May 20, 2021
The Power of Referrals for Business Development
Spring has sprung and now is the time to learn how referrals can sprout business development.
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 raise funds for a building now called the Juno Beach Centre 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 retired Canadian Department store executive. 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 Juno Beach Centre. That is the power of a referral.
Why are referrals 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
The first way to build your business through referrals is to become more referable. Referable means your customers or those that know your capabilities 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 professionals to your client. Do you recommend trusted professionals to your client where appropriate?
- Do you deliver in a timely manner within deadline?
- Are you leading edge?
Another strategy is to work your “circle of influence”. Your circle of influence is your very satisfied clients and others in your network who will recommend you to people in their network that could benefit from your product or service.
How does one ask for referrals from one’s circle of influence?
Here are a few strategies:
- 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.
- Add value wherever you can. Be first to offer to help. We are wired to give back to someone who has helped us.
Forbes: The Fastest Way to Achieve Success is to First Help Others Succeed
Why People Give Back: The Neuroscience of Advocacy
- Timing matters. There is a good time to ask for a referral. It’s when the relationship is strong and your contact has time for a discussion.
- Make it safe and easy for someone to refer you. Offer to craft the introduction.
- Keep the referrer informed after the referral.
- Show gratitude for the referral. It feels good to be grateful and to be acknowledged.
Giving Thanks Can Make You Happier
In summary –
- Become referable
- Build your circle of influence
- Learn how to ask for referrals
Cates, Bill. Beyond Referrals: How to Use the Perpetual Revenue System to Convert Referrals into High-Value Clients. McGraw-Hill Education, 2013.