Referral marketing is the most effective form of advertising. However, many approach referral marketing with an “Old Faithful” attitude. All they have to do is just show up weekly to their networking events and referral business to them will simply erupt regularly like this geyser. What they do not realize is that once their trust in you evaporates, so does the water. In referral marketing, your trust and your reputation are on the line all the time. Therefore, you need to do what you say you are going to do. You need to be professional and do what you can to not ruin reputations with others.
When you give a referral, you give away a little bit of your reputation.
While giving a good referral will enhance your relationship, a bad referral will hurt it. This is extremely important when referring someone to your client or customer. If the person you referred does a poor job, your relationship with your client will suffer. You may even lose that customer due to the lack of trust they now have in you for giving them that bad referral. Now the geyser is dry.
Therefore, the biggest risk in referral marketing is not the person you are referring to someone. The biggest risks are the referral giver’s reputation and the risk to their business relationships with others. Get to know the people you are referring to others. Find out as much as you can about the services they offer. Plus, make sure they have integrity. If you do not take the time for this, your reputation is at risk. Finally, never give good referrals to people who do not want them or cannot handle them with the same integrity and professionalism you use with your clients. Do not be this guy. You do not want to refer someone to your client, and your client is expecting a geyser. However, the only result your client experiences is a dripping faucet in the middle of the night instead.
Everyone can Ruin Reputations
However, I am not saying that you accept 100% of the blame and responsibility for the bad referral. Referral marketing is more than just you. Everyone is involved in a threeway referral relationship. The person being referred to your client can do himself permanent damage by performing poorly or dishonestly. He agreed to a service contract or sales transaction with your client. What expectations has your client had in the past when working with you? You can share these same client expectations you experienced with the person you are referring to your client.
Even your client has some responsibility for the bad referral. Your client needs to clearly explain to you the exact service, product, or assistance they are looking to you to help them to find the right person to refer to them. Therefore, their expectation should be reasonable. If they are looking for a “small fountain” when discussing the possible referral with you, they should not be expecting a “large geyser” later on when working with the referral. However, they should also not be receiving a “little drip” either. Especially if they prepaid for the “fountain”.
Even Old Faithful is not as faithful as it used to be.
Tourists visit Yellowstone National Park in (mostly) Wyoming, USA every year to see the Old Faithful Geyser for its frequent and somewhat predictable eruptions. Rumors claimed that the eruptions occur hourly. People speak of the average time between eruptions. This is misleading and these rumors could ruin reputations with the tourists expecting to view the geyser based upon an exact schedule of when the geyser will erupt next. The mathematical average between eruptions of Old Faithful is currently 74 minutes, but it doesn’t like to act average! Intervals can range from 60-110 minutes. The world’s most famous geyser, Old Faithful in Yellowstone, currently erupts around 20 times a day. These eruptions are predicted with a 90 percent confidence rate, within a 10-minute variation. I do love a good statistical report to end a story.