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Saturday, August 21, 2010

CONNECTING IS NOT ENOUGH: Ten Steps to a Simple Referral Strategy: Part One – The Groundwork

Connecting Is Not Enough with Andy Lopata

In the first of a two part article, Business Networking Strategist Andy Lopata looks at the simple steps you can take to develop your own referrals strategy.

In Part One Andy looks at:

- What a referral is

- Your ideal referral

- Where your referrals are going to come from

and leaves you with a simple exercise which will help you take your strategy to the next level.

Referrals are the lifeblood of any business, yet so many of us leave them to chance. While we might devote time and resource to advertising, email marketing, telemarketing, PR and direct mail campaigns, we take a more passive approach to referrals.

After all, if we do a good job, people will refer us. Isn’t that right? Yet how often have you gone out of your way to refer someone who has just done a ‘good’ job. Not exceptional, just what you’d expect?

We need to be more proactive than passive when seeking referrals. To help you, here are ten simple steps to implementing a strong referrals strategy.

What are you looking for?

Tip One - Understand the difference between a tip, lead, recommendation and referral

There are many different types of business information we can receive. There is a greater chance that the introduction will convert into business if the quality of the interaction between our ‘champion’ (the person referring us) and our prospect, is strong.

A tip is a piece of information that indicates someone needs our product or service; a lead will give us a contact name and number. In both cases there is still a lot of work to do and they are just the start of the sales process. At this stage our prospect knows nothing about us, we have just been told about them.

People often mistake recommendations for referrals. If I tell someone about your services and suggest that you can help them, I am recommending you. I’d then pass your number to your prospect and suggest they call.

If they do ring, that’s great. You will convert more of this type of inquiry than any other. After all, the prospect is already motivated enough to pick up the phone and place a call to you. However, how many opportunities do you miss because your champions have recommended you to people who don’t pick up the phone…and you never knew they existed?

So, tips and leads leave us with a lot of work to do. Recommendations leave us looking at the phone and waiting for it to ring. Referrals, however, make life so much easier.

There are three steps to referral heaven:

1 – Someone has a need you can fulfill, a problem you can solve or a desire you can satisfy.

2 – Your champion recognises this need and speaks to the prospect. Following that conversation, they are interested in how you can help.

3 – They are expecting your call.

Tip Two - Who is your ideal referral?

Ask many business people this question and they will struggle to answer. If they can, they will describe a typical client.

Let’s imagine for a moment that you need 100 clients in a year to meet your targets and you convert one in every three referrals into business. Therefore, you are looking for 300 ‘ideal referrals’ every year. Does that sound achievable to you?

Take some time to work out the most powerful introductions you could receive. They could be to clients with whom there is the opportunity to provide a range of services over a long period of time. They could be to people who speak to a lot of your potential clients and can introduce you on an ongoing basis. They may even be to someone like a newspaper editor who can provide you with good publicity that will help you reach thousands of prospects.

If someone asks ‘how can I help you?’, don’t waste the opportunity by not knowing how best to respond. Do your homework first and understand the introductions that will have the biggest impact on your business.

Where will they come from?

Tip Three - Recognise who's in your network

Think ‘referral’ and most people think of their clients. That’s a natural link, after all our clients are the people who know the value of what we deliver the best, so shouldn’t they be the people to refer us? They are. But they are not the only ones.

Other people look to networking events for referrals. You can meet people at networking events who may refer you, but you will still have to build a relationship first, inviting them into your network. It is from your network that you get the support and referrals you need. Events are just a way to build your network and make it stronger.

You are surrounded by people who might be in a fantastic position to refer you, but you may not have recognised that. Look back at your list of ideal referrals. Now think about the people in your network and who they know. Think of your friends, family, suppliers and old colleagues. Think about people you meet socially or parents of children who go to school with yours.

We pigeon-hole people based on our relationship with them and interact accordingly. Everyone in your network has a network of their own, however. If your relationship is strong they will probably be happy to help you... you just have to recognise how.

Tip Four – Know who to turn to for referrals

To decide who is best placed to refer you, look at three key factors.

1 – How much do they trust you and your business?

Will they want to refer and help you? Will they go out of their way to look for opportunities? And how persuasive and committed will they be when speaking to your prospects?

2 – How well do they understand what you do?

Can they recognise opportunities for you without your prospects spelling it out? In other words, can they tell from someone’s situation that they will have a problem that you can resolve? When speaking to your prospect, do they have a strong enough understanding to answer initial questions and arouse sufficient interest for the prospect to want you to call?

3 – Opportunity to refer

Do they speak to the right people? Are they influential in the right circles? After all, your mother may trust you and understand what you do, but is she in a position to be able to refer you?

Tip Five - Pick 5 potential champions

Now that you have a clearer picture of who is in your network and who is best placed to refer you, write down five names of people you think could be referring you but either aren’t at the moment or could do so more.

Don’t restrict yourself to the obvious candidates but challenge yourself. Who haven’t you thought of as potential referrers before but fulfill the three criteria above? If you asked them to refer you, how would they feel about it? Try to sense their gut reaction.

Give each of the five a score out of ten for the three criteria above. How do you think they would rate on each scale?

In the next five tips next month we will look at how to increase these scores, inspire those people to refer you and how to ensure that your new approach is both effective and productive.

Are you struggling to put an effective networking or referral strategy into place? Do you want to know more about how to ensure you get the maximum possible return from your networking?

Visit Andy's brand new website at for more resources and ideas about how Andy can help you.

Andy's new book, on how to generate an effective referral strategy, will be published in early 2011.

Andy's Audio program, "Networking in Ninety Minutes," will give you the tools you need to make the most from your networking. Available in CD or mp3 format here.

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