Author’s Note: Over a period of several years, I have written several articles on “referrals without asking.” www.billgoodmarketing.com/real-referrals. I also posted a link to a webinar “How to Get Referrals without Asking.” A deep understanding of the “real referral” process is necessary for you to have a growing referral-based practice. Start with this article. But then pop over to my “real referrals” page. Go through my webinar.
Every sales manager since the dawn of time has told you, “Your problem is you don’t ask for referrals. Our studies have shown that 85% of our clients would give a referral if asked. Only about 3% of your clients provide a referral, so you are not asking enough. When you speak with clients, ask each of them for the names of people you could contact today.”
So you set out to do it — or not, because it just does not feel professional.
Advice is abundant. Just Google the phrase, “how to ask for referrals.” Enjoy these gems.
“Act like you are already in their circle.”
“Don’t feel sheepish about asking for referrals.”
“Always ask for referrals in person.”
“You mentioned your sister and brother-in-law last week. Let’s start with them. Do you think they should at least know about what I do? Can we craft a way for you to introduce me to them that will feel comfortable for all concerned?”
Just reading this makes you want to clean your eyeglasses or get the smudges off your monitor.
You know down deep that this stuff does not work. People whose names are solicited rarely become clients. Why? Because they are not referrals. They are just names, and perhaps only slightly better than cold-call names.
Plus, consider this “benefit:” You hate the process so much that you rarely if ever discuss referrals. Your clients may not be aware you accept additional business. Sad.
What Is a Referral?
Merriam-Webster: A referral sends someone somewhere, often for help or advice.
Your dictionary: Telling someone about the positive features of a person or a business or the person who is being referred.
Wikipedia: Referral marketing is a process to encourage and significantly increase referrals from word of mouth, perhaps the oldest and most trusted marketing strategy. This can be accomplished by encouraging and rewarding customers, and a wide variety of other contacts, to recommend products and services from consumer and B2B brands, both online and offline.
Bill Good: A referral is a name of a person who needs financial help volunteered by a client.
A “real referral” occurs when your client Bob calls and says, “I want you to call my sister-in-law. I spoke with her yesterday. She said she is inheriting some money from her Aunt Martha. She has no idea what to do with it. I told her she needs a good financial advisor and said I would have you call her.”
(Related: 33 Cold Call Truths You Need to Know)
Isn’t that what gets your blood racing?
Since the beginning of time, sales managers, coaches, gurus and others have assumed the way to get more of these names is to ask. But if my definition is correct—that a referral is a name volunteered—asking does not generate referrals, it only generates names.
So quit asking for referrals: Get more clients to volunteer them.
Referrals Without Asking: Part I
I can summarize my strategy to get your clients to volunteer more referrals in seven words: Advice, TOMA, Engagement, Promote and Thank You.
Sadly, these words don’t make a good acronym, though maybe ATE PTY may help burn them into your mind. Let’s start with the first two parts.
Your first strategy is: Provide good investment advice. This is just common sense. Clients with even a trace of unhappiness will not refer their friends or family to you. If your new car spends more time in the shop than on the road, would you refer your best friend to the dealer?
Consider this: Clients happy with your investment advice do not necessarily refer. You know this to be true just from experience.
Bob and Betty Barking have been happy clients for years, but there’s never been a whisper of a referral to Bob’s four brothers, Betty’s colleagues at her law firm, their adult children or their wealthy parents.
Yes, some referrals will trickle in, though rarely enough to grow a business. Conclusion: Good investment advice is necessary but not sufficient to have a vibrant referral-based practice.