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Keys To Obtaining More Business Referrals

December 19th, 2009 · 9 Comments

The most successful business relationship is usually the result of a personal recommendation.

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By Roger Ewing

Case in point.   A sales associate in my office, lets call him John, understands the value of referral marketing.  John enters into an agreement with a custom house painter who works on new speculative homes, as well as high-end remodels, in the toniest of neighborhoods.  Pierre is the painter homeowners love to have on their project and then brag to their friends about the talented craftsman working on their home.

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John is an enterprising and very successful real estate broker.  He understands the value of referrals and decides to create a mutually beneficial relationship with Pierre the painter.  John will refer Pierre’s custom painting business to his clients who are purchasing or selling homes.  In return, Pierre will refer any potential buyer’s and seller’s to John that he meets on his painting projects.  This symbiotic relationship should result in lots of referral opportunities for both.

John refers several custom painting jobs to Pierre over the course of the next few months.  Pierre is delighted, but John has not yet received any referral leads, even though Pierre claims to have handed out every business card John gave him.  What’s the problem?

It’s not enough for Pierre to simply hand John’s real estate business card to potential clients who happen to inquire about the home he is painting. That action alone does not qualify as a referral.  A successful business referral requires more effort.

I recommended to John that he meet with Pierre the painter and “train” him in the way he should handle his referrals.  Here are four helpful ideas to assist you in creating better referral opportunities.

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1.  Ask permission.  Always create an environment where your friends or business partners acknowledge the referral process.  “My business is predominantly the result of personal referrals. Would you be willing to help me by passing on potential buyers and sellers to me?”  Assuming they say yes, you’re next step is to train them on how to refer you properly.

2.  Set the stage. Some individuals will balk at referring a client to you because they worry it may cause problems in their friendship with you.  Confirm that you keep your business and personal relationships well separated.  Assure your referral source that regardless of the quality or outcome of any referrals they give you, the referral will have no negative impact on your personal or business relationship.

3.  Don’t qualify the referral. Your referring source does not need to validate the quality of the referral.  I suggest saying something like this. “Please do not evaluate or attempt to determine the quality of a referral you give me.  Allow me to do that, it’s my job.  Send any lead my way, good, bad, or indifferent.”  People may actually not want to give you a referral because they don’t want to disappoint you.  Do not allow your referring source to do that.

4.  Control the referral process. You must initiate the call to the client, not the other way around.  Instruct your referring source to obtain the clients contact information and tell the client you will be calling.  This is critical.  Taking control of the referral process from the beginning will ensure client contact for you.  Leaving this to chance, by waiting for the client to call you, may result in a lost opportunity.

Lastly, the issue of providing an incentive to the referral source is something to consider.  When a friend or business associate recommends you, they are taking a leap of faith.  Their goal is to do a good deed for the client by giving them the opportunity to work with you.

Personally, I don’t believe in paying cash for a referral that results in a closed transaction weeks later.  I want to reward my referral source to initiate referrals, not to close sales.

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Therefore, I recommend you provide some small gift to the person who has referred you.  This should be done as soon as you receive the referral.  That is the behavior you want to reinforce.  A coffee house or a restaurant gift card is all that is required.  If a referring source wants to make a business of providing referrals to you, then they are referring you for the wrong reason and the quality of the referrals will reflect it.

WOM, word of mouth, is a new internet catch word, that describes a very old concept.  People do business with people they know.  The best way to expand your business is to train your friends, past clients and business relationships to refer you.  The result will be many successful business transactions.

Copyright © by Roger Patrick Ewing, all rights reserved.

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9 responses so far ↓

  • 1 Alex Beattie // Dec 20, 2009 at 11:49 am

    I had to read this 3 times. You have quite a gift Roger.

    Not only are you able to articulate your ideas eloquently, but your associates reflect your vision and see the long view as well.

  • 2 Roger Ewing // Dec 20, 2009 at 12:52 pm

    Thank you Alex. I am very flattered. I spend a great deal of time on my blogs, so I am not very prolific. It’s good to know you appreciate my work.

  • 3 Luxury echo chamber // Dec 22, 2009 at 9:50 pm

    [...] these tools to market your luxury properties.You can’t just a post blog and ask for feedback. You have to give away something first. Maybe not a lot, but a bit. So, if it means spending some time learning how to broadcast your [...]

  • 4 CYNTHIA // Jan 2, 2010 at 7:07 pm

    I’ve been looking all over for this!

    Thanks.

  • 5 Robyn Williams // Jan 10, 2010 at 1:29 pm

    I enjoyed this post. I thought the readers might also appreciate this white paper which describes a customer follow-up strategy which, if done correctly, can generate customer referrals. Below is a direct link to the white paper which bypasses the name and email collection web pages. This link should work until IT decides to change it.

    http://www.frequentfollowups.com/whitepaper.aspx

    - Robyn Williams

  • 6 Roger Ewing // Jan 23, 2010 at 12:27 am

    Thank you Robyn. Glad you enjoyed my post and thank you for visiting my blog. I visited your white paper site. You are correct, referrals are the way the world works. Cold calling and blind ads are old school, and while they may provide some small conversion, they are becoming more inefficient every day as a means of promoting business.

  • 7 Chris Saracino // Feb 23, 2010 at 10:24 pm

    Great post Roger…

  • 8 Roger Ewing // Mar 2, 2010 at 9:07 am

    Thank you Chris. I am interesting in learning more about your referral site as it develops. Keep me posted.
    Best wishes,
    Roger

  • 9 Luxury echo chamber // Apr 11, 2010 at 5:43 pm

    [...] can’t just a post blog and ask for feedback. You have to give away something first. Maybe not a lot, but a bit. So, if it means spending some time learning how to broadcast your [...]

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