How Do You Encourage Referrals?

by Joan Friedlander

Matt Lawrence from Biznik, an online network for entrepreneurs, sent an email to his network asking for a response to 3 questions about how to invite referrals from other entrepreneurs.

Having worked with hundreds of self-employed service professionals to develop their "human-to-human" marketing system for the past 9 years, I know that asking for referrals is tricky business for most of us. The process is much more similar to connecting directly with potential clients than most people think. It's ALL about the proverbial "know, like and trust" equation. 

I don't know if this is what Matt was looking for, but here is how I answered his questions.

1. How do you invite referrals from other entrepreneurs?

The answer to this is very similar to answering how do you “invite” clients? You do it by first establishing a basis for “know, like and trust.” These allies are either people in your own profession who don’t do the same work you do, or other entrepreneurs who offer a different set of services to the same “target client.”

Step 1: Identify the characteristics of your ideal client.

Step 2: Identify in which industries referring entrepreneurs are likely to work.

Step 3: Develop an introduction to your services that make it easy for potential referral sources to tell others about you.

Step 4: Develop an earnest relationship with people who could refer you to your ideal client:

• Introduce yourself – online, at a networking meeting, via some other connection
  
  
• Invite a conversation – ask about their work and tell them about yours
  
  
• If the connection is good and there seems to be mutual interest in supporting each other, invite or ask that person if they would like to establish an alliance. Ask, based on what they have learned about you, if they think are likely to meet or know people who would benefit from your services. Tell them if you can do the same on their behalf. This way, there's a greater chance that this will be a real opportunity for both of you, not something born from politeness that has little chance of materializing.
  
  
• Clarify what is a good referral for you and what is a good referral for them. Talk about how to best make the introduction.
  
  
• Keep in touch!!!! This step is often omitted. Whatever the time table, whether it is once a month, once a quarter of once every 6 months, call to ask how things are going and/or invite to an event and/or invite to meet for coffee.

2. If you were convinced that giving referrals would result in your getting them back, how much time could you spend each week taking care of your referral relationships?

I say this is not the best framework question. It puts the attention on receiving. I have seen this backfire a number of times. If you are always looking for the return you’re likely to be disappointed.

Yes, the best referral relationships are mutual, but they are not always one way and timing is certainly unpredictable (they will not know when they’ll meet up with potential clients for you). Seek to be of assistance to others, first, and trust the same will come back to you. By going through the steps outlined above, you are more likely to be successful.

To be more direct in answering this question, I say it’s less about time and more about consistency and quality. It only takes a few hours a week, maximum, to establish a routine around a good referral strategy: identify, connect, meet, keep in touch.

Most service providers can’t handle a slew of new business every week or even every month. The answer lies in understanding how many referrals you can handle, and how many potential referral allies you can manage. In my case, I’d say 2-3 hours a week would most certainly be enough.

3. What do you think would be the best tool for you to manage those referrals, so that you could generate more of them?

A good, functional, Customer Relationship Management (CRM) system. The choices are many to choose from these days. It just has to work for you and your needs.

 

by Joan Friedlander, © 2011. All rights reserved.