Do you ask for referrals?

Word of mouth has always been considered the best way to bring on new Clients. You should never ignore the importance of Client satisfaction. There are dozens of factors contributing to the success (or failure) of your business and Client satisfaction is one of them. It’s important to track this factor and work on improving it in order to make your Clients more loyal and eventually turn them into Advocates.

I’m not here to tell you how to run your business, from what I’ve heard about the LBDGroup members, you are doing that rather successfully already.

However relying solely on word of mouth is leaving money on the table.

According to Bill Cates ‘Get More Referrals Now’ most sales people/small business people don‘t ask for referrals for several reasons;

  • They don’t think about it as being a core function to their business development
  • They’ve never been taught how to gain referrals
  • They are afraid to ask – it might damage the Client relationship

It’s such an astonishing thing to me! We have so much untapped potential with our current Client base. In fact, according to Business Health Survey, 84% of Clients would be happy to refer their Provider/Adviser/Supplier and yet, on average, only 30% do. Why?

It’s all about positioning the discussion in a natural and recognizable way. Showing your Client you are going above and beyond helping people more than you currently do.

You are clearly a progressive forward thinker; being a part of the LBDGroup. Yet thinking your expert reputation is enough to compel your Clients to talk about you and your business will not generate any new leads. Most Clients need prompting and encouragement.

When measuring Client referral results through word of mouth, best practice seems to level out at around 25%. Meaning 25% of your Client base has referred you to their network.

What percentage of your Client base has referred you in the last 12 months?

Imagine if that could be 50% or 70% – what would that do to your new business revenue?

To go from 25% to 50% you will need to establish a step by step referral process. A referral process that gives you qualified referrals to people verified for needing your particular product or services.

Before you do that you need to develop the right mindset around this topic – asking for referrals is not being desperate for business, it’s not something your Clients will be awkward or uncomfortable with. It’s OK to have a conversation with a Client about the prospect of you being able to help their friend.

Engaging in a conversation with your Clients around the value of your relationship can start the process. One needs to reflect now and ask yourself this question; Why would your Client want to refer you to their network?

Robert Cialdini in his book ‘The Psychology of Persuasion’ summed it up very well; Every time your Client refers you to their friend/colleague and a good outcome is achieved, it confirms their decision to put their faith and trust in you in the first place.

Your Client and their friend/colleaguewill now be talking about your expertise together to further perpetuate your reputation and open up further opportunity for you to ask for more referrals.

If you are able to devote time and energy to this topic and establish a referral process/system you will be somewhat unique. According to the Ric Willmot Survey 2011 by the Executive Wisdom Consulting Group; 73.9% of businesses do NOT have a formalised referral system in place. Most leave referrals to chance!!

Bill Cates in his book ‘Get More Referrals Now’ talks about value recognition. It is quite logical that if value has been delivered to your Client, that same value can be shared with others.

Seek from your Clients what they value the most in their relationship with you to build a referral platform. Once they state what they value the most from your relationship/service you will be able to ask them who they know who could also benefit from the same value.

Having discussions with your Client about what they value about you is extremely powerful. You may be surprised by some of the answers. The important thing here is you learn how they truly feel about your business; not what you think they value about you.

Be aware this process takes time to perfect in everyday Client conversations. It won’t happen overnight but once achieved it will be natural course of doing business.

Things to consider in the process;

  • Which Clients should you approach first
  • Role play the value question with a colleague
  • Paint a picture of the sort of new Client you are seeking, so that your Client can relate to their network.
  • Open up a conversation about people your Client knows and cares about
  • When names come forward ask the questions. Why did Tom and Sue come to mind? How do you think they could benefit from a discussion with me?
  • Do not under any circumstances call the referral until your Client has spoken to their friend/colleague so they expect the call and understand from your Client why they have been referred to you
  • Coach your Client on how to have the introduction conversation with their friend/colleague
  • Ask your Client – What do you think you will say to your friend about why I can help them?
  • Be sure to report back to your Client on how you went with their college/friend (without breaking confidentiality of course). Not providing feedback, will ensure no further referrals from that Client

Once a consistent referral process is followed with every Client conversation, receiving qualified referrals will be routine in your business. To ensure success it could be practical to seek outside help.

Making your Client the primary focus by allowing them to determine who in their network would most benefit from your services empowers your Client and further develops your existing Client relationships.

David Phelan

David Phelan has considerable experience and expertise in the Financial Services Industry. His techniques and processes of referral marketing have been endorsed by the Financial Planning Association through regular referral generation workshops for FPA members. David’s focus on the broader financial needs of all people in the general public offers Financial Services Professionals clear direction in identifying and qualifying the needs to ensure it is converted into new business for all referral partners.

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