When it comes to generating new leads, referrals are worth more to your business than any other form of marketing.
It has also been shown that people are four times more likely to buy when referred by a friend (Nielsen) which make referral leads easier to close because part of the sell has already been done for you.
But for the majority of businesses, gaining a steady flow of referrals is a challenge.
Referral Marketing Guru founder Michael Griffiths is a global expert in referral marketing, and travels the world teaching people how to generate more leads and gain more clients by implementing a referral marketing system into their business.
According to Michael, 95% of businesses are missing out on getting the referrals that they want because they don’t really know how to get them.
Here are the top 10 mistakes people make and how to turn those around to get referrals flowing fast into your business.
1. Expecting clients to provide all of your referrals
This is the ONLY referral strategy for many businesses.
While clients can and will generate some leads for you, Michael says your referral marketing efforts should focus on building your own ‘Referral Team’.
The first step in doing that is to IDENTIFY potential partners.
When identifying potential partners, Michael says to focus on people who already service the same clientele as you (but offer a different service).
“The best partnerships, guaranteed, will be with someone who is servicing your same market in some way,” says Michael.
Draw on a wide variety of sources to create your Referral Team, such as social media, networking groups, people you meet and introductions via your network.
To get started, Michael suggests a Referral Team of 66 people is manageable for most, with those people falling into one of 5 categories: Profitability Partners; Super Groups; Cross Promotions; Content Distribution; and Affiliates.
2. A limited mindset
We need to change the way we think when identifying potential partnerships by broadening our mindset around where we might find those people.
“Don’t just limit yourself to people who do business locally,” says Michael.
“Around the globe there are an abundance of people you could partner with.”
“Once you change your mindset on who is a potential partner, the opportunities open up 10-fold.”
Brainstorm in at least two rounds to identify potential partners beyond the obvious:
- Who services the same target market as you (but offers a different service)?
- Who sells to those people?
- Where else do those people spend money?
- What else are they interested in?
3. Partnering up with the wrong people
Everyone in your network should fulfil one of 3 purposes: be able to partner with you; buy from you; or open doors for you.
“The common mistake that you often get with your network is that you can’t engage with them because they’re the wrong people,” says Michael.
“If people in your network don’t have the ability to partner, buy from you, or open doors for you, then why are they in your network?”
TRUTH: if you’re not getting at least one referral from your Profitability Partners (these are your key referral partners) weekly, then you need to change them.
Your network and referral team will (and should) always be building and evolving, with new players coming and going over time.
4. Failing to build trust first
How often, when meeting someone new in business, do we introduce ourselves and then go straight into explaining what work we do?
This approach fails to develop trust, which is the key to determining whether someone will send business your way.
“Trust opens up your ears,” says Michael. “Deciding whether you will refer business to someone isn’t about what they do, it’s about how much you trust them. If you don’t know, like and trust them, you won’t put your credibility on the line for them.”
The goal when you introduce yourself to someone is to develop a trusted connection first.
Instead of asking, ‘So what do you do?’ instead start with ‘Did you travel far to get here today?’… ‘Are you local?’… ‘Were you expecting it to be so hot today?’
When reaching out to people online, build the conversation in steps over several messages to steer the conversation where you want it to go.
5. Not asking for fear of rejection
Once you’ve identified a list of potential partners, the next step is to reach out and ASK.
“What stops us most of the time from even asking is that fear of… what if they say no?” says Michael.
“The simple truth is that you’ll never know if you don’t ask. Instead, focus on: what if they say yes, and be ready to go with that.”
Before you reach out to a potential partner, have a clear plan on where you want that conversation to go.
Are you wanting to be introduced to someone? Do you need exposure for your upcoming event? Are you needing to collect data via a lead magnet to build your database?
Be sure to network with purpose.
6. Only contacting people when you want something
We all know ‘that person’ who only contacts us when they need something.
Don’t be that person.
“If you only contact people when you need something, they’re unlikely be excited about helping you,” says Michael.
“Your first approach when reaching out to a partner should always be, ‘How can I help you?'”
Michael teaches how to establish a ‘Personal Engagement Plan’ which ensures you nurture your network by creating regular engagement and conversation.
The plan involves reaching out to 25 people in a 30-minutes block (scheduled into your calendar a few times each week) via email, social media message, phone calls and cards.
The conversation in this case is a non-sales, no-strings approach that’s as simple as saying, ‘Hi, how are you? How’s business going?’
7. Falling off the radar
Once you have your network in place, you need to nurture it and keep your name at the forefront of people’s minds.
“It takes 45 days for your network to forget you exist,” says Michael.
“Your networks cannot create opportunities for you if they don’t remember you.”
Michael teaches a ‘Front of Mind’ strategy that ensures you keep popping up across your networks such that you’re the person they think of when referral opportunities come up.
The strategy involves scheduling 10 minutes a few times each week to:
- Engage with your network on social media by liking/commenting/sharing content;
- Invite people to your events (it doesn’t matter if they come or not, it’s the act of inviting that counts);
- Connect people in your network to one another;
- Announce/promote events and activities to your network.
8. Not being specific on how your partners can help you
If I asked you right now — what can I do to help you in your business today? Would you have one or more specific requests ready to go?
The more specific you can be about what it is you need, the easier it is for your referral partners to help you.
Michael suggests having a list of 20 or more things (updated weekly) that your referral partners can help you with at any one time.
For example, you might ask your Cross Promotion partners to share your blog on their social media platforms or you might ask someone in your Super Group for an introduction to someone in the accounting sector.
9. Not training your referral partners
A big part of your success is how well you ‘train’ your referral partners to deliver what you need from them.
“People who become referral partners and don’t train each other are probably leaving at least 75% of business on the table,” says Michael.
“That’s how important training is.”
In particular, your referral partners need to know what lines to listen out for in conversation and how to pass that referral on.
For example, you run an accountancy practice and your referral partner is at an event where someone says, ‘My cash flow is a mess. I really need some help to get that sorted.”
Provide your partners with a list of key services that you provide and how people might describe them in conversation.
Michael says the best way to train your referral partners is to create your own ‘training manual’ which defines what you expect from the relationship and how to deliver it.
10. No plan to grow referrals
“It astounds me that everyone in business wants more referrals yet only 3 per cent have a plan on how to make that happen,” says Michael.
Michael teaches 5 key activities you must do weekly to grow your referral network.
- Grow Network (10 minutes)
- Grow Teams (30 minutes)
- Personal Engagement Plan (30 minutes)
- Front of Mind plan (10 minutes)
- Social Conversation plan (10 minutes)
Schedule two of these activities into your work calendar each day for guaranteed growth.
Design up your weekly plan, print it out and have it displayed in your workspace.
Michael Griffiths was a recent presenter at The Business League, a Gold Coast-based networking group for business owners to connect, develop and grow their operations.
You can get more information on Michael Griffiths and his referral marketing system at www.referralmarketingguru.com.au.