.

Growing a business is hard. Unless what you have to offer is cutting-edge, standing out from the crowd can be a grind. And let’s face it, most of us aren’t selling something truly innovative. We sell commodities, a product or service that’s readily available from another provider. For us, finding a way to differentiate yourself from the competition can prove difficult.

There’s plenty of evidence to suggest that word-of-mouth advertising is one of the most effective methods of generating new business. It’s certainly the most economical. If generating referrals isn’t a significant part of your marketing strategy, then you’re missing out.

In my experience, people think of referrals in two ways. With the first, employees interacting with existing employees make note of an additional product or service the customer isn’t taking advantage of and suggests they take action to fill the gap. In the second, customers and business partners are encouraged to proactively approach members of their network on behalf of the organization, recounting their positive experience and suggesting their contact give them a try.

Both referral scenarios can add significantly to your pipeline, but in my experience, few people are comfortable with the referral process. They hesitate to make referrals and, when they open their mouths to speak, the words don’t come easy.

But it doesn’t have to be this way. Making referrals, like any other business activity, is a learned skill. All it takes is the right attitude, the right approach, and practice. Here are 10 tips to help you become a master at referrals. Let’s start with ideas for referring additional products to an existing customer.

1. Think of referrals as a service rather than a chore. Your customer or contact is missing out on a valuable product or service. You have knowledge that could help them solve a problem. Why are you holding back? Referring someone to a product, service, or colleague that could benefit them is not just good business, it’s a part of providing good service. What better way to take care of those who already trust you enough to business with you than to share information that could prove valuable to them?[Tweet “Making referrals is not just good business, it’s good service.”]

2. Study up on the subject of your referral. People often hesitate to make referrals because they aren’t confident in their own knowledge of the product or service in question. If you find yourself unsure of whether or not you are competent to speak to the quality of a product your own firm provides, don’t make the referral. Educate yourself first, make sure you know enough to speak intelligently before opening your mouth.

3. Refer to the expert. By definition, a referral is made by someone who cannot complete the sale themselves. If I can complete the sale, then my conversation with a prospect is a sales call, not a referral. Referring is the act of suggesting a connection between two other people, meaning you are not required to answer every single question the customer might have. That’s the expert’s job. While it’s important to know something about the product or service that sparked the referral idea, what you are really referring is someone else’s expertise. Don’t refer to people you don’t know. Make sure you can vouch for the expertise and character of the person you’re looking to send your contact to.

4. Refer selectively. Not every customer you come in contact with is a candidate for a referral discussion. Make sure the customer could actually benefit from the service you’re thinking of recommending. This is made easier if you’ve been listening for cues and looking for clues during your interaction. Don’t machine-gun spray your customer list. You’ll come across as insincere and lose credibility.

5. Speak to what you see. Something caused you to think about making a referral to your customer. Start by mentioning that trigger:

  • “Mr. customer, from what you’re saying, it sounds like you could benefit from …”
  • “According to our records, you’re not currently taking advantage of …”
  • “After our last conversation, I got thinking about your account. I think we may be able to help you even further…”
  • “You know, a lot of my customers have said they really appreciate the way we helped them with…”

6. Speak naturally. When the time is right to make a referral, speak as if you’re talking to a friend. Think about the last time you tried a new restaurant and shared that information with a friend. You didn’t slide into a fake, infomercial type spiel. You spoke on a personal level. You shared your experience and knowledge, then suggested your friend try it out for themselves. That’s what a referral should sound like – one friend trying to help another one out.[Tweet “A referral should sound like one friend trying to help another one out.”]

Now, let’s look at a few tips for encouraging referrals from others.

7. Educate your customers and business partners. You can’t assume that just because people know who you are and what you do that they will be comfortable referring business to you. Make a point to educate those around you. Share bits and pieces of information when appropriate so they feel educated enough to confidently speak to your expertise. Give them a story worth relating to someone else.

8. Make it easy for others to refer business to you. Most people like making referrals. Personally, I get a great sense of satisfaction when I connect two people I know in a way that helps them both out. As your customer, I’d like to refer business to you. The problem is, I don’t know everything about your particular product suite or the myriad of services you offer. However, there is one product I am intimately familiar with – the one you sold me. Make sure every new customer gets a couple of business cards and ask them to pass them on to people who could use the same service they are currently benefiting from.

9. Make referrals yourself. You have to give to receive. If you want business partners to send referrals your way, start by sending a few in their direction. Sending me a referral creates psychological pressure on me to reciprocate. When you help me out, I want (and need) to do something for you in return. Prime the referral machine by making a few deposits of your own. [Tweet “Prime the referral machine by making a few deposits of your own.”]

10. Ask for them. If you want more referrals, ask people for referrals. Business is rarely a case of “if you build it, they will come.” If you want something, you have to ask. “Hey, if you come across someone who could benefit from what I have to offer, do me a favor and hand them my card. I’d appreciate the referral.”

There’s one final tip I’d like to share for those seeking to earn more referral business. Be someone worthy of a referral. Do good work. Produce a superior product. Provide excellent service. Operate with integrity. Seek to be the kind of person others want to be associated with. If you focus on building solid relationships, you’ll have more referrals, and more business, than you can handle.

If you’d like to have a discussion regarding some specific referral strategies for your business, give me a call. If you have strategies that have proven successful for you, please share them on our Facebook page.

JOIN THE CONVERSATION:

What strategies have you found most useful for generating referrals? Share your tips on our facebook page.

Lead Like Santa Claus

Posted on by Scott

MerryOldSantaI was looking through some files this weekend and came across my notes from a webinar I attended a few years ago. It was entitled “The 10 Branding Secrets of Santa Claus.” According to presenter Steve Miller, these very specific and deliberate actions provide Santa Claus with “uncopyable superiority.” I love that term.

As I listened to each point Mr. Miller made, I couldn’t help but think about the potential that lies within each business. I believe we are all in a unique position to provide a level of service and partnership to our customers that simply cannot be rivaled by the competition. Those who choose to capitalize on their strengths and outhustle the rest always rise to the top. And so I thought I would share these points from the presentation with you.

The 10 Branding Secrets of Santa Claus

  1. Santa manages expectations. If you’re good, you receive gifts. It pays to listen to Santa Claus.
  2. Santa makes a BIG promise. Compare gifts given for any other holiday – they just don’t compare to the expectations surrounding Santa’s visit.
  3. Santa facilitates referrals. Everyone talks about Santa. Parents even send their kids to him.
  4. Santa creates long-term relationships. Year after year, people turn to Santa with their Christmas wishes.
  5. Santa owns the date. From a business perspective, December 25th is Santa’s day.
  6. Santa delivers an experience. My daughter Abby is 15. She’s known “the truth” about Santa for a long time. But she still gets super-excited every year. And I do too.
  7. Santa owns a color. Who else wears a red suit, cruises around in a red sleigh, and totes a giant red bag?
  8. Santa looks different. You’re not going to confuse Santa with anyone else. Attempts to copy him are laughable.
  9. Santa reinforces his myth. Stores invite kids (and adults) to visit Santa. New movies are made about him every year. Even NORAD tracks his progress! He makes it easy for everyone to buy into his brand.
  10. Everything about Santa walks the talk. Everything about Santa – his North Pole workshop, the elves, the reindeer, the milk and cookies by the chimney – reinforces his story and his brand.

I hope each of you are as excited about 2015 as I am. I hope these observations stir your imagination. And I look forward to working with each of you as you catapult your business into a position of “uncopyable superiority.”

Merry Christmas!