How to Generate More Referrals For Your Business

Whether you’re just starting out or you’ve been in business for years, referrals are one of the easiest ways to grow your business.

Not only are referral clients more qualified than other clients, but they inherently trust you more than if they found you on their own.

But even with all of these benefits, referrals still have one big problem: referrals are unpredictable.

Where Referrals Come From

While most of us think we understand where referrals come from, as we’ll see the social dynamics behind referrals always as intuitive as they seem.

To illustrate let’s use an example.

Will You Be Recommended?

Let’s say that you’re a talented web designer and a friend of a friend runs a law firm.

Now let’s say say your friend and her friend (the lawyer) are catching up over drinks when the lawyer asks the all important question: “Do you know anyone that builds websites?”

The likelihood of your friend recommending you to her friend depends on a lot of factors, but this post focuses on the 4 key elements:

  1. How well your friend understands what you do.
  2. How well your friend understands who you serve.
  3. How well your friend understands the type of results you get.
  4. How well your friend can explain all of the above.

Now if you want to generate more referrals, it is YOUR responsibility to empower your friends and other contacts about all 4 of these elements.

If you nail these 4 then your business is recommendable… if you don’t then you’re missing out on valuable referrals.

(How recommendable you are also is highly dependent on how all of the factors above are primed in his or her memory… but persuasive storytelling is the topic of another post.)

Becoming Recommendable

Rethinking Your “Network”

While the example of a friend referring you a client does happen… the majority of your referrals probably come from some place else.

Let me explain.

When you think about who is “in your network” the first people you probably consider are your close friends and family.

While these people are your strongest and most important relationships, they probably have the smallest impact on referring customers to your business.

Instead the real power of your network is in the people at the fringe of your network.

In social sciences these people are known as weak ties or more recently consequential strangers.[1][2][3]

Consequential Strangers

Loosely defined consequential strangers are people who you have contact with that AREN’T your friends or family.

They sit at the border between the people you know well and the people you don’t know. (see image below)

In some case you may know quite a bit about them, but the key part is that you don’t have many of the same friends.

You might have met them at the gym, volunteering, on a business trip, or at a conference, but the key point is that they are outside your close friend network.

These consequential strangers are the cornerstone to amplifying the number of referrals you generate because they have a much more diverse network of people they can tell about your business.

The only problem is, they can’t recommend you if you don’t empower them with the right information and story.

known-vs-unknown

3 Steps to Empowering Consequential Strangers

My thinking on consequential strangers has gotten a little more concrete since I shot the video above. That said, I believe there are really 3 steps to empowering consequential strangers to make referrals on your behalf.

Step #1: Be Specific on Who You Serve and Who You Don’t

The most important step is being specific with who you serve and who you don’t serve.

Just because you can work with many types of clients, doesn’t mean you should… and smart business professionals like to recommend people when they know it’s a win for both parties, so being clear with who you do serve is vital.

<toughlove> Understanding who your ideal customer is and isn’t is at the core of your businesses. To be honest, this is the #1 entrepreneurial homework that most people ignore. If you don’t know who your ideal customer is then my guess is that referrals aren’t your only struggle. Sit down and figure out who is your customer and who isn’t. </toughlove>

Step #2: Frame the Context

Once you’ve communicated who you serve, context is all about communicating makes you different from other providers.

Context is easy to overlook when you’re working on your own marketing because you’re so close to it.

For example, back when we did the data collection for the perfect contact page, we visited over 1,800 websites of consultants and freelancers.

While the purpose of the data collection was to look at the contact forms, we were astonished at how many companies claimed to be different but spent no time explaining it.

The problem with not explaining how you’re different is that in the whirl of thousands of sites or conversations, a business that doesn’t differentiate itself blend into the crowd.

Step #3: Build Credibility

Once you’ve established context, the last step is to build credibility.

Credibility is all about who you are and why you are qualified to do what you do.

In person the easiest way to establishing credibility is to use concrete examples of your work with past clients.

Now generally, I recommend people use the script below and then to have a planned case study you can talk about if the person seems interested in what you do.

A Simple Script to Become More Recommendable

One of the most effective tools to becoming more recommendable is a script I developed years ago to help people effectively answer the “So What Do You Do” question.

(If you use this script make sure you drop it in the comments below because I often personally respond and help people tweak their scripts.)

I (what you do) for (who you serve) so that they can (master, overcome, defeat) their (struggling point) to gain (a huge benefit).

I love this script is because it forces you to establishes who your customer is and context around what you do.

Then if the person is interested you can further build credibility by talking about your past client work or experience.

The Secret to Getting Better Referrals

One important element to remember is that the quality of the referrals you’re getting are directly related to the types of people who are at the edge of your network.

In my eyes, there is no better way to expand your network and increase the number of referrals you get then to go to a conference for the industry you serve not the industry you work in.

This is one of the strategies I used while building my email marketing firm.

Since I was clear that my best clients were luxury realtors, I didn’t waste my time going to email marketing conferences looking for clients, instead I talked my way into the luxury real estate conferences. The first time I was an attendee and the later I was a presenter.

This gave me a huge edge over my competition as once I had a few luxury realtors who weren’t already in my network, I just had to impress them and use this system to enable them to send referrals my way.

Building a System for Referrals

Now if you really want to take your referral generating game to the next level, then you’ll definitely want to check out a small guide I wrote called the Referral Engine.

In the guide, I outline the simple process I used to increase my referrals 300%.

People have been getting insanely good results with it and I hope that you will to.

You can download the guide here: http://www.nicholasreese.com/downloads/referral-engine/

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Always on your team,

ps. Do you have a strategy or technique to generate more referrals? If so, I’d love to hear about it in the comments.

References and Footnotes

  1. Blau, Melinda; Fingerman, Karen L. (2009).Consequential Strangers: The Power of People Who Don't Seem to Matter...But Really Do. New York: W. W. Norton.
  2. In my opinion, this Wikipedia page on consequential strangers is all you need to understand the concept. The book is a bit repetitive.
  3. Granovetter, M. S. (1973). "The Strength of Weak Ties". The American Journal of Sociology 78 (6): 1360–1380.