Most so-called referral systems aren’t worth the paper they’re printed on. They don’t work very well and they’re no more effective than any other old-school type of prospecting.
The problem with most referral systems (even the simple ones like "who do you know who…") is they are focused on the needs and desires of the salesperson.
They don’t focus on the customer. In fact they ignore what the customer gets out of the process, because the customer gets nothing! The entire process is focused on what the salesperson wants, which is a referral.
If I’m your customer, I don’t give a hooty-hoo about your sales quota this month or your sales contest where you can win a trip to Cancun. I really don’t care! Why would I?
So, how come so many sales people think that’s an effective way to get a referral?
If you want solid, worthwhile referrals, there is only one consistent and effective way to get them. And it’s so easy, you’d think more companies would focus on it.
Here it is (are you sitting down?):
Do things that make your customers want to tell others about you.
Crazy, isn’t it?
But it works. It works especially well because most people and companies don’t do this.
They think the only way to get referrals is by asking people for them. In fact, they think that just because I’ve done business with them, they have the right to ask me for a referral.
Maybe they assume they’ve done such a great job that I’m just sitting around hoping they’ll ask me for a referral.
I think most salespeople are scared when it comes to referrals. They fear if they don’t ask then their customers will not offer.
Because they won’t.
They won’t make referrals on their own because they have been given no reason to. The level of service in most companies is so poor that most customers wouldn’t even consider referring a friend or family member.
So, companies have decided it’s easier to ask someone for a favor than to offer them something of such value that they would be stirred to tell others about it.
And I guess that makes sense, to the companies and their salespeople. It is easy to ask people for a favor.
The problem is, being easy does not make it effective.
I know people will argue and say that asking for referrals does work. Sure, it produces names. But are they really useful names? Are they truly good prospects? I doubt it. People give names when asked because they want to be nice and they want to appear helpful.
But does that mean they give names of people who are interested in the product or service this salesperson sells?
Because most people, when asked for a referral, are caught off-guard. It’s not like they’ve been thinking about it. Since they have no time to consider the question, they usually offer up any names they can think of just to be helpful.
I only make referrals for two reasons:
One is when I have a reason to believe the person wants or needs what the company offers.
The second is when someone has delivered such memorable and unexpected service that I simply have to talk about it.
The first situation happens spontaneously. I’ll be talking with someone. They mention something about a product or service. This triggers my memory about a related company where I had a good experience. I tell them about it. Done deal.
This type of referral only happens because the conversation is relevant to the company and the person I’m talking with. There is a direct connection so it makes sense to make the referral.
If it’s not relevant, a referral is really no better than a cold call.
The second situation is the most fun. It’s based partly on what Mark Hughes (author of Buzz Marketing) calls the Six Buttons of Buzz.
Mark says, for people to spread Buzz (word of mouth marketing) they need to have a reason. The reason usually falls into one of six categories:
The Taboo (sex, lies, bathroom humor)
The Secrets (both kept and revealed)
If a topic of conversation falls into one of these six categories, people will likely talk about with their friends.
Now, let’s apply this to referrals.
As I said earlier, if you want referrals, you need to do things that make your customers want to tell others about you.
In other words, your customer must feel their experience in doing business with you falls into one of Mark’s six buzz categories. Since we’re talking about customer service, we should probably narrow it down to these four categories:
So, if you deliver a customer experience that nails one (or more) of these "buzz buttons" then your customer will have a compelling reason to tell others about you.
Doing this gets people to tell others about you naturally. They do it on their own, without being asked, because they want to. They make your business part of their day and they share you with their friends.
They do this because you have given them something no other company has: A memorable experience.
This is a good position to be in. This is a customer who will remember you. And who will return. With friends.
So, if you really want more referrals, try to find ways to deliver a memorable experience to every customer, every time they do business with you.
You don’t have to wear a gorilla suit or hire "Boinko" the clown though. There are better ways.
If you want to consistently deliver a memorable experience to your customers, find ways to incorporate the four "E"s into your customer service.
Enjoy – Enjoy your work and be fun to work with.
Exceed – Go beyond what your customer expects.
Extra – Do extra things for your customers on a regular basis.
Easy – Be easy to do business with.
Do this consistently and you’ll see your referrals go through the roof. I guarantee it.