Create Referral Systems That Really Work

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It’s my dream for every professional that their business grows by referral only. Imagine not needing to cold call or advertise. Imagine how easy it would be to grow your business!

It is possible. It can. It can. In fact, I know of a few professionals who not only have a lot of potential clients but also grow their businesses through referrals.

The question is, if it does work, then why don’t we all create a referral-based business? Understanding several key issues is the key to understanding how it works. People don’t know how ask for referrals properly and don’t make enough effort to build a steady flow of them.

How to ask for referrals The most common question I hear is “Who do you know …?”?” Here’s how it works:

– Do you know anyone who could benefit from my services?

Do you know anyone who would like to see their premiums drop?

– Who would you recommend I call?

Another variation is the “Thank You”, which reads: “Thanks for your business… I have enclosed two of my business cards. I’d appreciate it if you could pass them on to …”.

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Sometimes, people will ask clients to pull out their Rolodex/Contact Book/Address book and share it with them in an effort to find potential referrals.

I believe that these approaches are similar to most people’s experiences. They don’t work well and make it difficult to ask for referrals. We stop asking. We would never stop asking for referrals if we could find a professional, effective way to do so.

Let me first discuss the reasons why most methods don’t work, and then I will talk about some of the more successful methods. The majority of the methods for asking for referrals don’t work because of one or more of these six reasons. First, ask people to name a list of names. You’re basically asking them to recall names taken from the universe. They can’t focus on one name because there are so many. Second, people rarely think about their insurance and don’t discuss it with others. If you ask a client …”, if they have ever mentioned insurance to you, or if they are able to give you a judgement about whether they have a need. It is very unlikely that someone will mention insurance in a conversation. I also don’t know if you would like someone else to make a decision about whether or not a prospect requires my services.

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The third reason people won’t give out their names is because they don’t know what to do with them. People are more cautious about sharing names with acquaintances. Fourth, people live in their own world. This is not to suggest that they are selfish. However, it does mean that when they go about their daily lives, they tend to think about their own needs, tasks, and issues, not yours. It’s unrealistic to ask someone to give you your cards. This happens occasionally, but it is not often. A fifth reason referrals don’t work is that most people don’t know your ideal client. If they don’t know who your ideal client is, they will not send them prospects. Another reason why traditional methods don’t work is because most people don’t understand what you do or how you are different. Have you ever heard a client say “I didn’t know that you did that!”? This is a sign that you’re not effectively educating clients or your network.

It’s all very well, but how do you make it work? There are many referrals options that can overcome the weaknesses of traditional referrals methods. Referral generation must not be dependent on people remembering names. It should educate and build trust and credibility.

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These are the four most effective methods.

1. Clients can be given a list of nearby neighbors or businesses that they can use to find names. Include a follow up process that allows clients to see how your contacts those people.

2. Send a monthly “Tips” letter to select clients. It should be informative and useful.

3. Establish a large network (100 people) of business contacts to keep in touch on a regular basis. To help people get to know each other, send out a monthly newsletter and make sure you highlight yourself.

4. Create one or more newsletters for your “neighborhood” (similar to what real estate agents do). This will help you build trust and credibility with a growing population.

Give it your all

Each of these referral systems works. It is up to you to make them work and to keep them going for long enough to get results. While the first method is likely to produce results immediately, it requires some planning and follow-through. Other methods require a strategy and time, and more importantly, diligence, to achieve consistent results. Although each method is more complex than what this article can cover, you should still be able to understand the different strategies for effective referral generation.

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If you take the time to get to know people and then apply proven methods, you can generate referrals. You’ll be more successful the more people you help.