A substantial part of your business can come from referrals. The key is to provide extraordinary customer service and educate your clients and influencers to this fact. You must actively cultivate referrals; otherwise you’re just leaving it to chance.

Referral Marketing Start with Great Service

The foundation of great referrals is great customer service. A large part of your business can be generated through referrals. Make an investment in your business and your client’s satisfaction by doing excellent work.

Characteristics of a Referral Marketing Source

Understanding the characteristics of a strong referral marketing source, allows you to spend your time with the most qualified prospects. Below are the conditions of the optimum referral marketing source:

Must have a relationship with your target client

Must understand your target client profile

Must be educated on what you do

Must respect you and your company

Must be respected by your target client

Must be motivated to refer clients to you

Existing Clients

You should regularly ask for referrals and you should have a formal referral marketing program with your existing client base. We simply send a letter out regularly to our clients explaining that we would rather spend our money enhancing our services then marketing for business. We ask for referrals. We send coupons that can be distributed, business cards, and newsletters that can be forwarded. We’re not pushy; we just are up front that if they are satisfied with our services they should recommend us.

Complimentary Vendors

With other vendors you need to be more formal about your referral marketing arrangement. The promise of mutual reciprocation rarely works. Immediate gratification does. If you’re clear about the value of the client calculated earlier in this section, then be generous with your fellow vendors when they bring in a client. If you’re going to make a profit of $10,000 over the life of the client, writing a check for $1000 to the referral marketing source shouldn’t be painful.

You may have friendships with some of these vendors but they’re also business people and should be concerned that they spend time improving their bottom line. When you propose a solid cause and effect financial arrangement, you’ll get significantly better results.

Evaluate all the businesses that are non-competitive but end up doing business with your target client. Examples of this are:

Cabling Companies

Management consultants

Phone Companies

Software Companies

VARs

Hardware Companies

Make it worth their while and put the offer in writing. It could be a major source of new leads for you.

Seminar Participants

If you provide great value at your seminars, this could lead to a lucrative referral marketing pipeline. But like anything else, you must consciously cultivate the referral marketings. Include extra business cards or coupons in the seminar package and on your evaluation questionnaire, specifically ask if there is somebody the participant knows that could use your services or should receive a discount coupon for the next seminar. Ask and you shall receive.

Professional Services

Some of the best referral marketing sources you have available are from those that provide your company professional services. You’re their client, so they’re naturally inclined to provide extra value. They also have a great deal of insight into the work you do and your success. Examples are:

Bankers

Leasing agents

Commercial real estate broker

Accountants

Attorneys

Secondary sources that could surprise you are:

Regular delivery people

Vendor contacts; office supplies, hardware, etc.

Cleaning services; contact the managers or owners

Cultivate and groom these sources of referrals. Behave professionally in all of your interactions. Keep them informed on new clients, products and services, press and so on. Supply them with business cards and actively ask for referrals.

Other referral marketing Sources

There are other referral marketing sources that may have already generated business for you without having a formal referral marketing system in place:

Friends

Members of your church

Neighbors

Employees

Prospects If they don’t buy, ask for a referral

Members of other organizations you’re associated with school, political, etc.

When to Ask for Referrals

You should always be asking for referrals if you deliver a quality product or service. There are times when you’ll get better results than others. Here are some guidelines for when to ask for referrals:

After signing a contract.

Periodically with a letter, say once a quarter

When successfully completing a project and your client signs the final approval.

When a prospect turns you down. Guilt is a beautiful thing.

When you’re doing a client satisfaction survey.

When you’re calling an inactive client.

When you’re calling an active client.

If you’re unclear on how to ask for a referral, here are some variations to try:

It was a real pleasure working with you and I look forward to our next project together. In the meantime, if you know somebody that needs quality software development services, I hope that you pass on what a good experience you had with our company and have them give us a call.

I’m glad things are going well for you. Do you have any acquaintances that might need my company’s services?

Keep Them Informed

You should keep the referral marketing source informed during the early part of the new relationship. You’ll get a sense of how much but at least make a call and tell the source “Thank you” for the referral. Inform them that you’ve met, started a contract and then simply ask them if they want to stay informed on their referral.

You should almost always send a letter thanking the referral marketing source. It’s polite and prudent. If it makes sense, you can send them a credit for your services, a dinner for two or tickets to a ball game. Show your appreciation.

Motivating Referral Marketing Sources

Motivating the referral source depends on the kind of relationship you have with them. If it’s an existing client, it may be as simple as just providing stellar service and actively requesting the referral. For vendors and professional relationships, setting up a formal commission that is attractive is more effective.

And don’t forget to give referrals yourself. If you can comfortably recommend a company, you’ll build reciprocation credits and it doesn’t take a lot of effort on you’re part. The key is to refer only businesses that can really deliver and then make sure you follow-up with the vendor to see how the relationship is going.

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Converting your sales business to a referral-based model requires you to rethink and rework your mindset. You must become thoroughly immersed in the referral-selling model. Your clients and prospects must believe that your business is built on referrals, and for them to take your statements and proclamations of being referral-based seriously, you must project the professional attitude of a referral-based salesperson. In other words, you must act the part to become the part.

This acting the part to become the part is more difficult than it may sound. It requires that you completely buy-in to the idea that your business is built on referrals even if at this point in time you receive few referrals. It requires you to retune your thinking so that everything you do and say conveys your referral-based business.

Why is it so important that you retrain your mind to think as a referral based salesperson? Simply because generating a large number of highly qualified referrals is a process that begins from the moment you first meet a prospect and continues throughout the relationship hopefully for years. In addition, as mentioned previously, the prospect and client must take your assertions of a referral-based business seriously.

The process of referral generation requires that you constantly plant and water referral seeds in both your clients and prospects. That planting and watering must become part of your nature. You must be able to drop the seeds and then water them smoothly, without any hesitation or clumsiness. This requires a state of mind that is ever mindful of the opportunities that present themselves, as they present themselves.

So, how do you develop this mental attitude? First, and foremost, you must decide that becoming a referral-based salesperson is what you want to do. Many salespeople try to develop a referral-based business in a half-in, half-out manner. They want to be able to pick and choose whom they will present themselves as referral based to and whom they don’t. It doesn’t work that way. They fear that if they project themselves as strictly referral based they will lose the opportunity to take on non-referred clients. This is far from true.

As a matter of fact, presenting yourself as exclusively referral-based will enhance your ability to attract non-referred customers. People want to work with the best. They want to purchase from the leaders in the industry. The more exclusive you become, the more people want to work with you.

Think about the times you’ve passed a jewelry or furniture store whose sign reads “By Appointment Only.” What is your reaction? You want in the store. You want to know what is so exclusive that you have to make an appointment just to see it. Moreover, you wonder if you can afford it. And if you get in and find something you can afford, you buy it. Why? Because it came from that store. Then you tell all your friends about what you bought from such-n-such store and how exclusive the store is, and how special your purchase is.

The same psychology works with selling. The more exclusive you become, the more people want to work with you. Just because you promote yourself as referral only doesn’t mean that you cannot take on non-referred clients. You simply explain to the prospect that even though you work from client referrals, you will be happy to take them on as a client. Even new salespeople with virtually no client base can use this format. A simple greeting such as, (prospect’s name), I normally work only with (people or companies) that have been referred to me by one of my clients, but I have room to take on an additional client at this time and I would be happy to work with you.? You’ve established with the prospect that you are a referral-based salesperson, but have given them a reason that you would be willing to make an exception and take on a non-referred client.

However, this approach will not work for long if you then convey through your words and deeds that your statement was nothing but a lie. Once you establish yourself as referral-based, even when taking on a non-referred customer, you must maintain the referral-based attitude. If you don’t, you come across as a fraud and you immediately lose credibility.

If you cannot or will not commit yourself wholeheartedly to becoming a referral-based salesperson, you are better off simply learning some of the referral generating techniques and using them within your selling system. Don’t try to mix a referral-based system with a non-referral based system. It doesn’t work.

Secondly, after determining that you want to become a referral-based salesperson, you must change all of your marketing material to reflect your new sales methodology. Change everything. Your business cards, stationary, email signature, marketing fliers, website, everything must reflect your referral-based business. This becomes the point where many salespeople begin to reconsider their choice. They worry that by advertising to the world that they work from referrals, non-referred prospects will pass them by. Again, the psychology of the sale is that the more exclusive you are the more people want to work with you.

When constructing your marketing materials, make sure your statements are bold and straightforward. Referral taglines such as, I (heart) referrals, or I Love Referrals,simply communicate that you like to get the occasional referral. That isn’t the message you want to communicate. Something more bold such as, Appointments by Referral Only, or Referral Based, Client Centered, work well.

Not only does your referral statement communicate to your prospects and clients that you are a referral-based salesperson, it also communicates to YOU that you are referral-based. It is a constant reminder to you that your mindset must be that of a referral-based salesperson.

Once you have changed your marketing materials, you must change your discussion with both clients and prospects. Think in terms of referral seeds and watering those seeds. Look for opportunities to remind your clients and prospects that you are referral-based and that you expect referrals. If you follow the techniques and strategies in Creating a Million Dollar a Year Sales Income: Sales Success through Client Referrals to insure your client knows that your expect referrals, that they know exactly what a referral for you is, and that you know exactly what the client’s expectations and priorities are in the sale, you can freely plant, water and weed your referrals throughout the sales process without fear of being overbearing or alienating your clients and prospects. However, in order to do this successfully, you must have developed a referral mindset. If you haven’t you’ll sound unsure of yourself, or, worse, insincere.

Develop your referral-based infomercial and then repeat it to yourself so often that it is second nature. Not only does your infomercial communicate your referral-based status to your prospects and clients, it helps to develop your mind. As you think through and develop your infomercial, repeating it over and over to yourself to the point that it truly is a natural part of your thinking, you are convincing yourself of your referral-based business model. You are in the process of selling yourself as you are in the process of preparing to sell your prospects and clients.

A referral-based selling model can be naturally integrated into any selling system. It makes no difference what the product or service, whether you are an outside or inside salesperson, or whether you’re new to sales or highly experienced. All it requires is learning and perfecting the techniques and strategies of referral selling. But these tools won’t work if you are not first convinced that you are a referral-based salesperson. Convince yourself and you’ll convince your clients. Convince your clients and use the techniques and strategies in Creating a Million Dollar a Year Sales Income: Sale Success through Client Referrals, and the referrals will come.

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One of the key roles of management is to build business through relationships. A common way to build relationships is through referrals: with, for and through banks, attorneys, employees, peers, and anyone else who has something that someone else wants or needs. The better you are at managing the referral, the better off you and those in your organization will be. Unfortunately, even though most referrals start with good intentions, they’re conducted haphazardly and don’t yield the results people expect. It’s often the reason that referrals are not offered. Who wants to be burned? The tips in this article should help you control the outcomes and get what you want.

Everyone has been embarrassed by their association with another person at one time or another. How about that cousin you wouldn’t want anyone to know about? But what happens when the embarrassment happens in a business situation: more specifically, when you refer one person to another and one of those parties is unprofessional or just plain screws up? Making a bad connection could cost you money or something more valuable and much harder to recoup your reputation.

We once stepped into an awkward situation when we referred a business peer, seeking a specific product, to one of our clients, who just so happened to offer that very product. We thought we were doing a good thing, a win-win-win thing until we received a phone call from our client explaining that the referred person made a vulgar offer to a woman on the client’s staff when she said she couldn’t go any lower on her price. We were shocked. Our client ended the conversation with, “I’m not sure what to do, but what he [the business peer] did was disrespectful to my staff and to you. I’m going to let you handle this.” The outcome was hardly the one we were shooting for. All we could do was apologize and hope our reputation didn’t take too big a hit.

The referral is part of Business 101, and it’s a valuable way to extend your business connections. Typical referrals involve three parties: the person who wants something, the person who has something to give, and the person who connects the two. Sounds simple and clean but as our bad experience shows, sometimes things get messy. So what can you do to facilitate successful referrals? That depends on which of the three roles you’re playing. Here they are.

The person who wants something. If someone connects you to another party, remember to:

1. Respect relationships that others have developed. Consider it your way of saying “thanks” to the person who made the connection.

2. Stay professional and avoid being too casual or friendly. A referral ONLY opens a door of opportunity. You’re still responsible for building your own relationship.

3. Conduct yourself in a way that honors the “referrer.” Your actions represent yourself AND the person who gave you the referral.

4. Leave foul language at the door. Everyone has a different tolerance point.

5. Keep ethics above board. To do so will net you a double win. To fail will curse you with a double loss at the very least. Good news travels; bad news travels faster.

6. Check the ego. Don’t believe that your credentials, awards, accomplishments and the referral impress everyone so much that you can leave your manners at the door.

The person who has something to give. If someone sends business your way, make sure you:

1. Deliver what you promise, and promise only what you KNOW you can deliver. If you find that you can’t help out, be honest about it and say thank you.

2. Make good on any mistakes that occur. People understand that errors happen. Keep both of the other two parties interests in mind when taking responsibility for those errors.

3. If you want to keep the referral business pouring in, make sure you meet or exceed the expectations of the person doing the referring. Hint: they’re expecting you to make them look good.

4. Never bad mouth the person who referred the business or the one providing the service. What you say will almost surely get back to them.

The person who connects the two. Before you connect one person to another, make sure you:

1. Know whom you’re dealing with. Only connect people who will show you in a good light that goes for the person who wants something as well as the one who has something to give.

2. Aren’t connecting people for the soul purpose of getting reciprocal referrals. A client in Boston complained about giving out referrals but rarely getting them in return. Instead of expecting referrals, he learned that the real value came back to him in the form of strengthened business relationships with others.

3. Kick off the transaction in a professional fashion. Whether by telephone, email, or in person, set a tone of respect by introducing each person as a respected professional.

4. Butt out when you see the relationship blossom. Chalk up the connection as another success and move on.

Referral etiquette is basically pretty simple. Behave yourself, respect others, and do the right thing. Then make sure you deal only with those who do the same. The combination is a winning formula for building new business relationships and strengthening old ones.

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