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Referrals don’t work!

“What do you mean?” I hear you cry, “of course referrals work!”  If that’s the case, why don’t more people ask for them?

I’m being a bit facetious here. I work with a lot of businesses who struggle to grow their customer base. My first question is, “How unhappy are your existing clients with your service?”  This usually provokes an energetic response along the lines of, “They’re very happy with us, they’re with us for years – we wouldn’t be in business otherwise.” Exactly!

My next question is, “How big is your pool of satisfied clients?”  Followed by, “How many new clients do you need to grow the customer base by 10%, 20% etc?”  Light begins to dawn, and we move into the more uncomfortable area of how many (or few) clients they’ve actually asked for referrals, the results they got, and what stopped them from asking more people.

Generally, reluctance stems from two fundamental beliefs held by the sales person:

  1. I’m not able to ask for a referral (Can’t Do/Helpless)
  2. I’m not going to ask for a referral (Won’t Do/Defensive)

With Can’t Do people, their lack of self-confidence stops them. “Sure if I ask, he’ll only say no, and I’ll just annoy him. I wouldn’t know what to say.”

For Won’t Do people it’s about external blame. “I’m an Account Manager, it’s not my job to recruit new clients. They’d only expect me to refer business back to them in return. We tried that before and it didn’t work.”

In both cases, their personal beliefs about referrals are limiting their ability to get them. They’re either not asking at all, or else asking in a manner that reduces their chances of actually getting an introduction, let alone a warm lead.

Some people are fantastic at getting, referrals. These are Can Do people. They start out with the belief that there’s no reason why a satisfied client wouldn’t recommend them to someone else. “Sure, he’s really happy with our service. In fact he’ll be a bit of a hero to his buddy by referring him to me. He trusts me and knows I won’t let him down.”

Personally, I’d much rather approach a potential referral client than cold call for prospects. Why not ask for referrals in a way that helps your existing client identify who they know that would benefit from your service?

For example, a Can’t Do request for referral goes something like this “Would you mind mentioning to anyone you know that I can supply them (whenever you have a chance)?” A Won’t Do request, “I don’t suppose you know someone who’s looking to buy?” You may think I’m exaggerating, but I’ve overheard variations on both these lines many times.

How does a Can Do request sound? “We’ve really built up expertise working with you over the last few years. I know you’ve a lot of colleagues in the industry who would benefit from the cost savings we can bring. I’d appreciate an introduction to your opposite number in Company X (be as specific as you can)”.

I’ve seen responses to such a request range across: a polite “No”; arrangements for a cup of coffee with both parties present; email or telephone introductions, to sharing of entire client lists. The sky doesn’t fall in with a refusal. One thing’s for sure though, not asking for a referral won’t do anything to grow your customer base.

A final piece of advice – when you do get a referral, thank your existing client regardless of the outcome. Good manners cost you nothing!

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3 Responses to Referrals don’t work!

  1. salesangel February 11, 2013 at 2:19 pm #

    Great article. Like the can’t/won’t split. Do you fire teh won’t do?

  2. Mindfit February 11, 2013 at 7:19 pm #

    Thanks for your comment. I’d only fire the Won’t Do as a last resort. With them its about demonstration, involvement and recognition, because they have the capability, just not the vision. For Can’t Do its about hand holding and training. It would take another article to give you a fuller answer.

  3. Pat Walsh,Sky Business Centres February 13, 2013 at 1:25 pm #

    Great Article from Mind Fit, We often forget that the “Pot of Gold” maybe right beneath our feet and not to far away. i.e Simply ask our existing clients for referrals instead of cold calling or advertising. Fergal Quinn often commented that your customers should become your best sales people.

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