Referrals Archives - Page 10 of 10 - Dr. Ivan Misner®

A Referral Is a Referral, Right? Wrong

A referral is better than a cold call because you have the name of the prospect and, if you’re fortunate, you can use the name of the referral source to open the door. What more could you hope for? Actually, there’s quite a bit more you can expect from referrals that have been properly developed by their sources.

You see, all referrals are not equal.  Referrals come in many different grades and they vary in quality according to how much involvement your referral source has invested in preparing the referral for you.

Here are the first three levels of referrals:

1.  Name and contact information only. This isn’t much better than having just a name to call.  It only indicates that your referral source has done just enough work to provide you with a phone number, address or some other way of contacting the prospect.

2.  Literature, biography and company information. When a referral source offers to give a contact your marketing literature or other information about your business, all you can be certain of is that the prospect will see the materials.  The prospect’s interest in your product or service will depend solely on the impact of your marketing message.

3.  Authorization to use name. Once a referral source has authorized you to use her name, you can feel fairly certain that you’ve established a good level of credibility with her.  By allowing you to say that she endorses your product or service, your source has given you valuable leverage with the prospect; however, the problem with this level of referral is that the burden of developing the prospect still rests on you.  Once you’ve conveyed that your referral source recommends you and your business, the task of selling really begins.

Think about the referrals you’ve gotten over the past couple of months.  Now, think about which referrals fall into each of the three categories above.  I’d love to hear your comments about the different results you’ve gotten from level 1, level 2 and level 3 referrals, so I encourage you to post your experiences below.

I’ll tell you more about level 4 through level 6 referrals next week; and in two weeks, I’ll get to the really good stuff . . . level 7 through level 10 referrals!

Simple Recognition Is Sometimes the Best Reward

Rather than receiving a finder’s fee, for most referral sources  it is more important to be recognized as a person who can direct others to the goods and services provided by skilled, highly competent, trustworthy people.

Over the years I’ve witnessed time and again that most people will do more for simple recognition than for money. However, for those who expect a finder’s fee, this is a good thing to know in advance if you want to keep the relationship healthy, active and profitable.

You will find that different motivators will inspire different members of your referral team, and this is a matter in which understanding the various behavioral styles of people can be helpful.

People who are embarrassed by being in the spotlight, even for accolades and applause, might prefer their rewards low-key and private–perhaps a simple thank you or an evening cruise on your boat if you are a boat owner.  Those who like public recognition might prefer seeing their name showcased on your bulletin board.  Still others may be more highly motivated by an inexpensive but thoughtful gift than by a more substantial cash reward–a bottle of wine from a winery near their hometown or a coffee table book about their favorite travel destination.

The point is, simple recognition really resonates with most people and, more often than not, simply recognizing people in the way they prefer to be recognized is a far better reward and incentive for them to refer you to others than offering them a cash finder’s fee.

If you’re in the habit of recognizing people as a way of thanking them for referrals, please leave a comment about what’s worked for you and even what hasn’t.  Then check back next week to read my story about a way in which someone recognized me that kept me motivated to refer that person over and over again!

The Nature of a Referral Relationship

Over the years, I’ve run into countless people who believe that joining groups and organizations and becoming active by volunteering, taking on responsibilities and working side-by-side with other people on a common goal will cause people to get to know them and refer business to them.  However, this is not how things work.

Granted, it’s easy to think that if you rub elbows with someone long enough he or she will spontaneously start sending you business opportunities. But that’s really nothing more than an entitlement mentality.

Getting referrals usually takes three things: visibility, credibility and profitability.  Ordinary participation in an organization, even a strong-contact referral group, will get you visibility and perhaps some credibility; it won’t automatically get you profitability.  That takes a much more focused approach, along with some explicit talk about the kinds of referrals you want.

By nature, referral relationships are rewarding and valuable when they are created purposefully and by design. If you are assuming that the idea of giving you referrals is going to pop into someone’s head spontaneously if you hang around long enough, you are definitely misunderstanding what a referral relationship is supposed to be.

Woody Allen once said that “90 percent of success is just showing up,” but he wasn’t talking about referral marketing.  “Just showing up” will get you a seat at the table, but you have to pass the food to others and snag your own steak whenever it comes around.  It’s not “netsit” or “neteat“–it’s network!”  If you want to build your business through referrals, you have to learn how to deliberately work the networks to which you belong.

You see, participating in a group is one thing; performing is another.  To get referrals, you have to perform.  If you don’t perform–talk specifics about your business, your specialties and your ideal referral, and refer business to others in your group–how are they going to know what you do and what you need?  You have to take specific actions to let people know how they can refer business to you.  Being a good citizen is the right thing to do, but it’s not enough to get you the referrals you need to run your business by word-of-mouth marketing–you need to actively feed and water your referral relationships, so to speak, in order to significantly grow your business through referrals.

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