Why Asking for a Referral Can Be Dangerous

By , Follow-Up & Stay-In-Touch Marketing Strategist

Solo-E Certified Solo Entrepreneur Expert

Marty Marsh - Follow-Up & Stay-In-Touch Marketing Strategist

When I ask many of my new Soul Proprietor clients how they are currently getting most of their business, almost 100% will tell me they are getting their clients through “word-of-mouth.”

On the surface, this sounds great. It means that you are delivering such outstanding service that your clients are then willing to tell others. That’s a good thing.

The only drawback to using only word-of-mouth to attract clients is that it can be very limiting in the number of clients you can get and serve. It can take a very long time for word to get around, and even longer to get to the right people. (The right people are your perfect clients.)

So, while word-of-mouth marketing is an excellent strategy, it is not the only strategy you should be using to get clients but should be a part of your overall marketing plan that includes a variety of ways to market to your perfect clients.

Perhaps hearing that word-of-mouth marketing can be classified as a strategy may have surprised you. Doesn’t word-of-mouth marketing just happen? It can, of course, but having word-of-mouth as one of your planned action strategies can help increase the number of word-of-mouth referrals that you get.

One of the best tactics you can employ as a Soul Proprietor is to stop looking at your competitors as competitors — someone to outwit and beat — and start looking to them as referral partners.

If you’ve done your homework and you know exactly who your perfect client is, you’ll recognize them immediately when they show up. On the other hand, when someone shows up who is less than a perfect fit for you, you’ll recognize them, too.

If you’ve met a few other business people who are offering the same or similar services that you offer, and if you have a good understanding of what makes a client perfect for them, you can easily refer that person who shows up and is not a good fit for you to someone else who is a better fit. Everyone wins.

You win because you’re seen as someone who is helpful and not greedy, as someone who wants the best for a client, even if you’re not the one to deliver the service. The “competitor,” your referral partner, wins because they get a client that is indeed a good fit for them, and of course, the client wins because he or she gets the service they need from the best person to deliver it. It’s a win-win-win all the way around.

Most anyone can be a referral partner, even your current clients, and you’ll certainly want to partner with other business people who offer complementary services to yours so that you can refer clients back-and-forth to each other.

I know a massage therapist who burns some delightfully fragrant candles while giving massages. She gets those candles from a nearby candle store owner who provides them to her for free, in exchange for a mention to the client as to where they can get the candles for use at home.

Over at the candle store, every time a sale is made, a flyer or a coupon goes in with the purchase promoting the services of the massage therapist. They both provide discount coupons and flyers for each other’s services and products so they have a tangible reminder to give to each of their clients, and they share in the expense of having the coupons and flyers made.

Again, its a win-win-win situation for all concerned, because not only do the businesses each get a client, but the clients are doubly satisfied because they get what they want as well.

Give some thought to potential referral partners you might like to work with. Come up with a plan as to how each of you will win in the process, and then approach them. You’ll be surprised at how much new business can come your way with several referral partners.

Another aspect of good word-of-mouth marketing is to simply ask your satisfied clients to refer you to others. You see this happening a lot in service industries such as accounting, insurance, and real estate. But a lot of Soul Proprietors seem to be very uncomfortable in asking for referrals.

If you’re afraid to ask, lay those fears aside. Your satisfied clients are eager to spread the word about your business. They want you to succeed, and everyone likes to help other people get what they want, too. The reality is, however, that those satisfied clients may have good intentions about giving you referrals but just never get around to it. (Everyone is so busy these days with their own stuff going on.)

Now this is where it can start to get dangerous

The first rule you must remember is that you can’t ask for a referral before you’ve delivered your service. Doesn’t matter what kind of business you are in, it is only after you’ve been working with a client for a while — and only after they’ve made it clear to you that they are delighted with your service — that you will want to approach them about giving you a referral to others.

Too often we make a sale and then ask for a referral right on the spot. (Insurance people seem to be notorious for doing this.) But until a client has had the chance to experience your service, they have no real basis for referring you to others do they? And besides, they won’t yet really know who your perfect client is and they may refer someone to you that is an inappropriate match for what you offer or how you deliver your services.

Another key in seeking out word-of-mouth referrals is in consistently delivering outstanding service each and every time you interact with your clients. Do what you say will. Fulfill all your promises — no matter what — and if problems ever do come up, fix them quickly and efficiently so that you and the client come out on the other end looking and feeling good.

Consistently publishing an eZine and a newsletter can go a long way to educating your clients about the kind of clients — your perfect client — that you serve the best. You can be quite specific about the qualities you want in a client.

Make it easy for them

Then, when you’re ready to ask for the referral don’t just say, “Hey, if you know anybody who needs a coach, send them my way, please.” The person you’re asking — at that time — may have no clue whom they could tell about you, even if they want to.

Be specific when you ask. Knowing who your perfect client is makes this easier. If you were a professional organizer, you might say something like, “Marsha, who are some women you know between the ages of 25 and 35 that have young children at home who would love to get their houses uncluttered in time for the holidays?”

See how this zeroes right in on the kind of client you want? The person hearing this type of question may be able to think immediately of a half dozen of their friends or family members who would enjoy having their houses cleaned up and organized in time for Thanksgiving or the new year.

Now it can get REALLY dangerous

And remember, anytime you ask for a referral you are not only putting your own reputation on the line, but you’re also putting the reputation of the person you’re asking to give you the referral on the line as well. We all want to be liked and respected by our friends, family and colleagues and we never want to steer them wrong or cause them to spend money on something they might be unhappy with.

The person you’ve just asked for a referral from must be 100% confident that you’ll deliver what you promise, that you won’t make a pest out of yourself, that you won’t try to sell something that their friend does not want, and a whole host of other objections they might think of. Ultimately, they don’t want to take a chance on losing a friendship or a family relationship over something that YOU might DO or NOT DO.

A tame example of this is when you go to a restaurant and you love the food and love the service and tell all your friends. Someone that you’ve told about your experience then goes to that restaurant, and they hate the food and have terrible service. Chances are you won’t lose their friendship because of that experience, but they may be leery of ever asking you for restaurant recommendations in the future. The same can happen with your business.

Give ‘em an ethical bribe

Is it ever okay to offer something in exchange for referrals — What I (and many others) call an “ethical bribe”?

Sure it is.

My dentist gives me a couple of free movie tickets when I give him a referral who comes in and has work done. I love my dentist and his staff, so it is easy for me to give a referral. And the bonus for me is that I get to go to the movies for free. (Another win-win-win situation.)

If you’re a coach, for example, you may offer a free coaching session in exchange for any client that brings you 3 new clients who also start working with you. You might send a bouquet of flowers or a box of candy or a package of brownies to someone who sends you a new client.

No matter what you do, a handwritten thank-you note sent to a client is always in order. And sometimes that’s all the incentive someone needs to give you a referral.

So, surprisingly, there is a lot of risk involved in asking for — and getting — a referral. Be absolutely sure that you’re ready for a referral when you decide to ask, and then do everything you can to minimize the risk to the person giving you the referral.

Everyone wins when you do.

Marty Marsh believes that your successful business is the catalyst for creating massive positive change in the world. To that end, he specializes in helping you, the entrepreneurial change-agent, to attract your perfect clients and to grow your business quickly and with ease so you have the resources to truly make a difference in the lives of the people you serve. For more business development and marketing strategies for staying in touch with your ideal prospects, visit http://martymarsh.com

© Copyright 2010 Marty Marsh

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