Written by: Stacey Randall
For as long as you have been in business, you have been taught there are a limited number of ways to generate referrals.
- Ask your clients and contacts – anyone in your database whether you really know them or not – for referrals and ask often.
- Be promotional and gimmicky by placing “your referral is the greatest compliment you can give me” or “I’m never too busy for your referrals” in your email signature or newsletter.
- Pay a kickback or commission for referrals.
- Spend as much time as you can networking so a ton of people know you and might one day, maybe refer you.
Have you ever thought about why? Why have you only been taught to ask for referrals, to pay for them or be promotional to receive them. Now I know some of you can make the argument that those ways work for you. Great, but the reality is you are in the minority.
Most business owners want referrals, they just do not want to ask or be overly gimmicky to receive them. So, if you know you deserve them and do not want to follow the decades-old, traditional advice on how to receive them, what are you left with? Hope. To hope you receive some referrals from time to time because you do a great job.
But as the saying goes, hope is not a strategy.
So where does the traditional advice (asking, paying, being promotional) come from on how to generate referrals? It comes from how we have been taught to deploy an overall sales strategy in our business. What we have been taught is that a typical sales strategy has two parts – the prospecting plan and the marketing plan.
Traditional Overall Sales Strategy
Within a sales strategy, the typical prospecting plan include activities such as cold calling, joining leads groups, attending live or virtual networking events, farming a neighborhood and more. The mentality you bring to prospecting is short-term, meaning you hope to participate in that networking event and meet someone who wants to talk about hiring you or working with you. The end user of your prospecting activities is the prospect, your potential new client. When prospecting you want to reach the prospect. When you make that cold call or send that cold email, you are hoping the prospect answers and is interested in talking with you.
On the other side of the sales strategy is the marketing plan. In the typical marketing plan, the activities include advertising, sponsorships, trying to get publicity (PR), social media, and more. The mentality is a little bit longer term than prospecting but the end user of your marketing message – the one you want to see it and respond – are potential clients, prospects.
Make no mistake both prospecting and marketing are important. But your sales strategy is not a two-legged stool. It is a three-legged stool and the third leg should be your referral plan. Which means that you have to pull all referral activities out from your prospecting and marketing.
What’s Wrong with Forcing Referrals into Prospecting or Marketing?
But that is not how we have been taught; we have not been taught that our sales strategy is a three-legged stool. Instead – for decades – we have been taught that referrals fit within the prospecting plan or marketing plan.
With the short-term mentality of the prospecting plan – trying to get to the prospect as quick as possible – to ask or pay for referrals became the mainstay advice for decades. That advice provided tactics including who to ask, when to ask, how often to ask and how to get over being uncomfortable with asking.
Yet, we still don’t want to ask. We don’t enjoy it. We know it makes who we are asking uncomfortable. And we also know it doesn’t work. Most people we ask don’t get back to us with quality prospects. Or we end up chasing the name and number we are provided.
On the other side of the sales strategy, we have been taught that referrals fit within the marketing plan. But trying to fit referrals into the mentality of marketing, the tactics we are taught and the advice we receive is to be promotional or overly gimmicky.
Tactics include gimmicky messages like adding “Greatest compliment you can give me is a referral” to your email signature or eNewsletter. Or to send out postcards with stickers that say, “I’m never too busy for your referrals.”
Both of these strategies – forcing referrals into the prospecting mentality or within the marketing message – ultimately forces you to become salesy with your referral strategy which misses the point of who the end user, or receiver – of your referral plan is for.
The end user of a prospecting plan or marketing plan is the prospect.
With referrals, the end user of your activity is never the prospect – it is your referral source who is always a human.
When you pull your referral plan out of prospecting and marketing, you can create a fully functioning sales strategy by adding the third leg to your sales strategy stool.
How Referrals Are Different
With referrals, you are focused on developing and strengthening relationships with your referral sources which removes the need to ask, be promotional or gimmicky or salesy.
So, what does this mean? What does it look like and how do you deepen relationships with your referral sources?
Well, let me start with what will not cut it. You are not strengthening relationships by just emailing your newsletter every month or mailing an occasional tri-fold brochure or postcard. Or hoping to see them randomly at a virtual or in-person networking event. Or texting or calling every quarter because your database reminds you to will not produce the results you are looking for either.
When we look at our relationships, we have to focus on being memorable and meaningful and staying top of mind. Yes, sending the handwritten thank you card for each referral received is necessary. But also connecting with your referral sources differently – with an intentionality – to be consistent (not every day or month consistent, but approximately 6 to 8 times a year). Most business owners want to know what this means specifically – exactly what do you do – but I advise you to start with identifying who are your actual referral sources. Then you will know how best to serve them with your outreach giving you opportunities to plant referral seeds.
Maybe the best way to connect with your referral sources is recognizing Mother’s Day with a Wonder Woman water bottle or hosting some of your best referral sources for a virtual beer tasting complete with a knowledgeable brewer. Or a one-on-one coffee or lunch (virtual or in-person) where you can learn how you can help them. The opportunities are endless, and the business owners I work with gain the best clarity of the “what to do” once they know the “who” they are doing it for.
Final Considerations for a Referral Explosion
Remember, we should not apply the prospecting or marketing mentality or activities to how we generate referrals. Anything you do to generate referrals is directed at the referral source, the human who will refer new clients to you. Which means everything should be different – what you do, what you say and when you do it. Because referrals are ultimately about someone putting their reputation on the line and recommending you because they trust you.
Referrals only come from relationships, so your tactics have to be different. I encourage you to spend some time as 2021 gears up to decide what your referral plan will look like as you create your third leg of your sales strategy.
About the author:
Stacey Brown Randall is the multiple award-winning author of Generating Business Referrals Without Asking, host of the Roadmap to Grow Your Business podcast and national speaker.
She has had the privilege of helping well-known corporations and franchises but her focus is on small business owners and solopreneurs.
Stacey’s programs are uniquely tailored to help small business owners and solopreneurs take control of their referrals, their client experience and their business.
Stacey has been featured in national publications like Entrepreneur magazine, Investor Business Daily, Forbes, CEO World, Fox News and more.
She received her Master’s in Organizational Communication and is married with three kids.
You can find her at www.StaceyBrownRandall.com.