Improve Referrals by Understanding This Science
Every business should be able to generate enough referral business to meet their needs. However, many businesses get a trickle of referrals instead of a "flow" of referrals. How do you unclog your referral pipeline? You need to better understanding the Science of Referrals, which includes WHO will give you referrals, WHY they give them, and HOW to arrange the meeting with the referral.
This can all be explained with the Referral Triangle. There is only one way to get a referral. Someone must say something nice about you when you are not around and someone else must find that motivating enough to want to take action and meet you. Think of a triangle with you at the top, the referral source at the bottom left and the referral at the bottom right.
The problem faced by many professionals is that they do not have enough, or any, referral sources. To solve this challenge, you must briefly change your perspective. Put yourself in their shoes. What is the Motivation to send you referrals? Because you are nice? Because you need money? Because you offer a $25 gift certificate? Each of those may be accurate, but all of them combined are seldom enough to motivate someone to send you a good prospect. Seriously, how many times have you collected $25 because it motivated you to send someone a referral?
Who is motivated to send you referrals? Other business professionals just like you want to grow their business. They are motivated to send you business if they are receiving referrals from you. They are called Strategic Partnerships, Referral Partnerships, Referral Groups, or a variety of other descriptions. You have probably heard of them before because they work. However, they only work IF they are done properly.
Now let's assume you have found a referral source who is motivated to send you referrals. Is it time to start cashing the checks? Not yet. What does that person say about you to the potential referral? Believe it or not, I know of more than one situation in which a long-time friend (ie: college buddy) was a referral partner and he would share stories of their college drinking escapades. Although the stories were entertaining and he meant well, the potential referral was not impressed.
You have to make sure that your referral source is sharing the Message that you want shared. Otherwise, the potential referral will have no interest. What should the message include? First, it must create curiosity. The message "He is an insurance agent" does not create curiosity and the listener is not going to respond with "Wow. Can I meet him?"
Second, the message must be memorable. Not only does your referral source need to remember it, but you want every listener to remember the Message and think of you. Third, it must be different. Again, if your message blends into the barrage of marketing every consumer is subjected to, then it is nearly impossible to convert the listener to a referral.
Your referral sources have Motivation and you have equipped them with a fantastic Message to share. Now it is time for the Meeting with the referral. Which of the following would you prefer to hear from your referral source?
1. "I got a referral for you. I met him yesterday and gave him your phone number. He should call you."
2. "I got a referral for you. His name is Bob Jones and his number is 212-555.1212."
3. "I got a referral for you. Can you meet him and me for breakfast next Tuesday morning at 8:00am?"
If you answered "#3" then you are pretty smart. Studies have shown that your closing ratio is 20 times higher than referrals like #1 and five times higher than referrals like #2. Work with your referral sources to generate the type of meeting you want to have with a referral. Use a system that generates an introduction to your referrals instead of just a name and phone number.
If you do not follow this advice, a few referrals will continue to trickle through. However, if you accurately implement these suggestions into your business, you will be amazed at the flow of referrals you can create.
