By Adrienne Zoble

We thank for referrals by doing business with them.

I can’t count how many times I’ve gotten this response to my question, “How are you thanking them for their referrals?”

It seems I can’t explain Referrals 101 often enough.  Referrals are so important to the growth and success of your business, profession or non-profit.  Yet they’re too often taken for granted; so here are some guidelines that will ensure additional referrals from the same sources, turning those sources into advocates for you and your business.  The word will also spread, bringing new sources into your fold.

You might ask, “How important is important, as far as referrals are concerned?”  Simple.  When you approach someone through a referral, you have a 75% better chance of closure.  Price is a virtual non-issue, since you’ve been presold.  The sales cycle is significantly shorter.  Are those reasons important enough?

First of all, it’s imperative that you acknowledge a referral.  You’ve heard me say or write over and over again that marketing isn’t logical; marketing is emotional, and referrals are one of the more emotional issues.
Here’s the most common scenario:  you’ve actually contacted the referral, but to no avail: the person is away on business for the next week or ten days.  “Well,” you say to yourself in your most logical voice, “I have nothing to report.  Once I’ve made contact, I’ll get back to the referrer and communicate the result.”

In the meantime – and I’ve polled audiences hundreds of times about this and they all say the same thing – your referrer is wondering, “Did he call?  Does he care?  Last time I’ll refer him!”

So, second, it’s incumbent upon you to contact the referrer within 48 – 72 hours, even if nothing is happening!  The call/voice or email might go like this, “Just want you to know that I’ve contacted so-and-so, and she’s away on business.  Thank you so much for thinking of us.  Once I make contact, I’ll keep you apprised of what’s happening.”

There.  Three piddling sentences that allow the referrer both to know you’ve taken action and to feel in the loop.  Is that so difficult?  No?  Then what prevents so many business owners from taking this 30-second step?

What happens next?  Well, after some communication, you didn’t close.  It’s time to call your referrer (not email; that’s too impersonal, when this person put her credibility on the line for you).  “Just wanted you to know we didn’t get the account, but I sure thank you for thinking of us and hope you’ll continue to do so.”  My personal favorite line is, “You’ve got to kiss a lot of frogs to find a prince.”

If this is the latest in a series of referrals from the same person, and none of them have worked out, invite that individual to breakfast or coffee.  Subtly educate him or her on the type of business you’re seeking, and the signs to look and listen for that would constitute a good lead.  Discuss “fit.”  By the same token, explain the leads that don’t work for you.  Be very careful, however, not to state that the leads this person has been offering are too small.  You’ll come across as arrogant and destroy this referral source.

Now, let’s say you got the account.  A phone call is fine.  Leaving a message and never calling back to make voice-to-voice contact is not.  A handwritten thank-you note with three sentences similar to those indicated above is even better.  After all, don’t you remember those who took the time to send you a handwritten, snail mail note?  Of course you do.  How much time does this take?  Can you spare five minutes?

If the referrer becomes an advocate, you might wish to consider graduated thank-you’s.  What this means is that you send a gift that gets better and better.  A first might be a $10.00 gift card to a local coffee house or movie theater.  My only exception to the local rule is Barnes & Noble.  These stores do so much for their respective communities, and there’s a wealth of ways to spend their gift cards.

By the third referral, you might work up to a $50.00 dinner for two.  I encourage clients to schedule Client Appreciation Dinners for no more than five couples, plus them and spouse or significant other.  No commercials.  Talk about sports, travels, whatever else to cement relationships.  Just sit back and watch additional referrals come in.  The dinners more than pay for themselves.

Let’s go back to the importance of referrals.  What about the marketing costs of taking disciplined action for referrals?  In real dollars, your Referral Program is costing you 15% of what it costs to market U to U (Unknown to Unknown).  That’s a savings of 85%!

By the way, here’s a no-no for your Referral Program:  “If you refer us, we’ll write you a $100.00 check.”  That’s a bribe, and recipients of this offer know better than to bite.  Or the leads are awful.  Or two people each claim the $100.00.  Huh-uh.

Tacky.

The surprise thank-you is far more effective.  “You didn’t have to do that!”  Your response?  “Well, you didn’t have to put your credibility on the line and refer us.  It’s the least we can do.”

Suggestion?  Include a goal for increasing your percentage of business by referral in your Marketing Plan.  And the reason is?  It’s crystal-clear: for marketing efficiency, doing business by referral is at the top of the list.