Generating
More Business Referrals
by Stephen M. Canale
When
it comes to finding new sources of business, most people don't really
enjoy the task of prospecting and having to continually develop
new business leads.
On
the other hand, just about everyone in business loves to receive
referrals, as these leads don't appear to require any prospecting
effort.
Despite
the obviousness of these statements, few business people ask for
referrals frequently enough. This is most likely because asking
for referrals feels too much like prospecting, and the fear of rejection
prevents many from initiating such requests.
However,
business referrals are the life-blood of those who are considered
to be truly successful in their chosen professions. These individuals
not only outperform their peers, but they typically enjoy their
business much more than average, as well.
Let's
face it, having an endless stream of new leads without having to
prospect or wait for the phone to ring is much more pleasant than
the alternative.
The
first lesson here is simple: you probably need to ask for referrals
much more often than you already do.
This
is, of course, easier said than done. While anyone can simply begin
asking for referrals, many questions will likely cause you to hesitate.
•
When is the best time to ask?
• How do you ask without seeming too "pushy?"
• What is the most effective way phrase the request?
• How can you reduce the fear and reality of rejection?
As
with most things in business, and life, it's best to have a plan.
Rather than thinking of the request for a business referral as an
event, you should consider it a process.
Successfully
generating referrals as a regular business practice can be easily
achieved through a simple five-step procedure.
First,
you need to plant the seed.
The
next time you begin a business relationship with a customer or client,
make sure you emphasize that you prefer to do business on a referral
basis.
If
the prospect has come to you through a referral of some kind, then
reinforce that the reason you're willing to work with them is because
of the referral from the mutual acquaintance.
For
instance, "I'm glad Jerry gave you my number. He might not
have mentioned it, but I generally only work with clients who are
referred by someone I know and respect." "How is Jerry,
by the way, I haven't talked with him in a while?"
On
the other hand, if the customer came to you from some other source,
an incoming call for instance, then point out your willingness to
work with them as a special exception.
"I
should tell you that I usually only work with clients who are referred
by someone that I personally know. However, I do have some extra
time in my schedule this month, and knowing the area as well as
I do, I really believe I can help the two of you get the most money
for your home."
In
either event, and regardless of how you say it, letting the new
prospect know that your time is valuable and that you generally
prefer to work with referred clients will reap great rewards down
the road.
The
second step is to obtain a commitment.
We
all know that getting someone to commit to an action on the spot
can be both uncomfortable and difficult.
However,
you'll likely find that obtaining a commitment for a "future
event" is much simpler than you realize.
The
difference is in the lack of resistance most people feel toward
future commitments.
For
instance, if you ask this brand new client for a referral right
now, there are plenty of reasons why this could feel awkward for
both of you, and that you might not receive a referral.
They
may not be able to think of anyone to refer to you on the spot,
or may not yet trust you enough to do so. Additionally, the request
to act immediately is likely somewhat of an unwelcome surprise.
On
the other hand, if you ask them to provide referrals at some future
time, you'll find that resistance to your request will not only
be diminished, but will likely not exist at all.
Example:
"Mr. and Mrs. Tandy, if I agree to go to work for you now,
and can successfully handle this transaction to your satisfaction,
would you be willing to refer business to me in the future?"
Few
people will resist this request. There's no pressure or immediate
need to act, and their obligation is contingent upon you doing a
good job for them, which of course is something they want.
If
they do decline or resist this very reasonable request, then it's
a pretty clear signal that you probably shouldn't invest your time
into working with them in the first place.
Step
three is simply a matter of reinforcement.
Once
you've planted the seed and then obtained a future commitment, all
that's really necessary is to provide them with good service and
then set up the collection of the referral.
This
is to say that when your immediate business with the client is complete,
likely some months from now, you only need to remind them of their
agreement to refer business to you whenever the need arises.
An
important distinction that needs to be made is that this step is
not actually a request, and therefore cannot be denied. The commitment
to refer business to you was made long ago.
A
great way to phrase this reminder is one in which you both reinforce
the obligation for referrals and make the client feel good about
doing so at the same time.
You
can approach this in any manner that makes you feel comfortable,
but an example would be:
"Mr.
and Mrs. Tandy, it's been a pleasure working with the both of you
and I hope we can work together again in the future."
"By
the way, when you know of someone who needs to buy or sell, after
giving out my name and number please call or email me directly to
let me know that you've referred them"
"As
I told you when we first met, I generally only work on a referral
basis, and I'd hate to have your friends leave me a message and
not realize that they were referred by you. If you can let me know
to expect their call ahead of time, I would appreciate it. And,
I'll make sure I do my very best for them."
Not
only does a statement such as this gently remind them of their obligation
to send referrals, but it makes them feel important in the process
as well.
Collecting
the rewards
While
following the first three steps will substantially increase the
number of referrals that you receive over the years to come, you
should still make it a habit to follow up with these past customers
and clients to ask for more referrals.
Two
or three times a year you need to make a personal phone call and
ask for more referrals. Not only will this generate positive results
in response to your direct requests, but also these calls will gently
remind past clients of the importance of remembering to refer business
to you.
The
key to success with this fourth step is in having a good reason
to call, besides asking for business.
Simply
calling and asking for a referral will likely be uncomfortable for
both of you, and will not produce nearly the results that a well
reasoned call is capable of.
On
the other hand, calling to inform the past client of a recent listing
or sale on their street will generally be appreciated, as everyone
likes to know about real estate activity and values in their immediate
area.
A
daily scan of your MLS "New Listings" section should provide
you with ample opportunities to contact past buyers.
While
the dialog will depend on your personality and style, who would
object to a call such as:
"Mr.
Tandy, it's Stephen Canale calling, how are you and Jean doing?"
After
a few minutes of unguided and natural conversation you can then
tell them why you're calling:
"You've
probably noticed that the Bernard's are selling their home down
the street, but did you know that they are asking $192,000?"
Again,
this may lead to several minutes of conversation about the Bernard's,
real estate values, other properties in the area or just general
neighborhood gossip. Any and all of which is good for building rapport
and future business.
At
some point in the conversation, likely towards the end of the call,
you simply need to ask the very natural question:
"I
thought I should call to see if you can think of anyone at the University
(or where ever he or she works) who might be interested in the Bernard's
home?"
Regardless
of the answers you receive, you can be sure of two things:
1.
You will receive leads from these calls
2.
This casual, yet purposeful reminder of the importance of referrals
will generate future referrals to you as well
The
final step, positive reinforcement
Simple psychology, when someone does something you would like repeated,
reward the action.
In
this case, the reward for sending a referral should be threefold.
First,
you should immediately contact the person who sent you the referral
and thank them, while also letting them know that you'll provide
the best possible service to the friend, neighbor or relative.
Secondly,
you should consider keeping the person who sent the referral "up
to date" as much as is appropriate for the situation. Someone
who has referred an immediate family member would likely appreciate
more feedback than one who simply referred a neighbor.
In
any event, you should let them know when the business transaction
has been successfully consummated, using this opportunity to again
remind them of how much you appreciate their willingness to go out
of their way to refer business to you.
Thirdly,
a follow up gift is more than appropriate. While this may be subject
to business regulations, a personal gift, gift certificate or even
something so simple as a gift-basket with a handwritten "thank
you" card will go a long way to generating additional referrals.
What's
important to understand about this fifth step is that the whole
structure of rewarding the person who sent you the referral centers
around clearly communicating how much you appreciate their action
of referring business to you. Additionally, you want to reinforce
that you will make sure that they never regret referring business
to you by providing excellent service to the new client.
Committing
to the process
If
you follow these five steps to generating more business referrals,
you will likely find the process to be a painless and natural extension
of providing the kind of personal service that most consumers will
very much appreciate.
Rather
than feeling like prospecting, these steps really are no more than
an effective business process for providing the consumer with reasonable
expectations as to your working relationship with them, and then
clearly communicating your business needs along the way.
Stephen
M. Canale
Speaker, Trainer & Author - Technology, Marketing & Sales
http://www.canale.com/
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