Levels of Referrals Archives - Dr. Ivan Misner®

What’s the Difference Between a Weak Referral and a Quality Referral?

I’m often asked by people whether or not it’s possible to distinguish the difference between weak referrals and quality referrals. The answer is YES. 

There are varying levels of referrals, starting at a level that’s just one step above a cold lead. These types of referrals are ranked in quality from lowest to highest. Number one is the lowest-ranked type of referral (the least desirable) to give and receive, and number eight is the highest (most desirable). You can use the referral level rankings below to help distinguish quality referrals from weaker ones.

1. Names and contact information only: Getting the name and contact information from a referral source is better than nothing—but not much.

2. Authorization to use name of referral source: This indicates you’ve established good credibility; however, the work of developing the prospect still rests with you.

3. General testimonial statement and/or letter of recommendation and introduction: This is a noteworthy accomplishment, and it demonstrates that the referral source trusts you.

4. Introduction call: This takes the effort on the part of the referral source up another notch and paves the way for communication from you.

5. Note or letter of introduction, call and promotion: This implies an even higher level of commitment on the part of the referral source. It is an outright recommendation of your business accompanied by a description of its features and benefits.

6. Arrange a Meeting: Here your referral source is acting as a facilitator for you. This conveys to your prospect that your referral source has a deep trust in and approval of your business.

7. Face-to-face introduction and promotion: Your referral source is now actively engaged in selling your product or business, rather than just being a meeting facilitator.

8. Closed deal: After your referral source has described the features and benefits of your product or business, he then closes the sale. This is the highest level of referral you can achieve.

Now that you have a good understanding of the difference between a weak referral and a quality referral, think about the referrals you’ve been giving to others recently . . . are most of them more similar to the type of referral outlined in number one (in the list above), or closer to number eight?  If they’re closer to number one, think about how you can start giving referrals that are closer to number eight because, the fact is, when you consistently generate stronger referrals for others, they’ll be more inclined to generate stronger referrals for you.

So, how might you focus over the next few weeks on increasing the quality of the referrals you’re giving?  Please share your ideas in the comment forum below.  Thanks!

 

Referrals Are Not Equal

Last week I wrote a blog explaining that all referrals are not equal and that there are different levels of referrals.

The more time and effort your source puts into qualifying, educating and encouraging the prospect before you become involved, the higher the quality and level of that referral.  In level 4 through level 6 referrals, the quality of the referral is higher than level 1 through level 3 referrals.  Here’s why . . .

Level 4: General testimonial or letter of recommendation. Getting a referral source to say or write nice things about you is a major accomplishment.  His willingness to communicate positively about you and your business shows that you’ve built a moderate level of trust with him.  Of course, testimonials and letters of recommendation are fairly common in the business world, so their impact on the average person is limited.

Level 5: Letter of introduction and promotion. This is the first level of referral that truly involves a modicum of effort on the part of your referral source.  Unlike the letter of recommendation, which requires little more than a written endorsement, the note or letter of introduction implies a more substantive relationship between you and the referral source, and it usually includes background information and a description of your product or service as filtered through the lens of the author.  It also implies that the prospect will be hearing from you.

Adding the element of promotion increases the effectiveness of your referral source’s effort on your behalf.  Promotion is advocacy–an outright recommendation of your product or service with a description of its features and benefits.

Level 6: Introductory call and promotion. Another level up in terms of effort is the referral source who makes a personal phone call on your behalf.  It takes preparation and effort, but a telephone call from your source is more effective than a letter for paving your way to communicate with the prospect.  Including a promotion makes it even more favorable.

If you’re given a level 1 referral, you still have to do 95 percent of the work to close (which is not much better than a cold call) so the referral levels listed above are definitely more desirable than the referral levels I wrote about last week.  However, what you really want to get is a level 9 or 10 referral because with those, the person giving you the referral has already done most of the work for you.

Come back next week to find out the difference between referral levels 7, 8, 9 and 10–as I promised last week, this is where it gets good!

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!

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