A word of warning. By the end of this blog on how to get more business referrals you may well want to throttle me. Because the best tip is so blindingly obvious you will wonder why bothered to put finger to keyboard to suggest it. The reason because most people fail to do it, time after time.
Why do you need referrals?
Referrals are gold dust. Other than selling more or different services to existing clients, referrals are the hottest leads you will ever know.
I’m talking about personal recommendations in a B2B environment here. Even in an age of online reviews and ratings, where recommendations – and warnings – have been democratised, nothing beats the assurance of someone whose opinion you respect recommending someone they know or have used.
You want proof? In 2013, a Nielson Trust study found that 84% of respondents would trust a recommendation from a friend or relative compared to 68% who would trust an online review.
According to one statistic, often quoted by the late lamented Marketing Guild, but for which I have yet to find a source, referrals are 15 times* more likely to convert than a cold lead. Nielson puts it at just four times more likely.
Even at that modest level, referrals are clearly well worth having.
And worth keeping too. Customers acquired through word of mouth spend 200 times as much with you as the average customer – and they make twice as many referrals. (referralcandy.com)
Convinced? Ok, time for the big reveal.
Q: What’s the best way to get more referrals?
A: Ask for them.
Don’t say I didn’t warn you. It really is as simple as that. The more you ask for referrals the more you will get. It’s obvious, but so few people do it.
Another stat beloved by Marketing Guild found that 86% of customers said they would recommend their stockbroker to others, but only 12% had ever been asked.
And when I speak to new clients I’m often surprised at how few ask their clients for referrals
Perhaps it’s part of our natural British reticence, but if you’ve developed a cluster of clients to the point they are willing to be advocates you need to give them the chance to advocate.
When and how to ask for referrals
- When you first start working with a client it can create a hugely positive impression to say something like, “Referrals and testimonials from organisations like yours are our most powerful marketing tools so we want to make sure you’ll be delighted by our service.” If you’re feeling more assertive, you might even make referrals, testimonials and case studies a condition of working with you. I’ve seen one firm do this very effectively.
- At the end of a project. You do follow up every project – or every phase of a major project – with a wrap up meeting led by a senior representative don’t you? Of course you do. It’s important to build into that agenda a request for referrals, case studies and testimonials as a matter of course.
- When your team gets a compliment. If a client says something positive about an individual or a project, this can be an ideal time to ask for the referral. Treat this one with caution as it can be a little crass if done badly. More loosely, when the compliments begin to flow you get a sense of a client transforming into an advocate. Referrals will begin to happen naturally, but a subtle prompt always helps.
- When you get turned down. This tip via one of my mentors, David Oliver. If your proposal is unsuccessful you might be tempted to scuttle away and lick your wounds, but actually it can be a great time to ask for a referral. Many contacts feel a sense of guilt when they reject a proposal and you can offer a route to absolution. Express your disappointment at not getting the gig and then say, “But by now you’ve got a pretty good idea of what we can do and how we can help. Can you think of two or three people in your network who might be interested in hearing about us?”Sceptical? As I type I am awaiting feedback on a proposal submitted to a client I found using precisely this technique.
Make it easy for clients to give you referrals by telling them what a good referral looks like. Provide a profile to work with; you might say, “Typically we work with high growth SMEs that already have an HR director in place and need help finding business developers.”
To incentivise or not to incentivise referrals
There are numerous statistics indicating that incentives will increase referrals, particularly amongst consumers but this leaves me feeling more than a little queasy in B2B marketing. A contribution to a charity as a thank you might just about be acceptable; even that is open to misinterpretation.
Finally, an alternative view
And just to prove that for every marketing ying there’s a yang, Steve Gordon (who he?) warns against asking for referrals in this inc.com article.
While I don’t agree with his premise that asking for referrals makes one supplicant to the client, I recognise there can be some emotional resistance to giving referrals that a suitable gift, such as a book or research document, that can be forwarded to their contact might help overcome.
If you’re not getting the referrals you deserve get in touch for an informal chat about what else you can do about it.
* In researching this blog I’ve discovered this ’15 times’ statistic is remarkably prevalent in marketing. According to various blogs, incoming calls are 15 times more likely to convert than incoming web leads; responses to emails are 15 times more likely to convert than responses to social media; web visitors who watch a video are 15 times more likely to convert than those who don’t and those who become involved in a webchat are 15 times more likely to convert.
So I’d treat this figure with some suspicion, even though it helps make an important point.