Savage and Greene

What's a "Referral" Anyway?

Most people in sales believe a "referral" is when an existing client or colleague sends prospects their way with a warm recommendation.

This happy picture is further enhanced by the idea that referrals happen without much effort. Gee, that does sound nice. So how come it doesn't happen often enough for you?

There must be something wrong with you. After all, all the other kids are getting referrals, aren't they? Yes, you better go find some worms because you are a sham in your profession and nobody likes or respects you, probably not even your current clients. But before you head down to the local bait shop, here's a little reality check. Do Your Clients Talk about this Stuff?

Look it up: "Referral" means "to send or direct someone for information or aid." What this means, grasshopper, is…

The topic has to come up.

So, reality check number 1: How often does the topic come up?

If you sell something that people like yourself buy, you can run a direct reality check. Financial services is a good example:

In the normal course of everyday life, how often do you and your buddies chat about bank accounts, investment advisors or retirement planning?

If the answer is that the topic doesn't come up all that often, that tells you it's unlikely you'll get lots of referrals. But that's not because you are doing something wrong, it's just a given of your market.

If you sell something to people you don't normally hang out with, you'll have to do two bits of research:

Ask your existing clients how often in the last year they talked about services like yours to people in other organizations. (Ask them to come up with a number.)
Ask some non-clients about the same thing: How often in the past year have they talked with colleagues in other organizations about services like yours. (Also ask them to tell you where they would start if they were looking into products like yours.)

Again, if the topic just doesn't seem to come up all that often, that indicates the number of referrals will be on the low side.

Critical Mass

Now onto the next reality check. Let's say the topic does come up fairly often. How many clients do you have?

In general, people in sales don't get many referrals in the first two to three years; often longer. This is partly a function of gathering more and more clients over the years:

As the pool of clients grows over time, the number of times the topic comes up grows too.

The other reason it can take two to three years for things to roll is because a lot of referral business might not come from clients at all.

Colleagues Rock

There are many lines of business for which most referrals come from colleagues, not clients. This wonderful exchange is generated by networking.

Your professional network can be chock full of friends who have clients in need of your services. Or you may have great working relationships with competitors who refer business to you because you're a better fit or they can't cover it.

Of course, you'll have to be a good networker in order to have plenty of these referrals coming your way, which brings us to reality check number 3: Remember that happy picture of referrals rolling in with no effort on your part? It will happen. Sometimes.

But if you're not getting as much referral business as you'd like, you'll have to get off your tush and ask for it.

How to Ask

Clients: Give them a call, take a deep breath, and ask them who they might refer you to:

"I'd love to have more clients like you. Would you do me a favor and introduce me to others who might be open to talking with me?"

"I've got some room on my plate. Do you by chance have contacts in some local companies you'd feel comfortable introducing me to?"

"Say, I'm in prospecting mode. Do you have a few names and numbers I might call to see if they might be in the market for my services?"

The key is to ask for referrals and then be quiet while they think. Don't jump in to fill the ensuing silence too quickly.

People in your network: Invite them to meet with the express purpose of talking about each other's business. Ask for descriptions of who makes a good prospect for them, and be ready to do the same.

In both cases: Be sure to keep reaching out to have that conversation; even when you have great relationships, even when you don't get referrals and even when colleagues don't call you. (Some people are more proactive networkers than others.)

Don't Wanna? Lots of people are nervous about asking for referrals. What if clients see such requests as rude? What if they don't actually value your services enough to refer you?

Well, what can you do when you are wondering how clients feel or what they think? Ask them!

"Would you think I was being rude if I asked you for referrals to potential clients?"

"One of the best measures of client satisfaction is a willingness to refer. Are you happy enough with our services to introduce me to others who might be interested in them?"

Ah, but what if you are rejected? Well, surely you need to know if your clients aren't happy so you can work on it. Besides, it's far more likely that they are happy but making referrals isn't a natural part of their world. Unfortunately, many will come up with a blank even when asked. (Go ahead: think of three people you can refer to your dentist right this minute.)

Not to worry, with luck and persistence you will find at least a few clients who can and will think of referrals. If not, remember that people in your network will often refer more business than clients; especially the buddies who wear a sales hat.

Uh oh…what if those colleagues think you're too needy? What if they don't actually respect you enough to refer to you?

My goodness, if that's the case you should go get new colleagues-you're hanging with the wrong crowd.

Still nervous? One way to get over it is to ask for referrals until you are used to it. Another way is to simply leave referrals out of your marketing plan. (You'll still get referrals; they will be gravy.)

Beware of "Should" and Absolutes

It is very common people in some industries to be told they "should" get most of their business from client referrals.

It's also quite common for people who have been in business for a long time to proclaim they get all of their business from referrals, implying that you should, too.

The truth is, your market may or may not be conducive to a lot of referred business. Even when referrals are likely, it may take several years for your client and network base to generate a lot of referrals.

In general, using direct marketing tools will give you the fastest results. Of course, you may want to include asking for referrals as part of that. Hopefully you now have useful information to make that determination yourself.