A word of mouth introduction or recommendation to a business is a powerful weapon in the sales and marketing toolbox of any business.  Compared with a ‘cold’ approach to a some unconnected target, a ‘warm’ introduction to a prospective client allays fears of the unknown, qualifies mutual expectations and builds trust with the prospect. A ‘warm’ introduction is far more likely to result in a meaningful sale.

So how can a professional service business build their networks of referrals?

There are two schools of thought when it comes to seeking referrals:

On one hand, there are those who build large and extensive networks of possible referrers.  They add the names of everyone they meet into their marketing database.  They then sort them into A, B and C potential, use ‘background marketing’ (social media, newsletters, updates, Christmas cards) to automatically maintain communication, and then build a contact program relevant to the referral potential of each of the contacts.  The highest perceived value referrers get the best treatment:  football invitations, in-house training and lunches.  At the other extreme, the low value (but still important) prospective referrers may get invitations to larger seminars and group functions that are structured on a bigger scale.  Properly executed, these large referrer networks can work well where the individual drives the program methodically, makes all prospective referrers ‘feel’ unique and valued and where there is a need to constantly find new business. This particularly suits ‘transaction dependant’ professionals such as lawyers.

The other style of networking takes a more qualitative approach.  In these situations, typically where referrals are infrequent and of high value, a smaller group of referrers in complementary industries is sought.  For instance, an accountant may choose two or three lawyers, three or four bankers, a couple of stock brokers, engineers, a few academics, some financial advisors, complementary real estate specialists and perhaps an insurance specialist.  By focusing on just a few of the right prospective referrers, it is possible to work more closely and collaboratively with them for mutual benefit.  Sometimes these networks are formalised into groups and run with regular meetings in a business-like manner, together with a chairperson, a statement of mutual expectations, action minutes and importantly, a commitment for referrals.

In between these two styles is the right approach for any business.  But there are a few tips that can often improve success.

Firstly, the 80:20 rule always applies. Most referrals will come from a smaller group of supporters so your energy is wisely spent by identifying your best referrers and focusing on them.  Moreover, people who have already referred are highly likely to refer again… and again.  It is possible to turn them into what we have termed a “serial referrer”.  By understanding why it is they refer, these motivators can be identified and continually satisfied.

Do they want to help you, their client or themselves? Or all of these?  Whatever the motivation, it is important to recognise and meet their needs.  Always acknowledge their referral as soon as it is made.  If a meaningful gift is appropriate, do it quickly and effectively to show that you appreciate their help.

Secondly, existing clients are capable of being a great referrer but seldom do.  The ideal time to get referrals is when they are at their happiest. This is often in the first few months of an engagement in what is called the “honeymoon period”. Compared to their previous supplier, you are fantastic but in time, that enthusiastic support does decline a little. Nevertheless, happy clients can refer. But most clients still won’t refer unless they are “asked”!

Unfortunately, very few professionals want to do this properly.  It is easy and takes just a little mental effort to execute.  By taking the effort to meet with the client (preferably at their premises), by discussing where their business is heading and the challenges and opportunities they face, taking a genuine interest and then asking if they are happy with the service that you provide, a positive answer is usually forthcoming.  Now is the time to ask for the referral.

Perhaps one of the best ‘pitches’ is “as you know I am a junior partner in the firm and I need to build my client base to be successful.” Alternatively, “our practice needs new business to help us grow and be able to serve our existing clients … would you have any clients, colleagues or friends that might benefit from the type of work that we have done for you?”

Thirdly, be passionate.  There are lots of logical reasons why referrers should refer.  They may know that your products and services are great.  They may even know prospective clients that would benefit.  But they may fear that you wont do a good job and that may reflect upon them.  Passion can help counter that.  Build a sense that you will make this work just as well for their colleague or friend.  It is subtle but important.

Fourthly, be visible.  No point having a network of prospective referrers who never see you.  You must connect regularly and be reminding them that:

1. You are still here;
2. You provide a unique service;
3. You have an important value proposition; and
4. Here is another clever idea that I can share with you (along with the 3 items above).

Remember to follow up on your promises and commitments.

Finally, make it easy for your referrers to know what you want, and for you to know what your referrers want.  It might sound strange but most prospective referrers do not know what your ideal client looks like and how to go about selling you.  Consider the following:

• Write down the profile of your ideal client(s) in just one paragraph. Industry, size, people, culture, profitability, whatever you seek.
• Write down your Value Proposition in just one simple page. Who are you, what do you do, for whom and what value you provide to that type of client.
• Put it together on one piece of paper that can be left with the referrer.
• Practice saying it such that you have a:
  • 3 second (elevator pitch)
  • 30 second (noisy cocktail party pitch)
  • 3 minute (across a table pitch with a prospective client)
• Repeat your proposition to your people, co-workers, staff, clients, prospects, referrers, everyone, over and over again. Eventually, they will understand what makes you special.
• Reciprocal referrals are also easier if you know more about them. Find out who they are and what they seek and what makes them special.  No point referring clients to each other if they are not suited.

So, building a stream of regular referrals is not hard.  But it requires diligence and discipline.  The rewards for getting it right are huge and when successful, can easily outperform any other form of marketing.