The Number 1 Reason Referrals Are Lost

Follow these five steps to educate your clients about referrals and grow your business.

Do you know the number one reason that business owners don’t get enough high quality referrals?

Fear – That’s it.

Now, on one hand you might think that I mean that some business owners are just flat afraid to ask for referrals. There is no question that there is a great amount of truth to that but…

The biggest stumbling block of all is that your clients and your referral network are afraid to refer your business because they don’t really know how to do it.

You must train them, educate them, and take them by the hand and show them how to provide you with killer referrals.

Here’s what you must do to create an effective referral marketing system.

1. Narrow your target referral – tell the world you are after a very specific type of prospect. This is a good thing for any of your marketing efforts because asking the vague “know anyone who needs what I do” will severely limit the number and quality of leads you receive. Be specific.

2. Be able to tell your referral resource what you do that is extremely valuable – not, “I’m a marketing consultant” – that much I hope they know. Something more like – “I help financial planners triple what they charge.” Consider uncovering a statement like the one above for your business and then print it on the back of business card in the form of a question. “Know and financial planners who would like to triple what they charge?” Then leave some space for someone to write a name and phone number. This type of tool will put your referral program on autopilot.

Now you’ve got their attention. Now you’ve given them nice tidy way to refer you.

3. Tell your referral source exactly what you intend to do with the referred lead. “I will call them and offer them a free evaluation as a gift from you and then add them to my quarterly tips newsletter.” See, most people figure that you might stalk them and hound them until they give. So outline your referral marketing plan for your source and put them at ease.

4. Tell them why they want to refer you – you must help them understand how they will benefit by providing referrals. In some cases, the motivation might simply be that they will be seen as helping their friends and clients. Don’t overlook the power of this motivation. Many business owner can themselves benefit by introducing you to their clients. On the other hand, in other cases the motivation may need to be a bit more tangible – something like a trip, finder’s fee or free product.

5. Follow-up – thank them and let them know how successful you have been because they referred business to you. Communicate with your referral sources every step of the way. Send them movie tickets when they introduce you to a lead and then a nice gift basket when that lead turns into a client. This type of follow-up will encourage continued participation from your sources. The more involved you can get your sources, setting up meeting on your behalf and verbally endorsing your product or service, the better.

Take the time to create this educational component of your referral system. Document each step and then go out there and boldly present your case to your clients, referral sources, and referral network. This is the missing piece of the puzzle for most business owners who attempt to grow their business by way of referral.

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