Make it extremely easy for people to refer you
What does this mean?
To answer this you first need to understand the psychology of referring, from the perspective of the person doing the referring.
A referral in essence puts social capital on the line. A person refers you because he wants to simultaneously help out someone in his network, and he wants to look good doing it — that is, he needs to know that the referral will work out well. Because in essence, when someone refers you, he is saying to his network, “I want you to trust this person, and I want you to trust me that this is someone good.”
If he does that and it works out badly, then he has egg on his face. Thus the risk.
So then your job, once you’ve gotten to a point of doing outstanding work, providing amazing service, and building a referral system in place, is to make referring you very easy — as in almost completely risk-free.
Here’s are a few ideas to help you do that.
Yes, you can incentivize referrals. This usually works better when you are dealing with a customer, but it could work with a client as well.
The bare bones approach of it with a client is basically this:
You pay for a customer.
That means if a referral source refers someone to you, and that referred lead converts into a customer, you pay the referrer.
It makes sense, because if you consider the cost of customer acquisition, this is a very small price to pay.
Let’s say you run an event planning business. And you know that typically, an engagement with one client leads to an average of three engagements through the year.
Well, if a typical engagement brings in $5,000, then you know that each customer is worth about $15,000 to you (3 engagements through the year at $5,000/engagement). So you could strike up a deal with a potential referral source to pay them the value of the customer’s invoice if they convert. You pay $5,000, and then make $10,000.
Any CEO or marketer or ad man on the planet will tell you if you can spend 1 dollar and make 2, then that’s a business. If you scale that out, the sky is the limit.
Another incentive structure is to incentivize your customers to refer their friends to you. This usually takes the form of “Refer four people to us and you get a year of free haircuts.”
ING Direct, where I bank, will pay me $100 if I refer a friend. That’s because ING knows how much each customer is worth, and you can bet it’s a lot more than $100.
Offer a free consultation
Another way to mitigate the risk on a referral is to make it clear that your initial meeting is a 100% free consultation. That way the referrer doesn’t get stuck telling someone to trust you, and now their friend has to put up with a hard sell.
Equip them with tools they need
As always, make sure the person referring you can easily point a potential referral to your work, via a website, a portfolio, etc.
Ask and you shall receive
Okay. Let’s get into how to ask.
The first thing to do is set the expectation at the very beginning of an engagement that if you do a great job, and they love the work,
Here’s how you do that:
YOU: “Great, I’m really looking forward to getting my hands dirty on this project. At the end of the project, if I do an outstanding job and you just love the results, I’m happy to offer similar results to people that you know. Assuming you love the work, is that something we can talk about?”
CLIENT/CUSTOMER: Sure, of course.
You’ve given a highly conditional statement (“If… then…”) which basically makes it easy for someone to say yes, and you’ve established from the very beginning that referrals are something that you do.
So. You’ve set up the expectation. Awesome. Now you’ve completed the project brilliantly, provided superb service, and you’ve delivered it to your customer. Whether that’s a new website, a wedding cake, a customized car, whatever. What do you say?
First, reiterate the value you’ve given them:
YOU: “So to recap quickly, since we’ve worked together, you have seen X result to help you with X benefit, Y result to help you with Y benefit, and Z result to help you with Z benefit. Is there anyone you know and trust, who is also looking to achieve X, Y, or Z, or you think could use a hand with their xyz [area where you provide value]?”
YOU: “Would you be willing to introduce me to him?”
Here’s a real-life example. Let’s say you’re a physical trainer, and you’ve come to the end of your six sessions with a client.
YOU: Well, Terry, great work today. Since we’ve worked together on your health and fitness, you have dropped ten pounds of body fat, which helps you have increased energy, greater health, and look great in clothes. You’ve increased your bench press by 20 lbs, which has improved your core strength and protects you against injuries. And we’ve improved your run time by 2 minutes, which has widely positive increases across your entire body, including increased energy and better brain function. Not bad. If you’re open to it, is there anyone you know and trust who is unsatisfied with their health and is looking to make a change?”
CLIENT: Oh yeah, there’s blah blah blah…
YOU: Would you be willing to introduce me to him?
Create a referral network with strategic partners
I touched on this in the last post, but a powerful way to increase your referrals is to create a referral network.
That means you make an agreement with a group of other business owners to refer each other business.
If you’re a trainer or gym owner, striking up a referral network with:
- a local orthopedic surgeon
- a local sporting goods company
- a local health food store
Seems like a no-brainer.
Here’s how you do it:
- Contact the owner of the biz you think would be a good fit.
- Sit down and figure out ways you can add value to his/her biz
- Actually add value by delivering on that thing you’ve identified.
- Stay in touch as you do this across 3 or 4 other businesses
- Then, once you have a few people built up, introduce the idea to them:
YOU: “So one thing I’ve been doing over the past 4 months is really connecting and helping out complimentary businesses, in order to build a referral network. I’ve already got John Smith, owner over at XYZ Acme, Peter Smith over at ABC Acme, and we’re excited about this. I wanted to invite you to join it. It basically works like this:
- If someone comes in and you sense that they would benefit from my service, you refer them to me. I’ll do the same. And Peter, and John will do the same. That means where once we had zero people referring us, now you’ve got 4 or 5 professionals referring people to you. We can track who comes from where by using these little cards I printed up. What do you say?”
Any business owner on the planet would be thrilled with this arrangement.
Provide a free service to a complimentary business
This ties in loosely with the above point, but you can increase your referrals by providing a free service to a complimentary business.
If you are a health food caterer for example, you can partner with a local gym and offer 1 free meal for each new gym member. The gym owner loves that because that’s a calue-add on what he can offer, and it exposes you to THE GYM OWNERS ENTIRE CUSTOMER BASE, which is a huge swath of highly qualified leads.
This may very well be the most epic post on referrals ever written in the history of the internet. But do not just read it. Implement it. Go forth and prosper.