Building a Referral Machine For Your Company

by Andrew Wood

Referrals are the life-blood of any successful business or service, but they work much more predictably and effectively when you develop and follow a system so that good leads don't just slip away.

Ask any good business owner how she generates most of her business and she will cite referrals, but ask her to explain her referral system to you and you are very likely to hear that referrals just happen. So does death, but it doesn't mean you should wait around for it!

Contrary to what many believe, most people actually like to give referrals, for three reasons:

  1. Ego. When someone buys something new he wants his friends and neighbors to be impressed. He wants them to know what a great deal he got.

  2. Most people like to feel important, the center of attention or the source of information.

  3. People like their friends and neighbors to share and experience the same things they do.

Yet many people are hesitant to ask for a referral, not wanting to seem pushy or desperate. But you can make the process painless by carefully framing your request. For example, "Who else at work would you like to share this opportunity with before the prices go up?" Or, "Can I help anyone else in your organization save time by employing this service?" Or, "Who else can I help become a more productive part of your team?"

The very best time to ask for a referral is right after you have completed a sale. This is the time when excitement and anticipation are always at the highest level.

To double your referrals simply ask for them. Not sometimes, not when you feel like it, not when you are having a good day, not only if you feel the prospect likes you. Ask every single time in as many different ways as you can.

Seven key referral groups

  1. Ask new clients to buy again. Can we sell anything else to the new client in front of us right now? A new printer to go with the computer, or lessons to go with the new golf clubs they just bought?

  2. Ask new clients who else might benefit. It's almost certain that they know someone who has similar needs. Everyone is an opinion leader to some group.

  3. Ask non-customers for a referral. Even when a sales presentation has not been successful, there is no reason why you should not ask for a referral. But don't ask if they know of anyone else, for that almost always brings an instant no. Ask who else they know, suggesting that there must be someone, a subtle difference that makes a huge difference in the elicited response.

  4. Ask former customers. Just because a customer is an ex-customer doesn't mean they won't refer you business. Make it a point to stay in contact with ex-clients.

  5. Ask business suppliers for referrals. Since you buy goods and services from others, you are a good customer to someone. That someone should be glad to give you referrals.

  6. Demand more referrals! As a speaker, I actually demand referrals from my clients by including a clause in my speaking contract that includes, as partial payment, the guarantee of two referrals for a job well done.

  7. Get referrals from your competitors. Competitors can often be a good source of referrals. Sometimes you get a job that you don't want. It's too small or you and the prospect simply don't hit it off! In these cases, instead of letting the prospect bounce around to three or four more people, refer them to someone who can help them at once. In return they will refer people to you!

When someone gives you a referral that results in a sale, at the very least, you should send him a "thank you" note, and make it easy for him to repeat the cycle by enclosing a reply card or fax reply form.

And, for others you know who may need sales or marketing help, please refer them to me!


Andrew Wood, is recognized worldwide as a business, marketing, leadership, and personal development expert. He is the author of The Millionaires Library, which delivers you the essence of knowledge from over 1000 business, sales, marketing, leadership, and personal development books in a single powerful set.

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