Referral Misconceptions

I can’t count the number of times I have recommended to clients that the key to their business is sitting right in their database. There are very few businesses or services that survive on new business alone and this is why nurturing referrals is the most important aspect in the success of any business or service.

There are a few misconceptions or misunderstandings about referrals that I would like to address:

1. Gifts are a Strong Referral Incentive? Not in my opinion.

People don’t refer their associates and friends to your business because you offer them a free gift, like a free lunch, movie tickets, cash, etc. They refer others to your business or service because they feel that their associate or friend will really benefit from your product or service. They refer others so that they can help them experience a very positive result.

They also refer businesses to their friends because they want to feel important. They feel important when they are know something that they can share with their friends and associates. Just ask yourself why you would recommend a restaurant to a friend and you will better understand what they are thinking when they refer someone to you. If you had a positive experience at a restaurant, you want your friend to enjoy the same experience and so you recommend the restaurant to him or her. If they have an equally good experience they will be appreciative of your good taste. If the food and service was mediocre, but they gave you an umbrella on the way out would you refer the restaurant to your friend?

Excellent service is one of the most influencing factors in generating referrals, not gifts. You can still show your appreciation with a sincere Thank You note or gift, but don’t make the referral process contingent on a gift.
Hand Holding Blank Business Card

2. Customers Know What You Do and How Your Services Can Benefit Their Friends – Not in a million years

Never assume that they are fully aware of the many services you provide and how those services can benefit your clients’ associates. In fact you may be surprised at how little your clients know about what services you offer. They rarely know exactly how your services can benefit their friends or associates or even if your services are appropriate for others.

If your clients are confused about which services you offer and which ones would benefit their associates, they probably won’t refer you. It is important to simplify your services and describe them in easy to understand terms that everyone can understand. It’s also important to focus on just one or two of your services when you follow up with your clients. Make it easy for your clients to refer you.

3. Your Business is Uppermost in Your Clients’ Minds At All Times
– Give your head a shake!

Your clients rarely think about your business and your services. They have a million more pressing matters that they must address. This is one of the most costly misconceptions small business owners have about their customers. They think their prospects and customers will remember them when they are ready to buy.

That coupon or even gift certificate you gave them six months ago is hidden under a pile of unread magazines, or under the refrigerator.

If you want to bring your business to the top of your clients’ minds, then you must follow-up with them on a consistent basis, with helpful information and special offers.
Card File

4. Your Clients Are Always Looking for Referrals for Your Business – Not even your mother is.

Have you ever had someone hand you a stack of his or her business cards and then say, “If you come across anyone who you think might be able to use my services, please pass along one of my cards”? What did you do with those business cards? Round filed them? Threw them away? No one keeps your business cards in their pocket just waiting for an opportunity to promote your business.

Almost always the referral comes when someone is talking to your client/customer about your particular service or business and a light goes on and they say “I know so and so and think they would be able to help / sell / assist you”.

Okay now that I have lost my entire audience check out some tips for developing your referral business.

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