Finding Good Referral Sources

Referral sources are like having unpaid salespeople—they can promote your products and services, inspire trust in your brand, and help connect you with potential customers you might not have reached on your own. However, choosing the right people to enlist as brand advocates isn’t always easy. Referral expert Dan Allison, founder of the Advisory Development Community and The Exchange, offers his advice, sharing the traits he instructs professionals to seek in clients and tips for fostering those relationships to generate greater referral activity.

What to look for

When identifying suitable referral sources for your company, focus on the following characteristics. Even if someone doesn’t possess all five, having the first two will increase their ability to provide a valuable connection—and with some coaching, you can help them develop the rest.

Comfortable providing referrals
First and foremost is determining who among your most important clients is actually willing to take a leap and make a referral. Allison refers to those who are happy to do so as “gold mines” and those who would never as “land mines.” A simple way to learn which category a person falls into is to ask during an interaction. If they are comfortable with it, you may have found a referral source. But if they aren’t, make a note so you know not to bring it up again to avoid harming that relationship.

Fanatical about your company
Your biggest fans will be some of your best referral sources. These individuals are easy to spot because they’re the ones continually giving repeat business and going out of their way to post reviews. Beyond delivering top-notch services and products, Allison recommends investing time in getting their honest feedback about what is exceeding their expectations and what you can do to improve—in other words, demonstrating appreciation for them and their opinions. “When a client feels valued in all their experiences with you,” he says, “they will confidently take the risk and recommend you to somebody incredibly important to them.”

Knowledgeable about what you have to offer
Of course, it takes more than enthusiasm to be a strong referral source; they also need to be able to articulate your company’s products or services. Allison notes that the average client can only list about 20 percent of the offerings that the business owner would, which could limit the number of referrals that person is able to give. After all, if a friend or family member has a need you can fill but your client doesn’t realize it because they don’t use that service themselves, they won’t think to recommend you.

Further, if they aren’t confident in your value proposition—why you are different from other companies who do what you do—it may be harder for them to give an impactful referral that convinces someone of your worth over your competitors. That’s why you should continually reeducate them on what you offer and why it’s top-notch whenever you see or speak to them to help ensure that this vital information gets and remains locked in.

Aware of your ideal client persona
Similarly, if you expect an existing client to be an effective advocate for your business, you need to make sure they clearly understand the key demographics you’re targeting. And that starts with understanding them yourself. “I see a lot of businesses that can’t really define who their target market is,” Allison says. “What do they look like? What characteristics do they have? And if you can’t say, there’s no way you should expect your clients to be able to.”

Take some time to discern the attributes of your ideal customer: their typical family situation, job, etc. Then subtly work that in during conversations with your clients, such as when emphasizing your value proposition, so they know who, exactly, your company aims to help. This will make it easier for them to recognize which of their connections—from friends to family to colleagues—may benefit from working with you and who to direct their recommendation to.

Willing to be active
A passive interaction where a client shares your contact information may not go anywhere unless there is a sense of urgency. Rather, you want someone who is willing to make a personal introduction, and that may mean discussing various methods with them to decide which will help make doing so the easiest. While such conversations may feel selfish and awkward, they don’t have to be. Allison advises to set aside “I” and “me” statements to focus on the value you provide. “For clients, referrals are truly about being helpful to people they may care about,” he says. “If you frame it that way when asking for one, there is no salesmanship involved in it.”

Connecting with referral sources

The process of recognizing ideal referral sources starts with a careful examination of your database. Schedule an in-depth conversation with your top clients to gather feedback and see if they possess, or could develop, the right characteristics. This interaction will not only tell you what they like about your company but may also help build stronger brand loyalty in the process.

After flagging a few potential advocates, you need to continue nurturing these relationships. You can keep your connections strong by:

• Adding them to your email list
• Contacting them quarterly or monthly so you stay top of mind
• Developing content they can share
• Educating them on your services
• Thanking them for any referrals they provide
• Following up with said referrals

Identifying your best referral sources could yield a wealth of untapped potential to serve new clients. Initiate steps for enlisting them, and you may just see your business grow by leaps.

TAKE ACTION:
Set up meetings with clients who typify your ideal audience, and assess their ability to provide valuable recommendations.