According to a survey conducted by SBA (Small Business Administration) 60 out a 100 small business owners claim that over 60% of their new business comes from referrals.
But only a handful of professionals can clearly pinpoint where their referrals come from and the exact process they use to turn them into paying clients.
Amazingly when it comes to referral marketing – majority of entrepreneurs seem to rely on luck! Ouch this is not exactly the best formula for business success!
When asked about how they turn referrals into clients, most professionals have a deer-caught-in-the-headlights, puzzled look on their faces and keep quiet.
The First Two Key Success Factors of Referral Marketing
Those who truly can sleep peacefully at night knowing their referral generating process is working with the predictable precision of a Swiss banking system understand the power of using FREQUENCY of EXPOSURE.
To best illustrate this, let’s look at how two consultants handle their referrals.
At first glance John and Steve have virtually identical Businesses:
>> Both are management consultants working with small and mid-size corporate clients
>> In the last year they both added executive coaching to their product mix
>> They both are excellent at what they do and have stellar reputation among their customers and peers
But there is a difference
How Is John Getting 5 Times More Referrals?
John gets almost five times as many referrals as Steve, and he turns an astounding 95% of them into new clients.
How, you ask? See if you can spot a difference…
Steve’s name occasionally pops up in conversations his clients have with their business associates. Since he does a good job people are often intrigued by the results he creates for his clients. They ask for his contact info and call him to inquire about his services.
Those calls typically lead to an appointment.
But in terms of frequency of exposure Steve’s potential clients might hear his marketing message only twice before the meeting: when they initially get his information from a colleague, and again during the initial phone conversation.
Here Is What John Does Differently:
At first glance, John’s situation isn’t much different. His name comes up in conversations where he’s praised for his great work. His contact information is passed on, and he too gets an inquiring phone call leading to an appointment with a prospective client.
But that’s pretty much where the similarity ends.
Immediately after the call, John sends out a hand-written card saying “thank you for interest in my services. I’m looking forward to our meeting.”
John makes an additional smart move – he sends another hand -written thank-you card and a small gift (like a Starbucks gift card) to the person who gave him the referral.
He does it because he understands the best way to develop a habit is to reward it in the first place (remember Pavlov’s dog experiment?) so he tries to make his referral sources feel good about mentioning his name. And it works they talk about him more often!
The following day, John sends out a small package with POSITIONING MATERIALS: a welcome letter, an article relevant to prospect’s situation, his short self-published book, and an audio CD.
This allows the potential client to “sample” John’s expertise on the subject. It also builds trust, increases prospect’s appetite for his services, and position him as an authority. Now he’ll be treated as a trusted advisor and not just another salesman trying to close a deal.
Incidentally, John knows that many of his best prospects won’t have time to fully review those materials. He also knows it really doesn’t matter. All he wants is to see his “stuff” sitting on prospect’s desk when he walks into their office.
But he’s still not done. A couple of days before the scheduled meeting he calls his potential client to briefly confirm the meeting objectives, time and place.
After the meeting, John immediately sends out another handwritten “pleasure meeting you/thank you” card.
Higher Frequency Leads to Greater Familiarity
Visibility equals credibility. And frequency translates into familiarity. Don’t believe me? Just ask yourself how many people you “feel like you know” because you see them or hear from (about) them frequently… Point made!
So let’s now review how many times John’s referrals are exposed to his marketing message:
1. When they first are referred to him in a conversation with a business colleague.
2. When they call him to inquire about his services.
3. When they get his handwritten “looking forward to meeting you” card.
4. When they get his Positioning Packet. (And again when they make time to look through the materials he sends out)
5. When he makes the reminder call two days before the meeting.
6. During the first meeting.
Notice, that at this point prospect has been exposed to John’s marketing message five times comparing to only two times in Steve’s process. That’s a 150% increase in frequency of exposure!
7. When they get the handwritten “thank you” card after the meeting.
Now, that they “know” John so well, they TUST him enough to start doing business with him. (Can you say KA-CHING!)
Plus, sending a thank-you card and a small gift to the referral source proves helpful as well. Motivated by his small gesture of appreciation, John’s referral sources now take a more active part in the process, inquire about how things are going, and frequently offer additional help.
Clear Expectations and Education Lead to More Referrals
There is one other thing that separates John from Steve.
Hi understands that his clients want to give him referrals but often don’t know how to do this. So he takes the time to educate them and makes it easy for them to “give him away as a gift”!
He hands each new client a sample of a great Attraction Tool (most likely an audio program or a book), and informs them that he’ll gladly send this Attraction Tool to any of his new client’s business associates at absolutely no cost and no obligation all they have to do is ask for it.
He might even hand the new client a few postcards promoting the Attraction Tool and encourage him to send it to their associates.
Why bother? Because by sharing this information John’s new clients are actually helping their colleagues. And it’s easier and less awkward to send out a postcard and to share a resource, than to hand over names of business friends.
All this increases the chances of John’s name coming up in many casual conversations.
Here Is the Final Key Success Factor to Referral Success
I can already hear you whining, “but that’s too much work, I can’t do that in my business”, etc., etc. And you are right but consider the upside: getting more clients!
And the key is to SYSTEMIZE, AUTOMATE, and DELEGATE.
Do you have to do this? Hey, it’s your business you don’t have to do anything you don’t want!
But the fact is frequency builds familiarity. Familiarity builds trust. And we all do business with people we know, like and trust.
So you decide if getting more referrals and turning them into paying clients is worth adding a few easy steps to your marketing system.