A few months ago I was talking to a friend of mine in the financial services industry, whose company caters to high-income clients. He mentioned they were having trouble reaching new clients and getting more people exposed to their company and the services they offer He understood the power of referrals, but I wanted to know a bit more about their process.
Essentially, they would simply call their existing client base and say, "You've been doing business with us for X number of months or years. Do you know anyone else who could benefit from our services?" It's a good start, but it could be done much more elegantly and effectively.
Referrals allow many organizations to grow exponentially and they cost practically nothing. Yet too many organizations believe referrals are something that just happens. They believe referrals are generated by providing a "wow experience."
Essentially, getting referrals is viewed as a passive endeavour. Most organizations settle for the few referrals they get without ever making actively trying to get them part of their day-to-day operations.
Here's the advice I offered to my friend:
Reaffirm value: Let your current clients know that by introducing you to their friends and colleagues, they're not only doing you a favour, they are also doing the referrals a favour. Get them to understand the value they can provide to others through the simple act of referring. Remind them of how they were able to pay off that debt faster, or take an extra vacation. Remind them, if required, of the benefits they've received from doing business with you and how that positive impact can also help people they know or care about. Chances are, they're already referring you to others, but there are numerous ways to do it far more effectively and with a greater success rate.
Build strategic alliances: This is one of the most overlooked ways to generate more referrals and new growth. I urged my friend to look for every other business, organization, professional association, or publication that had a relationship with the type of people they wanted to reach. Then, I advised him, try to develop a relationship with them. From there, consider hosting events together, or at least presenting to their group at their events. They could make you their preferred vendor. You could offer exclusive discounts or access solely to their people.
Host educational events: Rather than relying on traditional advertising, create a series of educational events. These might be in the form of live events or webinars. You need to realize that your clients are not just solely interested in making more money. They're also interested in things like their quality of life, time management, tax savings, college education, and retirement planning. Delivering value means constantly creating new things that match your ideal client's profile. This value could also be provided to the alliance partners I mentioned above.
After our discussion, my told me that they had made significant progress on all three of my suggestions. First, by tweaking how they handled their referral phone calls, they were (almost instantly) able to increase the number of names they received each week by 142 per cent.
Finally, with a single phone call they were able to very quickly turn an existing relationship with a professional trade association into a profitable relationship. They've been able to develop webinars and guest post material for the association's members. They're also providing free consultations for any of the association's members. Furthermore, they've secured an opportunity to speak to the association's members at an upcoming event.
Don't settle for referrals as something that just happen – make getting them part of your ongoing sales and marketing strategy, and constantly look for ways to improve your process.
Noah Fleming is the president of Fleming Consulting & Co. He specializes in helping clients build unbreakable customer loyalty and dramatically increase their customer retention.