There is a reason you’re not getting all the referrals you think you should get. The problem is that your clients will never, EVER tell you what that reason is.
You’re probably getting referrals now. Most businesses are. Yet, when we surveyed over 1000 professionals, they overwhelmingly believed they could be doing a lot better.
And for good reason…
The New York Times noted in an article that 65% of all new business in the United States comes from referrals.
That’s a HUGE number. Think of all of the advertising that’s done. All of the money spent on those ads only generates 35% of new business.
So referrals are clearly important.
Nielsen—the research firm—found that referred prospects are 400% more likely to become your client, than prospects from cold advertising.
Yet, when asked, nearly 80% of professionals say they have no system or process for getting referrals.
The 3 Lies Business Owners are Told About Referrals
Unfortunately, the conventional advice we’ve all been given on referrals isn’t very helpful…
First, there’s the ”Do great work and you’ll get referred” advice. It sounds reasonable, but here’s the thing. In our research—we’ve surveyed over 1000 business owners—the second most common complaint sounds like this:
”We do great work. Our clients are happy and they tell us they love us, but it’s really frustrating…they rarely refer.”
The problem with the “do great work and they’ll come” advice is that it relies on the hope that your clients will remember to mention you if it ever comes up in a relevant conversation.
Great when it happens, and it does happen, but it’s hard to build consistent cash flow and growth off of “hope.”
Second is the ”Ask every client, every time you see them” advice. Again, it’s not bad advice, but there’s a problem…
The #1 barrier to getting referrals, cited by business owners, is the fact that asking for them makes both you and the client uncomfortable.
There’s good reason for being uncomfortable using the old referral methods, too…
You’re asking a happy, paying client to give you something…in the form of a connection, a relationship, they have with someone.
You’re “taking” value from the relationship with your client. You’re asking them to swallow some risk (because if you mess up the referral, it’s their relationship that will suffer) and there’s virtually no upside to your client.
It’s hard to refer you because it’s high-risk. You’re essentially asking your client to send someone they care about into a sales meeting with you.
I don’t know about you, but I sell for a living, and I don’t like going to sales meetings where someone else is doing the selling.
There’s built-in sales pressure in every referral because the first interaction you’re asking for is usually a 1-on-1 meeting with the potential client. This pressure prevents happy clients from taking action to refer you.
Third, there’s the ”You can’t control referrals” myth. You can absolutely create a process that consistently delivers great referrals to you. The key word is process. If you leave it to your clients and hope they’ll refer, you have no control.
You can proactively create a simple process to generate a predictable number of referrals every month, without killing yourself to attend every networking event in town. (In fact, you can probably cut back and have some more time with your family.)
The Real Barriers to More Referrals
The first and biggest barrier is one we just mentioned—the sales meeting, and the sales pressure it places on the whole process.
Sure, you want to get a potential client into a conversation about working with you, but putting a high-commitment step right at the start of the relationship guarantees that your referral flow will be disappointing.
To fix it, you’ve got to replace the sales meeting with a low-commitment, high-value first step. Our approach is to use what we call a Referral Kit™—a tool I describe in depth in my book.
If you'd like a summary, download a copy of our "Referral Blueprint."
The second barrier, is that what we’re asking our clients to do is simply too hard.
If you stop and think about it, we want our clients, or as I like to call them, your unpaid and untrained sales force, to find prospects for you.
Yet, the most difficult task in every business is prospecting for new clients.
Most professionals don’t enjoy doing it and aren’t as effective as they’d like to be, and still we expect our clients to prospect for us.
The old way of doing it, which usually sounds like this: “Do you know anybody who needs (insert your service)?” puts all of the prospecting burdens on your clients. The results are predictably bad.
The third barrier is a big one. Let’s say you’ve asked your client to refer you to three people. They’ve agreed and they’ve even identified the people to refer to you.
Now your client must have three sales-like conversations to convince those potential clients to take the high-commitment step of meeting with you.
If you’re naturally good at sales, this may never have occurred to you. But you can bet that, for your clients, this kind of conversation is a difficult one.
So what’s the answer…?
How to Remove the Barriers to More Referrals
The overall answer to more referrals is to make the whole process easier for your clients (and your referral partners/centers of influence). Let’s look at three ways to do that…
Stop “taking” and start “giving”
Remember, we’re trying to cultivate great relationships with future clients, so it makes sense to be the leader, and deliver value in advance of the sale or engagement.
The challenge is doing that in a way that costs you very little in terms of time, energy, and money.
That means, in most cases, whatever value you deliver can’t be packaged in a 1-on-1 meeting with you. They don’t scale up well, and as we’ve already seen, they add unnecessary pressure.
The key is to package up information that educates a potential client on four things:
- The problems, challenges or opportunities they face.
- The consequences of those problems, challenges or opportunities.
- The first step of the solution to those consequences. (This is important…people don’t spend money to solve problems. We all have problems we’re not willing to pay to solve. They only spend money when the consequences are no longer tolerable.)
- How to take a next step with you.
By packaging up your “sales message” in a way that can be shared by your clients and partners easily, without the pressure and risk of a sales meeting, you’ll create much more referral opportunities.
In fact, our clients often see an immediate jump from just a few referrals a month, to 20-50 by using this approach.
Do the prospecting for them
The second big success factor in creating consistent referrals is taking over the prospecting from your clients.
The truth is, it’s your responsibility as the business owner anyway. You know who you want as a client. Why leave it to chance.
We use a method called The Reverse Prospecting Gameplan™ to show clients a specific set of prospects that they’re likely to know. This one little “trick” dramatically improves results.
Use it, and you’ll find that clients who’ve never sent you a referral before are suddenly able to connect you with 5 or 10 or 20 people.
Approach the process with “Purity of Intent”
The final piece of the puzzle and the one that clearly tells your clients that you’re doing all of this unselfishly is what I call purity of intent.
Your clients can sense if you’re doing something because you’ll benefit from it. And, they can tell that you’re doing something because you really want to create value for others and have an impact.
They get it…they know you’ll get business and that’s OK. But they can sense your real motivation.
If you’re on a mission to help the types of clients who really need your help, and you’re sharing really valuable information in your Referral Kit to further that mission, they’ll help you. (This takes all the pressure out of the referral conversation.)
They want to help you. They want to refer you. It’s just far too hard if you’re doing it the old way.
You only need to ask yourself if you’re happy with the number of referrals you’re getting, for proof that the old way doesn’t work.
I’ve written an entire book on our new approach to referrals called Unstoppable Referrals: 10x Referrals, Half the Effort.
If you’d like a summary, I’ve put together a short “blueprint” presentation of our referral process.