The power of Referrals for business development is timeless

  • January 25th, 2021
  • Blog

The power of referrals for business development is timeless

A number of years ago, my father (Garth Webb, a D Day World War II veteran) decided Canada needed a place to learn how Canadians contributed in World War II. He started selling bricks to WAR vets to contribute to a building now called the Juno Beach Centre https://www.junobeach.org/.    These donations were helpful, however it became clear to Dad that he needed a faster stream of  funding to build the museum.   Following a planning exercise, he contacted an individual in his network, a Canadian Department store executive who had recently retired.  This executive introduced Dad to his mentor, the CEO of Walmart Canada.  Dad met with the CEO and as a result, Walmart raised over $ 2 million for the development of the Juno Beach Centre.  That is the power of a referral.

A few years ago I was at a Human Resources’ Association meeting.  I turned to the person standing next to me, introduced myself and offered to buy him (Rod) a drink.  We started chatting and sat down beside each other for the dinner portion of the meeting.  His wife was also at the meeting, and Rod introduced me to her (Diane).  Diane worked in learning and development.  As it turned out, her company was looking for a vendor to meet their training needs.  Diane purchased leadership training from me, and this order alone accounted for 85% of my revenue that year.  This success significantly raised my profile in my company.

My brother (Andy) had a successful home renovation business for a number of years.   Andy never advertised, nor did he ask for business directly or indirectly. He was simply really referable.  People trusted him and were impressed with his creativity with respect to home renovations.

Each of these examples indicates how businesses have grown through referrals.

So why are referrals so effective? People like to do business with someone whom has been referred by an individual they know and trust.  It’s our human nature!

  Research shows when examining business as a result of a referral:

  • Trust is higher
  • The sales cycle moves faster
  • Your advice is followed more easily
  • Sales are larger
  • Price is less of an issue
  • One’s confidence increases
  • One’s closing rate is higher
  • Those to whom you are referred are more likely to refer you to others

I believe that the act of building your business through referrals is fun and much more fun than cold calling!

 

The first way to build your business through referrals is to become more referable.  Referable means  your customers or those that know of your capability will voluntarily refer you to others they believe could benefit from your product or service.  Word of mouth is very powerful.

How do you become more referable?

  • Develop and instill trust. Live up to your promises.
  • Be accessible and responsive. Do you respond to queries quickly?  Are you available?
  • Does the client feel honored to be partnering with you?
  • Recommend other credible professionals to your client.  Do you recommend trusted professionals to your client where appropriate?
  • Do you deliver in a timely manner and within deadline?
  • Are you leading edge?
  • Are you viewed by others to be the best?

Another key tenet of being referable is to have a “circle of influence”.  Your circle of influence is typically your very satisfied clients and others in your network that will enthusiastically recommend you to people in their network that could benefit from your product or service.

https://marketersclub.com.au/the-circle-of-influence/

 

How does one ask for referrals from one’s circle of influence?

Here are few key factors:

  1. Be curious about everyone in your circle, learn about their personal and professional interests. Think of yourself as a detective. Your job is to make connections and find common ground.
  2. Add value wherever you can.  Be first to offer to help.   We humans are wired to give back to someone that has done something for us.

https://www.forbes.com/sites/amyanderson/2016/01/06/the-fastest-way-to-achieve-success-is-to-first-help-others-succeed/#f311d1279f9f

 

https://influitive.com/blog/why-people-give-back-the-neuroscience-of-advocacy/#:~:text=Why%20humans%20feel%20the%20need,you’ll%20probably%20smile%20back.&text=This%20positive%20reciprocal%20behavior%20helped,not%20only%20survive%2C%20but%20thrive.

  1. Timing is everything.  There is a good time to ask for a referral.   It’s when the relationship is strong and your contact has the time to have a discussion about opportunities.

Recently I undertook some sales training for a small business (the business sold games).  I was involved in follow-up coaching with one of the trainees.  The trainee remarked how much he appreciated the training.   I then took the opportunity to discuss the training in more depth.  He told me how it helped one of his colleagues revive business from a large long-time customer. I then asked him if he would be willing to write a testimonial for my website.   He sent the testimonial as soon as we were off the phone!

  1. Make it safe and easy for someone to refer you. Offer to help craft the message of introduction.
  2. Keep the referrer informed after the referral.
  3. Show gratitude for the referral. It feels good to be grateful and to be acknowledged.

https://www.health.harvard.edu/healthbeat/giving-thanks-can-make-you-happier#:~:text=In%20positive%20psychology%20research%2C%20gratitude,express%20gratitude%20in%20multiple%20ways.

These are just a few tips to help you get started on receiving and asking for referrals.

My last tip is to set goals.

The goal setting process needs to be thought out.  Below is a video on the 5 golden rules of goalsetting –

https://www.mindtools.com/pages/article/newHTE_90.htm

As the motivational speaker Zig Ziglar once said – “A goal properly set is halfway reached”.

 

In summary –

  1. Become referable
  2. Build your circle of influence
  3. Learn how to ask for referrals
  4. Set goals for success.

If you are interested in coaching or a training program on how to become more referable, as well as ways and means to increase your likelihood of receiving referrals, please call or email Peter Webb, 905.875.6515, peterwebb@petersalescoaching.com.

 

 

References

 

Anderson, May Rees (2016, January 6).  The Fastest Way to Achieve Success is to First Help Others Succeed.  Forbes.

https://www.forbes.com/sites/amyanderson/2016/01/06/the-fastest-way-to-achieve-success-is-to-first-help-others-succeed/?sh=22d68e2479f9

Cates, Bill.  Beyond Referrals:  How to Use the Perpetual Revenue System to Convert Referrals into High-Value Clients.  McGraw-Hill Education, 2013.

Giving thanks can make you happier, November 2011.  Harvard Health Publishing Harvard Medical School – Trusted Advice for a Healthier Life.  https://www.health.harvard.edu/healthbeat/giving-thanks-can-make-you-happier#:~:text=In%20positive%20psychology%20research%2C%20gratitude,express%20gratitude%20in%20multiple%20ways

Gladstone, Eli (2016, June 2).  Why People Give Back:  The Neuroscience of Advocacy.  Influitive.

https://influitive.com/blog/why-people-give-back-the-neuroscience-of-advocacy/#:~:text=Why%20humans%20feel%20the%20need,you’ll%20probably%20smile%20back.&text=This%20positive%20reciprocal%20behavior%20helped,not%20only%20survive%2C%20but%20thrive

Golden Rules of Goal Setting – Five Rules to Set Yourself up for Success.  Mind Tools Essential Tools for an excellent career.    https://www.mindtools.com/pages/article/newHTE_90.htm

The Circle of Influence.  Marketers Club.

https://marketersclub.com.au/the-circle-of-influence/

Ziglar, Zig.  Secrets of Closing the Sale.  Baker Publishing Group, 2004.