Referrals 101: Are You Screwing It Up?

June 19, 2013 / in General Information / by Jason Terry

Post written by Jason Terry, Entrepreneur | Social Coach | Web Developer | Scuba Instructor | Guitar Player | Cruise Traveler | Lego Collector

How often do you get referrals?  If you’re like most businesses, not all that often.  There are lots of reasons for this… and I should probably write a blog article dedicated to the topic.  For now, I wanted to share my thoughts about referrals that you DO get.

The reason for this topic today is that I received a referral this morning from Rusty Fulling at Fulling Management & Accounting, Inc.  Rusty and I have referred business to each other a couple of times in the past few years, and Rusty is a client of ours for blogging, web and social.

I realized as I was thanking Rusty for the referral that I rarely get the same treatment when I refer business to others.

Is that weird?

Is it just me?

Am I being over-sensitive?

Let me know if this resonates with you because, personally, it doesn’t sit right with me. (or Mic…we’ve talked about this several times.)

What Do You Do When You Get A Referral?

When you get a referral, what do you do? Do you thank them?  Do you let them know how the referral turned out?  Do you tangibly thank them if they refer you a significant piece of business?

Please be completely honest with yourself.  My personal experience is that many people do NOTHING or close to nothing.  Can you believe that?  I know for a fact that the majority of small to medium sized businesses in Kansas City earn new business through word of mouth referrals.  That means that growing and succeeding DEPENDS on word of mouth referrals.

Referrals should be treated with the utmost respect.  They’re the biggest compliment that you or your company can receive.  When someone refers you business, they are putting a little bit of the trust and respect THEY’VE earned on the line for you.  It also means they’re willing to take that risk because they truly believe that you will do a good job for their referral.

How To Accept A Referral

1) We respond as quickly as possible to say thank you.
This can be an email or phone call, but the most important part is to be timely.

For example, here’s what I said to Rusty today for referring us a potential client:
“Rusty, that is AWESOME.  Thank you SO MUCH for the referral, regardless of how it goes… and I will let you know how it goes.  And if we earn a new retainer client out of this I will thank you more tangibly.  Mic and I believe that referrals are the biggest compliment that we can get and base the success of our business on them.  So we RESPOND.  And we follow up on the outcome.  Too many people don’t… I should write a blog article about that.  :)”

2) We research the referral on LinkedIn and their website.
You’d be amazed how much of a head start you can get on a new relationship with a little homework.  We find out all the people we know in common on LinkedIn.  We get a sense for who they are from their website (and if they need a new website).

It only takes 5 minutes, but the information is worth so much in the initial conversation.  That is where first impressions are formed.  If you’ve done your research and know a bunch of people they know, they will begin to trust that you’re capable and likely able to help them.

3) We talk on the phone or meet with the referral to see if they’re a fit.  One of the first things we say is how nice it was for our client and friend to refer us.
This ends up turning into a brief conversation about how they know each other.  Then we share how we know the person that referred us.

This sets the stage for trust. 

I’ve seen it so many times… the conversation starts out professionally (at arms length) and quickly turns into laughing or a more relaxed and comfortable tone, almost like we’re friends having the conversation, even though we’re talking or meeting for the first time!

4) We follow up with the person that referred us to let them know how the conversation went and whether or not we think we’ll do business together.
This is a great opportunity for you to PROVE that you valued the referral.  The fact that you’re willing to take the time to “close the loop” and let them know how things turned out will make them feel even better about referring you business.

And you WANT that.  So they will do it AGAIN.

5) If we do get the business, we make a point of telling our referral partner.
Sometimes this is an email or phone call.  Sometimes it is an Amazon gift card.  Sometimes it is taking them to dinner or golfing.  We try to thank people in relation to the value of the business they referred to us. If we don’t get the business, we don’t mention it to our referral partner because that does nothing to encourage a future referral.

How NOT To Do It

One of my horror stories is that I referred a local IT company $500,000 worth of VMWare project work.  It was 3 different clients.

I didn’t even get a THANK YOU. 

Shame on me for referring the third project to them… I eventually had the conversation with who I was referring business to.  I told them about the situation.  I also told them I would find someone else to refer the business to where it would be appreciated.

I was as nice as I could be about it… a year later they wrote me a long email about how that opened their eyes to thanking their referral partners.  I appreciated the letter, but why did they need the lesson?  Shouldn’t that be common courtesy?  Sadly, the answer is no because I have dozens of other stories just like it.

So, let me know…is it me or have you experienced the same thing? Why do you think that is?