In one of the greatest self-help books ever written, Napoleon Hill’s “Think and Grow Rich,” the author states that one of the Universal Master Keys to Success is creating mastermind groups, which are small groups of experts, advisers, and mentors that focus on assisting you with your business, career, and life. I could not agree more, as I’ve stated many times that the most important thing I’ve ever learned is this: you become what you focus on and like the people with whom you spend time. Along those same lines, it is also my firm belief that another Universal Master Keys to Success that will absolutely grow your business is obtaining referrals.
The Power of Referrals
In his wonderful book, “The Referral Engine”, my good friend John Jantsch points out that nearly 80% of all NEW clients and NEW business brought into most companies come directly from referrals. However, only about 23% of businesses have any kind of organized referral system. Do you, like me, see the huge opportunity here to grow your business?
According to Jantsch, the power of glitzy advertising and elaborate marketing campaigns is on the wane; instead, word-of-mouth referrals are what drive business today. People trust the recommendation of a friend, family member, colleague, or even stranger with similar tastes over anything thrust at them by a faceless company. Therefore, the goal must be to harness the power of referrals in order to ensure that steady flow of new customers that will grow your business, and then to keep those customers happy, loyal, and engaged so that they refer your business to even more customers. This is the very definition of a virtuous cycle.
The Referral Engine
Some of John’s recommendations for how to build the referral engine that will grow your business include:
- Talk with your customers, not at them. Thanks to social networking sites, companies of any size have the opportunity to engage with their customers on their home turf as never before, but the key to engagement is listening.
- The sales team is the most important part of your marketing team. Sales people are the company’s main link to customers, and customers are the main source of referrals. Therefore, getting your sales team on board with your referral strategy is critical.
- Educate your customers. Referrals are only helpful if they are given to the right people. Educate your customers about to whom they should be talking.
The Referral Cycle
The secret to generating referrals to grow your business lies in understanding what Jantsch calls the “Customer Referral Cycle”: the way customers refer others to your company who, in turn, generate even more referrals. Businesses can ensure a healthy referral cycle by moving customers and prospects along this path of action: Know, Like, Trust, Try, Buy, Repeat, and Refer. If everyone in an organization keeps this sequence in mind and focuses on it daily, with every customer and prospect, then your business will generate referrals like a well-oiled machine, and that well-oiled machine will grow your business.
Let me give you an example from my own business. When a new client hires me to do a workshop or deliver a speech, at the beginning of the process, I say to them:
“I am totally going to work my butt off to deliver the highest quality program I possibly can for your attendees. So, if I deliver something that significantly exceeds your expectations, then I’m going to ask you to send a strong personal referral to a minimum of ten of your colleagues, letting them know about what a wonderful job I’ve done for you and suggesting that they consider hiring me for their next workshop or speech. If I absolutely earn that, will you agree to send the referrals for me?”
I have never had a client say no to this request, especially since it is all based on me first delivering a truly superb speech or workshop. So, if I hit it out of the park, they are willing to send my name along to 10, 20 or 100 of their business associates, knowing that if any one of them hire me, I would work just as hard for them. It makes the client feel good to refer business my way and confident that if one of their friends takes their advice, I will make sure that they are 100% satisfied, which is a true win-win for all involved.
The Referral Technique
I also have another referral technique that works extremely well. If a client or even an attendee of one of my speeches or workshops approaches me after I have just finished my presentation and says, “Wow John, that was a fantastic speech. Thanks for all of the great ideas and information”, then I immediately say to them:
“Thank you so much for that very kind compliment: I appreciate that a great deal. Actually, the best way you can thank me would be to tell a whole bunch of people you know about how much you enjoyed my program and how much value you took away from it. In eighteen years of doing this for a living, I have learned that 99.9% of all of my new business comes directly from happy customers telling their friends and business colleagues about the work I do. It would be great if you could take five minutes to send out a handful of emails to anyone you feel would enjoy the sort of presentation you just saw.”
Having a set response like this, that is well thought out, professional, and honest, has been one of the most powerful referral tools I have ever used. Do you have something like this for your business? How do you currently ask your best customers, in a professional, clear, focused and comfortable way (NOT a memorized script!), for them to please send you several dozen targeted referrals?
The Referral Template
These questions bring me to my next point, which is: it also helps if you make it really, really easy for people to send a great referral your way. As John pointed out, the first step in this process is to help your customers clearly understand WHO is a good referral for you and who represents the kind of clients you want to gather. After that, you need to make it almost effortless for them to refer you to lots and lots of the right people so that they can help you grow your business. For example, if you have a client who is enthusiastic about sending referrals to you, you might simply type out a short note that they can use as a template. Here is an example of what I send to my customers when they agree to send out an email on my behalf:
I hope this note finds you doing very well. I recently listened to a really fantastic speaker who said that if he hit a total homerun, we should thank him by telling 15 to 20 of our colleagues about his work. Well, because he did such an awesome job, I wanted to honor his request. I am writing this note to highly recommend John Spence. His session was fast-paced, engaging, fun, and full of truly useful information. Here’s a link to his website so you can take a look and see what sort of programs he presents. He does a really super job: www.johnspence.com
I simply send this template to my client and ask them to look over, customize, or change it in any way that makes them comfortable, and then e-mail it to anyone they feel would find value in the work I do. Some clients don’t send any emails; some clients send a handful; and a few very special clients send it on to dozens and dozens of people. I promise you, there is no advertising or marketing program in the world as powerful as a happy client sending several dozen emails to their clients and colleagues to strongly recommend your services – it is absolutely pure gold!
The Growth of Referrals
So there you have it. Obtaining referrals is a Universal Master Key of Success that will grow your business. However, you can’t just sit back and “hope” that your clients will refer you: you need to turn your business into referral engine! And how you do that? By following these steps:
- Talk with your customers. Use social networks to engage your customers and generate referrals.
- Get everyone in your business involved in asking for referrals.
- Help your customer understand WHO is a good referral for you.
- Make it incredibly easy for your customers to give you referrals.
- Ask for referrals ALL the time.
- And most important – do such amazingly awesome work that you truly EARN tons of referrals!!!
I hope you found this article helpful and that you put these ideas that will grow your business to good use!
Wishing you every possible happiness and success,