Gaining Referrals

Few experienced solo and small office professionals need to be reminded about the importance of referrals for maintaining a constant, if not increasing, flow of clients. For starters, referrals are relatively inexpensive. Requiring little in the way of time or money. More importantly, referrals bring a level of trust and enthusiasm. Someone that the potential new client knows has convinced them that the company’s products or services are worthwhile, so much of the barrier to a relationship is already reduced. In fact, in many cases the client may be begging to get started for whatever is being sold. While a potential sale may only close 10% of the time through traditional channels, it is not uncommon for referrals to close well over 50% of the time, if not higher.

None of that, however, goes to answer the question of how to get referrals. Some may be inclined to think that because referrals have to come from a client that they are nothing to be counted upon in the standard revenue stream. In fact, the opposite is very much the truth. With a few simple adjustments, any company can take the good work it is already producing for its clients and magnify it across the market.

While it may go without saying, the most important step in building the number of referrals that a company receives is to do good work. No one wants someone to come to their restaurant and spread that the food is just alright. Perhaps worse, no one wants a customer who is going to suggest that service is lacking. To achieve a large number of referrals, the company must offer something that causes people to want to talk about it.

Equally important, a company should have a process in place to encourage its clients to offer referrals. Depending on the nature of the company and the products offered, that could take on a variety of different forms.

At the most basic level, getting referrals is about asking for them. After a client has received a number of deliverables that are at a high enough standard, ask them to send potential prospects to the company. Feel free to incentivize this for the existing clients. For example, TV providers often offer existing clients a small bill credit for each new customer that signs a contract for service. The existing client gets a lower bill while the company gets a new client, meaning that everyone wins.

While it certainly helps for the referral program to be systematized like the cable TV referrals, it is not a firm requirement. An accountant working with a firm could simply ask the managing partner if he or she knows anyone else who would be able to use their services and if the client would be willing to put the two in touch.

Taken to the extreme, this could include affiliate programs, which offer a percentage of the new client’s fees as a reward for the referrer. However, this require some amount of caution. For a referral to be truly effective, it is essential that the potential new client understand that the referral is made with their best interests at heart, not the promise of monetary gain. After all, which would be more trustworthy, a website offering an affiliate link to a product, or a social media post from a friend to the same product in question? Chances are that it is the social media post.

Speaking of social media, it can create meaningful ways to achieve referrals, especially for those companies that market directly to consumers. A number of fast food places use this to their advantage, creating hashtags that allow their current customers to post about their experiences with the company’s product. Few people ever click on a sponsored hashtag to see how complete strangers enjoy a cup of coffee. However, it does offer a way for the customer to feel that they are helping the company – though it lacks the formality of a letter of introduction, it is a referral all the same.

Clearly, there are a number of ways to ask for referrals overtly, whether it is simply approaching the project manager or appealing to the masses via social media. However, not every company or professional will feel comfortable giving referrals. For many, there could be corporate regulations that stand in the way. For others, it may be something as simple as not wanting to endorse one vendor’s work as being better than the others. In these cases, it may be worthwhile to take a slightly different approach. Press releases which announce the completion of a project or milestone highlight the fact that two or more organizations have collaborated, and do not inherently create a referral. That said, many of the advantages are there, especially the ability to refer back to a bond and the inherent trust present.

Luckily, most companies are easy going when it comes to gaining referrals, as they see it as an opportunity to pay it forward. Speaking of which, giving referrals should be an essential portion of any plan to get referrals. By supporting a client’s business through referrals, there is not only an opportunity to help out a colleague, but also to see their practice grow. An accountant who refers people to a lawyer will see the lawyer do more billing, which means more finances to be tracked, which in turn means more work for the accountant.

Of course, referrals should be given freely when there is no promise for such direct financial return. In doing so, a relationship mentality is built between the firm and the client. This in turn serves two purposes. The client sees the firm as more of a partner than a vendor, making them more willing to pay higher prices, if necessary. Additionally, because the client views the firm in such a good light, it will see the firm’s continued success as linked to its own.

This idea of a partnership for the purpose of gaining referrals and encouraging other businesses is very much the reason behind a number of professional groups, as companies often have something to offer those who are not their regular clients. Even networking in a less formal setting can enable someone to refer a potential client as a friend rather than just as another ad off of the Internet. At their best, these professional groups become hives of referral swapping, with each member dedicated not only to his or her own success, but that of the other members of the group.

No matter how a company comes about its referrals, there are a few tips that are necessary to make the most of them. First and foremost, it is vital to thank those who offer referrals, no matter what the final outcome may be. The fastest way to lose a source of referrals is to take it for granted – after all, referrals do not come from employees, but instead those who are going out of their way to help another company.

Second, high standards must be kept for both new and existing clients. New clients are the most likely to offer new referrals, but having a long-time client suddenly drop a product or service, or worse yet, explain to others their disgruntlement can be especially damaging.

Finally, the worst time to go finding referrals is when they are needed most for the survival of the business. If a company is in such dire straits, it is best to look at the circumstances that caused the downturn in business. If it was a loss of quality, as is often the case, potential remedies should be examined first. If the loss of profits was caused by something else, then those causes should be identified and mitigated to the best of the firm’s abilities. In the long run, attending to such concerns will help make sure that any new referrals are given the attention needed to become new referees themselves.

Leads vs. Referrals (Quantity vs. Quality)

When it comes to finding new clients, just about everyone who has spent much time in sales knows all too well how big of a difference there is between a well-qualified referral and a lead that is not worth the paper that it is printed on. This is one of the key reasons why it is so important to train your established client base how to identify opportunities to promote your business instead and the proper methods for encouraging their associates to find out how you can help them meet their goals. Let’s take a quick look at the major difference between your typical sales lead and a solid referral.

Sales leads are the very lifeblood of many types of businesses and are the primary purpose of nearly all marketing campaigns. Most businesses obtain their sales leads from a wide variety of sources, such as advertising, customer inquiries and targeted sales lists. While standard leads eventually provide a business with a reasonable volume of new clients, salespeople often find that the leads that they obtain from many types of marketing campaigns are so unqualified that they are barely more effective than cold calling. The truth of the matter is that a mountain sales leads is not a whole lot if it is for people who do not need your services and do not know who you are.

Although a referral can technically be considered a type of a sales lead, there are a few special things about referrals that make them particularly valuable. When one of your current clients refers one of his colleagues to your business, he is essentially vouching for both you and your services. This means that the leads that you receive as business referrals are guaranteed to be much more willing to give your services a try, resulting in very high closing ratio. At the same time, you will find that new clients will be constantly be streaming in once you have put a good referral engine into place, which means that you will be able to spend less time on the phone generating sales and more time focusing on your actual services.

Yes, you will probably always rely to some extent on traditional methods like advertising and other marketing campaigns for a significant percentage of your business, but you will be much better off by viewing business referrals as the cream of the crop. By making referral development the central focus of your marketing efforts, you will be building the foundation for a reliable source on potential new clients for many years to come.

This article is a brief abstract from a core learning module included in a Marketing Jump Start program provided to our association and Power Practice Network members. As a member, you will gain access to our four key courses and Success Tools Pro, which provides a constant update of tools and resources for building your practice.

Social Media Marketing Essentials

While most leaders in the professional service industries continue rely on traditional methods of marketing, a growing number of entrepreneurs have begun harnessing the power of social media to establish themselves as a niche authority figure within their chosen profession. These pioneers have developed powerful referral engines for themselves in the process, while their skeptical competitors sit on the sidelines and miss out on major opportunities for substantial growth.

Of course, time-proven promotional campaigns will continue to dominate the marketing strategies of most professional service veterans throughout the foreseeable future. However, more and more businesses have begun taking advantage of social media platforms that deepen the impact of existing marketing efforts by strengthening their professional network. These services also allow users to keep their finger on the pulse of their profession by providing them with updates on relevant breaking news and promising business opportunities as they develop.

Many medium to large-sized businesses remain apprehensive about social media because they do not want to risk losing control over their brand image. News headlines concerning employees who have posted confidential or compromising information on Facebook and Twitter have raised a number of concerns in the minds of legal and medical professionals in particular. Disasters like these can be devastating from both a professional and a financial standpoint, but such complications can be averted by putting a system of best practices into place that compels team members to use social media responsibly.

From blogs devoted to untapped niches to Twitter streams providing informative links and comments, those who have implemented an effective social media marketing strategy have found these new platforms to be tremendously powerful. The most successful campaigns have included the following three principles in their marketing strategy:

  • Developing a professional niche
  • Building a personal connection with your audience
  • Leveraging your core network to generate high quality referrals

This article is a brief abstract from a core learning module included in a Marketing Jump Start program provided to our association and Power Practice Network members. As a member, you will gain access to our four key courses and Success Tools Pro, which provides a constant update of tools and resources for building your practice.

What is Referral Marketing?

Successful referral marketing requires casting a wide net (Image by Ozgurmulazimoglu)

In a nutshell, referral marketing is the process of developing a reliable network of well established clients who are actively engaging their colleagues, coworkers and friends about the products or services that you have to offer. In the modern marketplace, people are distrustful of traditional advertising because they are keenly aware that a business will do whatever it takes to attract new clients. When they hear about something that they can use from someone they trust, on the other hand, they will extend that credibility to that product or service. Once you have established a solid foundation of satisfied clients that have been educated how to promote your brand, you will have a steady stream of qualified referrals coming in for potential clients who are genuinely interested in doing business with you.

Effective referral marketing begins with two basic components, providing a product or service that people actually like and managing the expectation for referrals. While most businesspeople have an intuitive understanding of the importance of providing a top-notch product, all too many professionals drop the ball when it comes to actively engaging their clients on the topic of referrals. If you are genuinely interested in increasing both the quantity and the quality of the sales leads that come into your business, then the time is now to learn how to start building a referral engine of your own by using a network of existing clients who already know how great you really are.

If you are resistant to the idea of asking your clients to provide you with referrals out of a question of good taste, it is time to reexamine your thinking about the process of referral development. When clients refers one of their colleagues or associates to what you have to offer, they are doing so because they truly believe that your product or service can help someone else reach a particular goal. People enjoy talking about businesses that they have discovered that have provided them with solutions, improved their lives or saved them a great deal out of money. As a result, you are actually doing your clients a favor when you encourage them to spread the word on a product or service that you know that they love.

This article is a brief abstract from a core learning module included in a Marketing Jump Start program provided to our association and Power Practice Network members. As a member, you will gain access to our four key courses and Success Tools Pro, which provides a constant update of tools and resources for building your practice.

Practice Marketing – Tips for Your Referral Marketing Machine

Its only when you actually set up a business that you realize the value of Practice Marketing. Of all the things you learned at business school or law school or med school, was there even one course that taught you how to generate business? Most likely not. But that doesn’t mean it’s a difficult thing to do.

Opinions can be the most persuasive marketing tool

In the midst of all the hurry to print new brochures and flyers and conceptualize advertising campaigns, you may often fail to notice something right in front of you – your existing client base.

So, to get your present clients to refer you, it is crucial that you provide them with an excellent service. Its only when they are convinced of the quality of your service that they will refer you to their families and friends. After all, when they do so, their reputation is at stake, too. Once they are pleased with your system, the referrals will happen automatically without you having to ask for it.

Visibility is the key

If you’ve established yourself as a respectable service provider, chances are you’re already attracting quite a few referrals. If not, perhaps you ought to look at improving your visibility through some Practice Marketing.

It’s not that your clients don’t want to refer you; it’s just that it may not strike them. So, prompt them to do so. Put up a notice at your office saying referrals are welcome; this simple step could do the trick. It gets people thinking of actively telling their family and colleagues about you.

Scout for people who refer your type of clients, those who target a group similar to yours. Then go get your name in front of them. Talk to them to find out how you could help each other. This, in Practice Marketing parlance, is known as setting up referral partners. Like, if you’re a cardiologist, you’d do well to get in touch with some local internists. Don’t forget to follow up regularly, though.

Host a social event

You could look at hosting some social events in your locality. Sponsor it yourself and make that visible. Or find sponsors if you’re looking at making it more lavish; you could even ask your referral partners to join you – it’ll ensure visibility for them, too.

Get your present clients to invite their group of contacts. This helps you to get to know them all personally and is a terrific way to build your business. If a particular area is your forte, try and invite a few prospects who can help to guide you to your target market. If you’re running a carpentry business, maybe you could look at inviting some reputed builders, painters and interior decorators.

Practice Marketing is an art that doesn’t come easy to everyone. But like most other things, it can be easily learnt. Gone are the times when you let your work speak for itself; you now have to give it the right language to speak in.

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