6.0 Referrals That Count

NETWORKING >> Each section contains key Action Items located within the downloadable Action Guide >> Click to Download Action Guide.

GETTING REFERRALS THAT COUNT

A referral is a referral, right? At first glance it doesn’t seem too complicated to develop basic referrals for your business; however, there’s quite a big difference between a basic referral and one that’s been properly developed.

Elsewhere, I have written about the difference between a lead and a referral (see “What’s Better: A Lead or a Referral?”). Here I would like to discuss the varying levels of a referral, 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 1 is the lowest-ranked type of referral (the least desirable) to give and receive, and number 8 is the highest (most desirable). You’ll find these principles work for both giving and cultivating referrals.

1. Names and Contact Information Only.

Getting a name and contact information from a referral source is better than nothing—but not much. Unfortunately, this is what many of your potential referral sources probably think of the first time you say the word “referral” to them. Receiving the name of a prospective customer from a friend isn’t a bad thing—it does represent a certain level of trust in you by your source. But the networking value of just having a name and contact information and nothing more is quite low.

2. Authorization to Use Name.

Once a referral source has given you permission to tell the contact she referred him to you, 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 prospects that know her. The problem with this type of referral, however, is that the work of developing the prospect still rests with you. Once you’ve conveyed that she recommends you and your business, the task of selling really begins.

3. General Testimonial Statement and/or Letter of Recommendation and Introduction.

It’s a noteworthy accomplishment to develop a referral source to the point
where he’s willing to say and write nice things about you. This demonstrates that you’ve built a moderate level of trust with him. Going a bit further and providing you with a letter of introduction is even better, because this usually includes background information and a description of your product or business that’s filtered through the lens of the author.

4. Introduction Call.

This level of referral takes the effort required on the part of the referral source up another notch. The source who’s willing to take the time to make a personal phone call is committing to a phone conversation with a prospect that will require at least a small amount of preparation. The inferred purpose of this call is to prepare the way for subsequent communication from you.

5. Note or Letter of Introduction, Call and Promotion.

The impact of a letter followed by a call, which promotes your business
implies an even higher level of commitment on the part of the referral
resource because of the time required to do both. Promotion is
advocacy—an outright recommendation of your product and business
accompanied by a description of its features and benefits.

6. Arrange a Meeting.

By arranging a meeting for you and the prospect, your referral source
moves beyond the role of a promoter to that of a facilitator. She works out
the details of getting you and the prospect together. In effect, your referral
source is acting as an active business agent. In the mind of your prospect, the referral source has made a serious commitment of time and energy on your behalf, which conveys a deep trust in and approval of the product or business you provide.

7. Face-to-Face Introduction and Promotion.

Adding promotion to the in-person introduction increases the effectiveness yet again, because 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 before you even contact the
individual. Nothing else is required of you except to deliver the product
and collect payment. This is the highest level of referral you can achieve.

To get to the point where you’re getting those 8th-level referrals, you’ll
have to work with your referral sources and tell them what you would like
from them. This develops over time, as well. The better someone knows
you and is confident in and sure of your business, the more frequently
you’ll receive these higher quality referrals. It’s all about education!

Make it your goal to operate at the 8th level as much as possible with your
referral sources. Keep in mind that you’ll want to begin referring others at
the 8th level, as well. It’s a real testament to that old adage: “What goes
around, comes around!”

QUESTIONS:

Would it be fair to say that the people who are most able to give you these higher-level referrals are already people who are actively using your products or services?

Generally speaking, that’s correct. It’s not required, but generally speaking
these are individuals that have used your products or services. Or they could be people who are very close to others who have used your products and services. For example, in a lot of networking groups like BNI, one of the things that we recommend is that members regularly give testimonials about each other. I may not have used your service, but it may be very easy for me to refer you effectively if I’ve heard enough testimonials about your product or service. If I hear enough people stand up and say, “Wow, you should really use this person’s products or this person’s services! I’ve used them and this has been my experience,” then their experiences have become my experiences and it’s almost as easy for me to refer you, even though I haven’t actually used your service. So as a rule of thumb, I would say yes, it’s mostly people who have used your product or service, but it doesn’t necessarily have to be. It is, however, almost always somebody who has confidence in you, especially at the 7th and 8th levels. They are very confident that you are going to do a great job for the person that they’re referring.

In some ways, asking someone to give you a referral, especially one of these higher-level referrals, is a lot like asking someone to give you their business.

It is. A great analogy is: to how many people would you hand over the keys to your car? Let’s assume you have a BMW and not an old Chevy. To how many people would you just hand over the keys to your car? It’s kind of similar—you’re handing over your reputation a little bit.

But here’s the other part of that analogy that’s really great: if you have a room full of people, they all have different keys. They all have keys to relationships that you don’t have. They hold the keys to other relationships. The question is “are they willing to hand those keys over to you?” The only way that’s going to happen is if you build confidence and trust and a level of credibility so that they are comfortable doing that.

Giver’s Gain is an important element to this whole notion of getting quality referrals. In order to get quality referrals, you also have to be developing deep enough relationships so that you are, in turn, giving quality referrals.

That’s exactly right. You can’t expect to be giving Level 6, Level 7, Level 8
referrals, (arranging a meeting, doing face to face introductions, closing a
deal) unless you’re willing to give those levels of referrals. So, over time,
you’ll find that most people aren’t going to be giving you those Level 8
referrals. There’s probably only a handful of people that give me Level 8
referrals; probably more that are giving me Level 7 and even more that are
giving me Level 6. But the longer that you’ve built relationships with those
people, the more referrals you’ll receive at the higher levels. To the point
where maybe you don’t even accept Level 1, 2, 3, and 4 referrals. You don’t
even accept them—you thank the people for the connection and you explain to them that what you are looking for is something a little more in-depth. People who have built a solid referral based business can do that quite easily.

Rather than not accepting those kinds of referrals, you’re asking them to go one step further, right?

Yes, that’s a good point. You wouldn’t turn down a referral outright, you
would say, “I really appreciate the interest you’ve put in me. Would you be
willing to arrange a meeting with me and share your thoughts about my
product or service with your prospect?”

It seems that it really is all about educating people to give you the
higher level of referrals. So how do you go about doing that?

If you’re in a networking group where you have an opportunity to stand
and introduce yourself, there are different techniques that you use for different groups. In groups where you’re not introducing yourself regularly, but once a month, you utilize a whole different set of techniques.

Let’s assume that you are in a group of business people that you are
meeting with regularly and you’re teaching them how to refer you. The
best technique to use is what I call LCD – Least or Lowest Common
Denominator. (When I was an undergraduate student in college I was
unequivocally certain I would never use anything remotely related to
algebra ever again for the rest of my life, but I’m glad to say that I was at
least able to use this concept.) That is, you break your business down into
the least or lowest common denominator: one aspect of what you do, one
benefit, one product, one element of the services that you provide, and
you focus exclusively on that.

If you do that effectively, you will over time, educate people on how to refer you. For example, one of the best LCD’s I ever heard was from a florist who stood up one day and in one minute held up a single rose and talked about that rose, and how their rose was different than the rose that you could buy at the local grocery store. By the time he was finished with his 60-second presentation there wasn’t a person in that room who wasn’t thinking, “I’m an idiot if I go to the grocery store to buy a rose.” Techniques like that can be used to help educate, but the key is education. You have to teach people how to refer you and then you have to take time to build the relationship.

ACTION ITEMS: Complete the Action Items in your Action Guide.

Congratulations! By now, you have worked hard to hone your networking ability and initiated new relationships. It is time to get even more specific – you want to make getting referrals as easy as possible.

Think about what your customers value the most about your business and list the top five: Ex. A household cleaner manufacturer might emphasize the use of non-toxic cleaning materials that is valuable to customers with children.  What values do you offer?
1)
2)
3)
4)
5)

Now, begin educating your network about each of these aspects, but do so gradually. That is, tell them about one aspect at each event.

Next — 7.0 — 15 Ways Other People Can Promote Your Business »