So, we all know that getting referrals is a great source of new business. If someone is referred to you there's a bunch of inbuilt trust and credibility that makes it much more likely they'll become a paying client (and you don't have to go out hunting for them either!).

The problem is: few of us get enough referrals.

The biggest cause if this, in my experience, is that the people we'd love to refer us are often hesitant to do so. They like us. They trust us. They think we do good work. But there's something that holds them back, even if you ask them directly.

I explain what it is and how to get over it in this week's 5 minute marketing tip video…
 

 
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Video Transcript

Hi. It's Ian here. Welcome to another 5-minute marketing tip. This week's tip is about how to motivate or incentivise people to refer you more often.

Now, we all know that referrals are a great way of developing new business. If someone refers someone to you, there's a good chance they'll become a client because there's a high degree of in-built credibility and trust already there. Problem is most of us just don't get enough referrals. One of the biggest reasons is that even if someone would like to refer us if they like us, they trust us, they know we do a good job, often, they're very hesitant to do so. I'll explain why and how you can get over that after the break.

Hi. It's Ian. Welcome back. So why is it that people who like us, trust us, who think we do a good job, why are they hesitant to refer us? The answer is in the way that we often ask for referrals. Most common we ask for referrals, we ask for an introduction to someone, and the unspoken message is that when you introduce us to that person, we will see them as a potential client, and we'll try and get a meeting with them, and we'll try and bring them on board as a client. In other words, we'll try to sell to them.

Now, of course, we might be expecting to build a relationship in a very nice way and nurtured, et cetera, but the risk for the person doing the introduction is that essentially, they're setting up their friend or their colleague that they're introducing us to for a sales meeting, and nobody really wants a sales meeting, especially if the person doing the introduction doesn't know that the person they're introducing us to actually needs our services right now. It could be a wasted sales meeting, so that's what's causing the hesitation.

Now, often, many attempts to try and motivate people to refer you or incentivise them to refer you miss the point, so they'll offer a financial incentive for people to refer. That works in some industries where it's accepted practice, but most of the time, it doesn't work all that well, and that's because it's not hitting the reason why they're not referring it. The reason why they're not referring isn't that they're not motivated to. Usually, liking you and trusting you is enough to motivate them to refer you. The problem is this hesitation and this unwillingness to set someone up with a sales meeting, and incentivising them by paying them some money to make the referral doesn't help with that. In fact, it makes them feel a little bit sleazy about it.

Here's what works better. It's to use what I've called in the past the “Dropbox Strategy.” If you've ever signed up for Dropbox before, probably, you will send the link by someone, a friend of yours who said, “Hey, I've just joined this great service, Dropbox, free online storage. If you click this link, you'll get some extra storage.” The point with that is if you click that link and signed up for Dropbox, then the person who referred you, sent you that link will get some extra storage on their account. That's their incentive, but crucially, so will you if you sign up via that link, so it's a dual incentive.

It's not just incentivising the person sending the link, it's also giving you a better deal than you could've got if you just gone to the Dropbox website. That means that the person sending you the link feels good about themselves. They feel as if they're doing you a favor by sending you that Dropbox. Not only are they getting some extra storage, but you are too, so they feel good about it. It overcomes that hesitation.

In fact, I've seen an even better version of that strategy very recently. You may remember that I wrote a blog post called “The Almost Ultimate Guide to Follow Up.” In that blog post, I recommended the CRM system Contactually. It's the CRM system I use, and the reason I like it so much is, first, it's simple. Second, it's focused on follow-up, which the other CRM systems aren't. It actually monitors your communications with your contacts, and if you've said you'd like to keep in touch with a contact on a regular basis, it notices if you haven't and send you a proactive reminder to get back in touch. Really great strategy. Thirdly, it has a whole bunch of templates you can set up to make your follow-up much easier to do because of the predefined templates.

Now, what Contactually does is for their partners who signed up to refer Contactually and introduced people to the system, it lets them set up a library of predefined templates for those emails. In my case, for example, I just signed up very recently after I've used it and decided I wanted to become a partner because I really think it's a great system, and so I've uploaded to that library my 21-word email, the other emails in my Reignite system, and a whole bunch of my follow-up emails. If someone signs up for Contactually through my referral link, and there's an example below, they obviously become a Contactually member, but they automatically get a library with all my best follow-up emails in them.

That means that not only do I get an incentive for referring people, I think it's something like a 20% commission, but more importantly, I feel good about the referral because I know that the people who use my link will get my very best follow-up emails that they couldn't get from Contactually themselves and they couldn't get from anyone else, so I feel good about it. Now, you can use the exact same strategy. You don't have to have a piece of software to do it. If you're a service provider, for example, but you've got a free report, a lead magnet type thing, you do high-value briefing, you share a benchmarking study, anything piece of useful valuable information you have, for example, you can use that to get a referral.

Instead of contacting a common contact and saying, “Hey, I noticed on LinkedIn you're connected to Jim Smith. Could you introduce us?” which to the common contact feels a bit like he's going to set up Jim for a sales meeting, you can say, “Hey, I noticed on LinkedIn you're connected to Jim Smith. We've recently created a benchmarking report that covers the 7 top factors that pharmaceutical companies need to get a grasp of to improve their profitability in the 21st century,” whatever it might be. “If you were me, how would you go about getting a copy to Jim?”

Now, to the person you've asked for the referral, the introduction then, it now feels like they're doing Jim a favour because Jim will get a copy of your great report, or your benchmarking study, or a presentation from you, or a really valuable information. Whatever you choose to use as your referral gift will make your common contact feel good about referring you, and that's really the key. Instead of now feeling hesitant and as if they're setting that person up for a sales meeting with you, they feel as if they're doing them a favor by introducing them to you, and so they are much more likely to do it.

Have a think about what you could use as a referral gift to get the people referring you to offer to the people you'd like to be introduced to that will be valuable to them, that would involve them interacting with you. Ideally, in a meeting where you review it, or you could send them a copy of it, and then follow up afterwards, et cetera, et cetera, but make sure you got something great that you can allow people to give on your behalf that will make them feel really comfortable doing that referral. It will really increase the number of referrals that you get.

See you next week.

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