May 22, 2023 • Podcast

How do I properly ask for referrals?

Paul shares ideas on how to use the easiest, fastest way to grow your business—your referral network.

Show Notes

One of the easiest ways to reduce price sensitivity is to get referred into an opportunity.

Constantly build your network by participating in industry events, i.e., tradeshows, community events. 

Identify and engage your greatest referral sources—your best, most satisfied customers.

Set the expectation that you will be asking your customer for referrals.

Once your customer has provided you a referral and introduction, it’s up to you to set the appointment as quickly as possible.

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How do I properly ask for referrals?

(Transcribed from podcast)

On today’s episode, we’re going to talk about referrals: gaining referrals. How do we ask for them, why they’re important. We are going to cover that topic, because really, using your referral network is going to be one of the easiest and fastest ways you can grow your business. Whether you’re in sales, small business owner, service-based, business, you name it, referrals simply work.

Now, before we get into that, just a reminder, when you are out there building your referral network, you need to create value. You need to add value, not only to your customers, to your prospects, but also within your network and your community. Your go-to guide for creating value, not only in your business, for your customers and for your network is going to be Value-Added Selling. Make sure you pick up your copy. It’s available wherever you download your books.

We have our public seminar actually coming up here in just a few short weeks. It’s going to be in June—June 27th and 28th. If you want to learn how to sell value, how to compete more profitably, how to be more successful, consider joining us. We only have, I think, three spots left at this point. So we may be full by the time this episode actually goes to air, but hey, that’s all right. You can always make it to our next one, which will likely be in August.

With that being said, let’s get back to that question: “How do I properly ask for a referral?” Now referrals are critical. The Journal of Marketing Research found that one referral is worth 12 cold calls. So, unless you especially enjoy the pain, the frustration that comes along with cold calling, hey, think of how you can get referred into that opportunity instead. So, cold calling is effective, but getting that referral is more effective and it’s easier to gain. So, it shows it’s going to open up more doors.

Also, it helps reduce resistance when you have a referral. Our research shows one of the easiest ways to reduce price sensitivity is to get referred into a customer. That’s going to reduce the likelihood that you’re going to face discount requests, that you’re going to get pushback on your price. So it can reduce price sensitivity. Our research also shows the most effective way to get in and meet with high-level decision makers is going to be a referral. So, referrals—they simply work. They just work.

Now asking for referrals is a habit, just like not asking for them is a habit. So what we’re going to do today is, we’re going to talk about how to properly ask for a referral.

Now, the first thing we need to do, let’s call this, step number one or tip number one: constantly build your network. And I’m not just talking about building your network on LinkedIn, which is important. We want to constantly build that network. When you meet someone new, look them up, add them to your profile. This is just basic, common-sense stuff. We want to build that network. But also we want to build our wider circle. And this includes business colleagues that you network with. This means people you meet at a trade show. This means going to networking events. You need to participate in your industry if you want to expand your network.

I think about individuals that have made a name for themselves in certain industries. They never have trouble getting appointments. They always seem to have a full pipeline of opportunity, and it’s because these individuals are constantly building. They’re always building, building, building. They go to the trade shows, they go to events, they get involved in their community. So, I would encourage you to look for opportunities to continuously build your network. So that’s kind of a basic, long-term tip, something that you’ll never fully achieve, right? We just constantly build and build and build.

Now, when it comes to some of the tactical things we can do to properly ask for a referral, the first thing we want to do is identify who are going to be our greatest referral sources. Your greatest referral sources are going to be your best clients, your most satisfied clients. Think about the customers you’re interacting with. These are your customers that, oftentimes, deliver more profit than any other customer. They appreciate your value; they’ve had a great experience with you. Your best customers and your most satisfied clients—they tend to be your best referral source because they often network with other great companies, successful people. Jim Rohn, the famous motivational speaker, said you’re the average of the five people you spend your time with. We can assume that your best customers are also hanging around your best prospects. So, identify who they are.

Once you’ve identified who your best referral sources are, it’s important that you set the expectation. We’ll call this tip number three: set the expectation. Let your customers know that a majority of your business is generated through referrals. This is a way to plant some seeds. You’re letting them know, “Hey, I get business from referrals.” And there’s a chance that your best customers right now were referrals to begin with, so they’re familiar with it. But, you’re planting a seed to let them know that you’re going to be asking for a referral. At some level, that’s giving them a heads up. That way they won’t be surprised. So, you’ve got to set the expectation early on—set the expectation early.

The next tip, tip number four: be specific. That is the next tip. We need to be specific on who we want that introduction to. So if you know the individual’s name, title, company, all that, that is great. We want to be very specific and intentional. Now, if we don’t know exactly who. Let’s say we’re just reaching out to a customer. We don’t know who they know. Rather than giving them an individual’s name, title, and company, instead, what we want to do is we want to give them a type, a prototype. And you introduce that by saying, “You know, here are the types of customers we work with—successful companies, like yourself, that are in this industry, that have this many employees, that are dealing with these challenges.” We want to be specific on who the type of customer is if we don’t know the actual individual.

Or you can just give them both. Imagine that, when you’re asking for the referral, you reach out to your best customers and you say, “Hey, I noticed that you’re connected to these three people on LinkedIn. They would be great customers of ours. And in addition to that, here are the types of companies we like to work with.” And then you lay that out there as well. Just make sure that your general description aligns with those specific individuals that you mentioned. That is critical all. So, you make the request.

Now in the request, you want to make it as easy as possible for that person to make the introduction. And that usually means sending them a boiler-plate type intro. And in your boiler-plate intro, what you want to do is highlight some of the value that you’re going to bring. And you want to also mention the experience that you have with that customer. And you can say to the person referring you to the new prospect, “Hey, here’s a message that you can use in the introduction. Feel free to change it or tweak it as much or as little as you would like.” You’re making it as easy as possible for that person to refer you.

Now, clearly, the final step here, once they make the introduction—whether it’s in person, over the phone, via email, whatever it is—it’s critical that you thank that person immediately. Thank them for the introduction, and initiate contact, and schedule the meeting. That’s the critical element, is once that individual has made the connection, the referral is in the air, it’s up to you to land the plane. Do it as quickly as possible.

So guys, just some basic tips and ideas on how to gain more referrals. Now, one final bonus tip. Individuals that refer you to other prospects, people within their network, they like to know whether you were successful or not. So if you do get the appointment, let them know: “Hey, thanks again for the intro. We scheduled an appointment for a couple of weeks.” And then if you’re able to convert that prospect into a customer, definitely let that person know: “Thank you so much for the introduction. We started working with them last week,” or “We’re going to sign the contract tomorrow.” Whatever it is, make sure you thank them and make them aware of the progress. And send them a nice gesture. It could be— I’ve got a buddy I play golf with. One of the things he’ll do is, anytime someone makes an intro, he gives him a dozen Chrome Soft golf balls. What a gift, especially for a golf nerd like me. But we want to thank them and give them an expression of our gratitude. That’s just so important. Do something nice for them.

Make it a big day.

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