Experienced professionals can become so entrenched within their specific industry that they lose the ability to effectively describe their services to the general population. Your referral marketing success is contingent on your prospects not industry insiders and competitors.
2. Lose the Jargon
Save the the acronyms and jargon for industry newsletters and colleagues, convoluting your message with superfluous detail and terminology may make you appear intelligent in an abstract way, but it will not land you the sale. You’d be surprised how quickly people will be put-off if you make understanding your services a big challenge.
3. How’s your pitch?
Seriously, you need a pitch. You may not be selling investors on the reinvention of the wheel but even an informal pitch is an incredible asset. Word of mouth won’t be very effective if half the people you count on advocating for you, can’t accurately relay the value of your services.
4. The worst type of referrals are the ones that never happen
Even something as straightforward as landscaping is subject to interpretation:
My fictitious pitch: “Referral Key Landscaping provides outstanding commercial landscaping services, specializing in tree removal, landscaping masonry, snow removal, and all aspects of planting and landscaping design.”
Good: Later on today your brother tells you he needs to redo his patio and might need a mason. Armed with the right knowledge you would say, “You should consider a landscaping mason. I know this great guy Chris at Referral Key Landscaping, he has commercial contracts with some very scrupulous clients but I bet he’d be willing to take a look at your patio and give a reasonable quote. I’ll tell him to give you a call”
Now imagine I take the assumptive approach when you ask me what I do:
“I do landscaping, cmon’ you know, lawns and stuff”
Bad: Later on today your brother tells you he needs to redo his patio and might need a mason. You don’t know any masons so you never refer your brother, I never get a sale, and your brother misses out on quality services.
5. Practice
If an attorney can effectively explain their legal services to a young child, they are golden. If a programmer can give their elderly aunt an idea of the opportunities and limitations of a complex programming language; they’re not only a good programmer but a talented business person as well. It’s easy to do a lot of back slapping and ego boosting over lunch with an industry insider. Seek out people who don’t have anything to do with your industry and see if they can absorb what you say and then accurately relay it.
The Test
Referral Key members generally fall into one of about 150 service industries. This is by no means a complete list but it will give you an idea of the diversity of small business professionals out there. Take a look. If you are unsure what just one of these service providers actually does, there’s a chance someone is looking at this list right now and may be unsure what you do.
Referrals are a vital source of sales for most small businesses. What separates the mediocre from the truly profitable referral marketers? Many pros are left scratching their head, wondering why some professionals seem to always have a mountain of new business while others sit around waiting for the phone to ring, you need to consider the referral marketing basics; the difference between mediocre and highly profitable referral marketing.
1. What is the quality of your business network?
Highly Profitable Referral Marketing: My business network is made up of top-notch service professionals I trust and whose quality of work I am familiar with. They refer people to me because they know I’m the best at what I do. We periodically reconvene to ensure we are both on target and continue to work toward our sales goals.
Mediocre Referral Marketing: My business network is an undefined cluster of people whom I have loose relationships with. I don’t personally know most of these people so it would be a bit uncomfortable to call them and talk referral marketing. I send out an email blast once in a while and hope for the best.
2. Do you regularly send referrals?
Highly Profitable Referral Marketing: I view referral marketing as a serious business activity and approach it with the same gravity as I would taxes, employees, and accounting. Everyday I am looking for more opportunities to refer people to other professionals I trust. Referral marketing allows me to leverage my most powerful asset; my reputation.
Mediocre Referral Marketing: I view referral marketing as a business-esque social activity. I expect people to send me business before I refer anyone to them. I sent one referral last month, unless an opportunity falls into my lap, I don’t bother.
Highly Profitable Referral Marketing: The people I refer are integral to maintaining my reputation amongst my associates. My long-term referral marketing success is contingent on my ability to create referral situations that are positive for both parties. It’s just as important that I refer quality prospects as it is that I am referring those prospects to quality professionals. I always follow up with both parties to ensure the referral was a success.
Mediocre Referral Marketing: I may refer someone but after that, it’s sort of out of my hands. My business associates should just be happy that I’m even sending people their way. If there is a problem they’ll let me know.
4. Are you organizing and tracking your referral relationships?
Highly Profitable Referral Marketing: I closely mange my referral marketing activities. To be successful I need to be able to answer fundamental questions. I want to know who’s in my network, which referrals are they sending to me and which am I sending to them? Are they following up on my referrals? Of the referrals I send and receive, which result in sales? Do my business networking partners feel the same way about our business relationship or are we totally out of sync? Which relationships need more attention? Are there opportunities to expand my network?
Mediocre Referral Marketing: I hand out business cards and wait for the phone to ring. I’m not exactly sure where my new business is coming from and I couldn’t really tell you how people in my network feel about the referrals I send them. I figure if there are any problems they can call me.
The small business environment is extremely competitive. When professionals decide to go into business for themselves they are figuratively saying, “I can provide a great service, one that exceeds the current offering.”
This D.I.Y. (do-it-yourself) attitude created some very talented service professionals along with some fierce competition.
Attracting qualified sales leads involves more than just you and your prospect… there’s also your competitors. Identifying the competitive advantage in your marketing strategy is the key tosmall business lead generation. You must ask yourself:
“What barrier-to-entry does my marketing strategy have?”
In the entrepreneurial world, a new idea is often valued based on a competitor’s ability to duplicate that idea. Small business marketing follows the same fundamental principle; especially when marketing online.
For example, any small business owner can post ads on Craigslist. This neutralizes some of the advantage of marketing through Craigslist.
Television advertising is a good example of exclusivity in marketing strategies. On TV, money and scarcity are the barriers; every television program presents a different level in the barrier. Would Nike advertise during the Super Bowl if anyone else could as well?
Every marketing strategy is different so you’ll need to ask yourself this simple question: “How easy is it for my competitors to duplicate this marketing strategy?” If there is no barrier-to-entry then you may want to reconsider.
The biggest barrier-to-entry of a marketing strategy
Your referral network is unique and it’s yours. Competitors may have access to the same advertising opportunities, web postings and may even have their own referral network; but they can’t quite duplicate the dynamics of your referral system.
The advantage of exchanging referrals with a diverse group of professionals you know and trust cannot be leveraged by anyone but you!
It can be a pleasant surprise to receive a referral from an unexpected source. Every now and again being referred a client beyond the reach of your immediate circle of trust can give your sales a little boost. When we receive a new sales lead from an unexpected source we can easily become distracted by the opportunity at hand and forget to take a moment to think about the new source rather than just the impending sale.
Wouldn’t it be nice if you knew where these new sales leads were coming from? What if you could influence the amount of new sales leads that come your way outside of your primary referral groups?
Here’s how…
1. Join a club that has always interested you. Often we get stuck in the same routine and end up at the same business networking clubs with the same old people. From a knitting circle to a racket ball club, you are bound to meet new people who you may be able to share referrals with; you don’t have to necessarily meet under the auspices of “business networking”.
2. Family and friends are often overlooked as referral sources. While you probably don’t end personal conversations with a business card you may not want to miss out on your buddy’s next BBQ.
3. The best referral networkers know how to turn every day situations into mutually beneficial networking opportunities. That guy in front of you at the bank, your dry cleaner, and your fellow commuters are just the tip of the iceberg when it comes everyday networking opportunities. Even an elevator ride is worth a preliminary networking effort.
One of the biggest mistakes a networker can make is overlooking a seemingly irrelevant networking partner. The ability to send and receive indirect referrals is often the same margin that separates mediocre networkers from the pros.
Where do you receive most of your indirect referrals from?
As intimidating as investment bankers may seem, they can be a key resource in your referral network. Although you may not see it now, investment bankers are good people to know especially, if you decide to sell your company. Here is just one example…
Network Wisely
Terra Kinder of First Choice Business Brokers in South Carolina is a business broker who happens to get many of her referrals from small investment banks. Just walking through the doors of an investment bank can create unexpected opportunities for mutually beneficial referral relationships. Your investment banker knows brokers like Terra Kinder and when it comes time to sell, she is the kind of player you want on your team. By working together, Terra and the banker help generate quality sales leads for each other while at the same time helping you, the small business owner, achieve your goals.
Building the Right Referral Relationships
Networking with a professional at a boutique investment bank, who often works with other small business, can be a hub of referral activity.
Building referral relationships with a banker early on, can lead to a better deal with a broker when you need their services.
1. Make a new friend
Whether it’s the security guard you say hi to in the morning, your morning coffee barista, or a fellow passenger on the train; most of us come in contact with new people everyday. Each one of these people has a unique story to tell and with a few open-ended questions; a 5 minute conversation can turn acquaintances and strangers into friends.
2. Probe
A truly perceptive person can pick up on a stranger’s needs in a matter of minutes. LISTEN, LISTEN,LISTEN. There’s nothing wrong with proactively looking for links of interest and finding solutions to help your new friend. In other words, if your friend at the sandwich shop is looking to purchase health insurance and you can point him in the right direction, it’d be wrong not to.
3. Send the Referral
Refer your new friend to someone who you know will not only do an outstanding job but, reciprocate by sending you qualified sales leads. Even better, send your friend’s contact information directly to your trusted associate so he can act on the referral in a timely manner.
4. Follow Up
Follow up with both parties to ensure the success of your referral. A good referral should have everyone feeling like they got a good deal… and some new friends.
5. Email This Blog to Your Friend
Now it’s time for your referral partner to return volley and if they need a little nudge… send them to this blog!
The recent rise of “pay to list your business” websites, hasn’t necessarily improved the quality of service for many consumers. The problem with many of these sites is that contractors and other service professionals are either given a listing or priority, based on their willingness to pay a fee, rather than their reputation. I’ve recently heard Craigslist mislabeled a “referral source” by a number of small business professionals. Anyone who’s experienced the long-term value of building a strong client base as well as a circle of trusted associates that send you referrals, will tell you that a response to a Craigslist ad is completely different than lead generation through a network of people who know and trust you.
“Many Web sites provide referrals for contractors, and Web users may assume those companies check out those contractors before listing them. Five on Your Side has found that is not necessarily the case.” Monica Laliberte Wral.com
I don’t mean to single out Craigslist either, in fact there are dozens of sites that do not qualify their contractors and service professionals. At Referral Key we take a democratic approach to ensure the right professionals are matched with the right customers. We allow any business to list in the small business directory for free. Furthermore, we allow both members of the professional’s network and past clients, to rate the quality of the professional. All of this information is visible to the public for absolutely no fee.
The dilemma with “pay to list” directories is that there is no accountability for either the client or the service provider. Your priority should be to get quality referrals before you get more referrals.
What is your experience with referral quality from online classified sites?
You’ve staked out a fertile plot, planted the proverbial seeds and now you’re waiting to take in the sun. In other words, you’ve found a niche, developed a few strategic relationships, and you’re ready to drive revenue to your small business.
It can be hard to take in the sun during the winter just as it can be hard to drive revenue in a recession.
What can the trees teach us?
The Deciduous Approach
Deciduous trees are trees that go dormant during the winter months. (Maple, Oak, Birch). The deciduous approach to a cold season is to shed their leaves to prevent damage and conserve energy.
You can think of the deciduous approach to survival as an outbound advertising strategy. When times are good, the leaves put on a bright display and the money flows. But when winter arrives the tree goes dormant and so does the business.
The Coniferous Approach
Conifers are cone bearing trees dubbed “evergreens” because of their ability to stay green year round. (Spruce, Pine, Redwood). The coniferous approach to a cold season has been to develop resilient leaves(needles) that retain moisture and are able to stay on the tree for as many as 40 years.
From scorching heat to sub-zero temperatures, conifers survive in almost any environment because of their long term relationships with their needles. Coniferous businesses will survive any economic climate because of their long term referral relationships with their business associates and clients.
Dave O’brien has been an accountant for over 40 years. In that time, he’s worked with many top firms including KPMG Peat Marwick (Now KPMG) in Boston and Isner & Lubner in New York City. Currently, Dave specializes in taxes. Given his expertise, as well as a very important tax season, he finds no shortage of freelance work.
Throughout your forty year career as an accountant, what strategy has helped you generate new business?
Word of mouth… all referral based. The accounting business was strictly referral business.
Where did you meet your connections and referral partners?
I tried several networking groups over the years. At one point, we even started our own meet up group. We had an insurance guy, an attorney and so forth. It was a great idea but eventually the group broke down due to our busy schedules. It was very difficult to get everyone at the meetings.
I wish I had a tool like Referral Key thirty years ago.
How have you helped build your reputation over the years?
Its about recognizing your strengths and referring clients to the right people whenever possible. I worked with a lot of new businesses and clients looking to incorporate. I would send them to the right people because I knew that my reputation and the possibility for a long term relationship, were contingent on my associate’s ability to provide the clients I was referring to them, with the best possible service.
I would refer them to lawyers that could best serve the clients and their needs, not the lawyer. When I first started, there were a lot of lawyers that would help you incorporate but only authorize a limited amount of shares in small increments. This would allow them to accrue more fees over time because inevitably, the business owner would be interested in acquiring more shares.
I would also send the same clients to banks that were receptive to their needs, not a bank that would be unresponsive when the client needed a new loan a few months down line.
Can you think of any bad referrals that stand out?
Ha ha ha… yes, the client didn’t pay.
What is the most important advice you could give an accountant who’s just starting out?
Get out there and build strong relationships. That’s the key. Also, to avoid situation where client’s don’t pay you for your services, you should check with their previous accountant to ensure you’re dealing with the right people.
It’s simply not enough to say “I want referrals”; great, so do millions of other small business professionals. As with most things, successful lead generation requires a little bit of planning and tact.
Below I’ve outlined a simple strategy using my own fictitious network.
For this example I’m a marketing consultant (Because I am). I exchange referrals with many small business owners but here is just a small sample of some key players I’d like to add to my network this week.
Harold H.
Industry: Law
Connection: Harold works in the same office building as me. We’ve known each other for years but haven’t formalized a referral relationship… it’s long overdue.
Challenge: Harold is an older professional, very pragmatic and set in his ways. He’s a snail mail kind of guy and never really viewed his professional relationships as a source of new business. He spends a lot of money on outbound marketing and is a bit frustrated with his ROI as of late. Never the less, he’s a talented attorney and the sheer quality of his work alone makes him a candidate for my referral network.
Strategy: Between our brief conversations in the lobby over the years and the fact that an entrepreneur friend of mine was pleased with his work; I’m comfortable with sending Harold a few qualified leads and I know that he works with quite a few small business that could use my services too. I set a date to do lunch and follow through. At lunch, I explain to Harold that I am eager to send him new clients if he’d keep me in mind when he comes across clients who may need my marketing services. I tell him to expect a formal email invitation to join my referral network. It doesn’t end there; after lunch I immediately send Harold an invite and proactively seek to secure him a referral as soon as possible. Setting the rhythm early on will keep expectations high and revenue flowing.
Denise R.
Industry: Graphic Design
Connection: A past client of mine had a website done. During one of our appointments they shared their website and I was really impressed; she is talented.
Challenge: While talented, Denise is young and I don’t want her to confuse referral networking with loose social networking. If I am going to be sending her qualified sales leads I don’t just want a smiley face on my Facebook profile in return.
Strategy: Denise designs websites for businesses obviously looking to increase their presence. I help market those websites. This could become a very profitable relationship and one that’d be foolish to overlook. I call up Denise and explain our connection. I probe her to figure out what she already knows about referral networking and of course I fill in the gaps. I ask to see some more samples of her work to determine if the quality of her services are on par. I follow up with Denise and explain my intentions and why we should be taking advantage of our unique situation. I make my expectations very clear. If she’s up to it, I invite her to join my referral network and hopefully I can send her a lead within the following few days. I want to set a good example so I make an extra effort to not only send her quality leads but to take good care of any client she sends my way. With a little bit of diligence, this could easily blossom into a very profitable long term relationship for both of us.
James L.
Industry: Accounting
Connection: Jim is a friend of a friend. Jim is also a slick talking networker, about as good of a salesman as he is an accountant.
Challenge: Jim talks the talk and while many people can testify to the quality of his work, I don’t want to get lost in the shuffle. I’ve got an accountant named Dave who also does good work and I want to let Jim know that the leads I send him are very valuable and I expect the relationship to be a two-way street.
Strategy: Because of his reputation for top-notch services and his powerful connections, Jim could be a very critical player to have in my referral network. I’ll want to have a one on one conversation with Jim and tell him that I am serious about exchanging referrals. I will also want to remind Jim that I will be tracking our referral relationship through Referral Key and phrase it in such a way that I want to ensure I send him an equitable amount new business. It will be very important that I utilize referral tracking reports to keep this relationship balanced and profitable for both Jim and I.
Select a Cash Bounty Amount
Consider setting up a Cash Bounty that you'd be willing to pay to people who send you new business. It's free to setup and you control whether to issue the cash.
You have an expertise…
It can be a pleasant surprise to receive a referral from an unexpected source. Every now and again being referred a client beyond the reach of your immediate circle of trust can give your sales a little boost. When we receive a new sales lead from an unexpected source we can easily become distracted by the opportunity at hand and forget to take a moment to think about the new source rather than just the impending sale.
You’ve staked out a fertile plot, planted the proverbial seeds and now you’re waiting to take in the sun. In other words, you’ve found a niche, developed a few strategic relationships, and you’re ready to drive revenue to your small business.
