Friday, June 05, 2009

Are you Referral-Aware or do you have a Referral Strategy?

I was discussing referral strategy yesterday with someone I had, appropriately, been referred to by a client. The company are a sales-focused company with a strong referral awareness, yet it became apparent that despite that awareness there is no strategy. That shortcoming is potentially leaving a lot of business untapped.

What was very interesting was the fact that well over 50% of new leads generated comes from cold-calling and, when asked, he was unable to name the company's top referral sources. While the company is referral-aware, the activity they follow is simply asking for a couple of referrals at the end of the meeting. Every member of their team knows that they need to do this yet, as I have discussed elsewhere, while that approach will produce some results, it is far from the most effective tool available.

Towards the end of our conversation we talked about the best ways and times to inspire our clients to refer us.

"It's interesting", he said. "We only ask our top clients to refer us once, and that's when we first meet."

A good referral has two key elements.

- Someone has to have a high degree of trust in you to refer you with confidence. The more they trust you and want to refer you, the more likely they will and that their referrals will convert and you will retain the ongoing business.

- The person referring you knows who you are looking to meet, why they need your help and how you can help them. In short, they understand how to recognise and convert opportunities to refer you.

When you first start working with a client the levels of trust and understanding are a long way short of where you hope they will be as the relationship between you matures. Asking just once, at the start of the relationship, misses the opportunity in two big ways. They are asking when people are less likely/interested in referring them and they are not asking when people like them enough to help and know how to.

Who in your network, or among your clients, knows, likes and trusts you enough to refer you, yet you never ask them? How many people have you asked for referrals before they've had the chance to build that trust or really understand your business? How successful were you?

It's not enough to be referral-aware. You need a referral strategy, or you'll be leaving business untapped and money on the table.

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