Achieving Business Excellence with John Spence

How To Drive Quality Referrals

Last week I had lunch with the president and the director of “communication and exploration” of one of the most interesting and impressive companies I have ever encountered. The name of the firm is ThemeWorks and they design and create absolutely incredible, innovative and highly accurate “themed fabrications” for museums, theme parks, zoos and other attractions. In other words, they build really cool shit! (Go look at their website and you will see what I mean – these people are amazing artists: click here).

After spending some time discussing the mind-blowing projects I had the chance to look at in their studio, the conversation turned to how to grow the company and expand its reach into new markets (such as designing and creating themed environments for large corporations who do multiple trade shows every year) . Like many companies, ThemeWorks had grown from a few friends working out of an apartment into a large and highly successful organization based almost 100% on: word-of-mouth referrals.

As Scott, the president and founder of the company put it, “I just figured if we did really, really fantastic work and treated our customers great, they would continue to give us their business and tell all their friends about us.” And they did! And the company grew and grew!! But what I told Scott is that in order to take it to the next level you cannot simply “hope” that exceedingly happy customers will continue to drive new business and new customers to your door – you must become proactive in helping your very satisfied customers actively send you highly qualified new customers through a system and process of generating large numbers of superb referrals.

Let me use myself as an example. For the first 15 years of my career as a corporate trainer, professional speaker and executive coach I figured that if I just did 10 times more work than my peers, came in early and stayed late, sweated every single detail and dedicated myself to adding more value and being more customer focused than any other person in my industry… everything would work out fine. And it did! My very happy customers referred me to lots of other great customers and kept me just about as busy as I could possibly handle for more than a decade. But in the last few years even my best customers have had to cut back on their training and events budgets and I found myself, for the very first time in my career, in the position of having to actively pursue new clients and ask for referrals. It was then that I ran across the work of John Jantsch and his wonderful book “The Referral Engine” and attended one of his seminars where he helped me understand that building a steady stream of excellent referrals must become a strategic objective of your firm with a process to ensure that it is flawlessly executed.

I told Scott that what I have learned was instead of totally busting my butt to make sure I delivered far beyond the customer’s expectations and then “hoping” that I would get some good referrals, I now set a clear expectation with my clients before I deliver my program by saying to them… If I deliver program that significantly exceeds your expectations, and I get the highest scores possible from the attendees of my speech, I am going to ask you to promise to send a personal letter of referral to at least 20 of your peers and strongly encourage them to do business with me.” Because I share this expectation at the beginning of the relationship, before I have delivered any training or speeches, and tell them that I am only asking for a referral if I 100% earn it by doing a world-class job… the client is typically very accommodating and will happily agree to the deal. It is then incumbent upon me to spend every waking moment to make sure that I deliver on all of my promises and clearly exceed their expectations. If I do that (which is what I strive to do every time I step in front of an audience), I now have a client who has made a personal promise to send 20 very enthusiastic referrals to their top clients and colleagues. Wow – talk about a referral engine! Imagine if every one of your top customers sent 20 strong referral notes for you next month - there is no doubt that it would have a huge positive  impact on your business.

So Here Is The Lesson: for many, many companies 85% or more of their new business comes directly from word-of-mouth referrals (for me it is 99%) – therefore if you want to generate the most quality referrals possible it is critical that you change from a reactive stance of “hoping” that your clients will send you referrals – to a more proactive stance that sets the upfront expectation of:  “If I absolutely deliver superior quality and value to you Mr. or Ms. Client, I am going to expect you to send out 20 or more superb personal referrals to key clients that you feel would truly value the kind of work I just delivered for you.”

Important Question: Have you created such a referral process to ensure that your customers actively refer you to highly qualified potential new customers?

Most Important Question: If you are one of my clients (or just somebody who really likes the work I do) have you sent the 20 wildly enthusiastic referral notes on my behalf yet?????

I hope you found this post helpful, I look forward to your questions, comments, concerns, feedback and… referrals. Have a fantastic day – John Spence

Comments

comments

Comments

  1. Great article. I admit I’m chicken to say this to my clients. I always shy away from “sales” talk. But, as a bookkeeping service, it’s very true that most of my new clients are by referral. I stand challenged!

  2. Great post, John. For 10 years my web design business has also been 99% based on referrals and we’ve had to do very minimal “sales.” We just do great work and provide great customer service and that has kept us busy for a decade.

    But last October our largest client (responsible for 40% of our income!) was bought by a larger company who no longer needed us. Scary times! We tapped our happy customers and while we haven’t made up for the loss completely and are having to experiment with traditional sales and marketing, it’s kept us in business.

    Asking for referrals is now a top priority. We make a point to do it often! Being a non-sales person, it takes a little getting used to, but the rewards are worth it and we haven’t had a client who doesn’t want to help.

    The key is to be specific about what type of referral you want. For instance, we launched a great site for a medical technology company. We want more of those types of projects, so are asking specifically for medical technology contacts. A happy client knew someone and sent him our way.

  3. Great Point John, I have been in sales for over Ten years and have never really asked for my customers to give me a referral. I guess I just hoped and thought if I delivered and did what I said I would then maybe they would tell others. I will try this to see how it will work for me.

  4. Hi John,

    John Jantsch’s book is an incredibly easy book to follow with some great info inside, a book for every business. Thanks for posting this article, it’s always good to remind yourself of the things can can work for you, as sometimes, they do slip by the way side. Thanks John.

  5. Hey John – loved your story here. And, while good ideas are a dime a dozen (including my own), it’s your brilliant execution that’s making them pay off. Nicely done!

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