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Why Do Referral Efforts Fail?

Written by: Michael Beck

Article Overview: I’ll assume that you are likable, have integrity, and know your stuff. Over my years of working as a professional and working with professionals, I’ve identified four CRITICAL keys to referral success. Most professionals fall short in one or more of these areas.

Why Do Referral Efforts Fail?

Don’t you get tired of hearing about how great referrals are? Especially if you’re not getting enough of them? I am always speaking to managers, agents and advisors who say they’re so tired of chasing “suspects” and would love real prospects – specifically prospects that come from referrals. I have one acquaintance (a P&C agent) who, every time he sees me, asks if I have any ideas on how he can get people to call him so he doesn’t have to actually FIND prospects! (Of course, there ARE ways to accomplish that, but he won’t put in the effort…)

We all know people, or at least know of people, whose business is sustained and grows by referrals. But most professionals can’t seem to get there. It’s worth taking the time to understand why most referral efforts don’t work and to understand what keys need to be in place in order to get the results you want. It’s worth taking the time because prospects who are referred to us are easier to close, make their buying decision faster, are more profitable (because there’s no cost in acquiring them and they spend/invest more with us), and they’re more loyal – they tend to stay with us longer and stay through most of the ups and downs.

Let’s start by looking at why most referral efforts fail. I’ll assume that you are likable, have integrity, and know your stuff. Over my years of working as a professional and working with professionals, I’ve identified four CRITICAL keys to referral success. Most professionals fall short in one or more of these areas.

The vast majority of referral-hungry professionals work with too few referrals sources or “centers of influence”. Whenever I do a workshop and ask attendees about how many centers of influence they have, the typical answers range from 3 to 6. That’s just not enough to produce a meaningful, steady stream of referrals. Sometimes, by the way, I’ll have an attendee claim they work with 50 or more centers of influence, but after further questioning, it becomes clear that they don’t know how to define
someone as their center of influence. Many people will describe a center of influence as someone who knows or sees a lot of people. Alternatively, some people will say that a center of influence needs to know or see a lot of people who may be good prospects.

The truth is that, although those things are necessary, they don’t define them as one of your centers of influence. You see, the mayor of your city and the governor of your state both see and know a lot of people, but for most of us, would not be considered as one of our centers of influence. There are two more important components we need to add to our definition of a center of influence. They must like us and they must be willing to help us succeed. To be considered a center of influence for you, a person must see or know a lot of people, must like you, and must be willing to help you succeed. So, as I said earlier, most professionals have only 3 -6 true centers of influence.

Another shortfall is that most professionals lack a systematic way of nurturing relationships with and asking for referrals from their centers of influence. They go about it in a very haphazard manner. That just won’t do. (I DO have an effective way of automating and systematizing this process, but you’ll have to contact me to learn about it.)

The third area of shortfall is a lack of differentiation – having a “vanilla” message. Most people are focused on getting through their day, so without having a point of differentiation, a center of influence just won’t think of us. The final shortfall I see over and over again is that we tend to have a pretty superficial level of interaction with most people. There’s no way to get people to like you and to want or help you if they don’t feel a connection with you.

Related Articles
  The 4 Keys to Referral Success
  When Good Referrals Turn Bad by Keith Rosen, MCC
  More on Referrals
  Getting Referrals
  Referrals in Marketing Work When Your Actions Have This One Key

Article Tags: acquaintance, attendee, attendees, centers of influence, critical keys, integrity, prospects, referral, referrals, steady stream, taking the time, typical answers, ups, ups and downs



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Re: 10 Reasons Who Startups Fail & Book Recommendations - Great post,but please edit the headline. I presume it is "10 Reasons Why Startups Fail & Book Recommendation
Re: Win Prizes - The Triple Crown Contest! - Hi GT - if you log into your author account you'll see Referral Program as one of the options on the left side. If you click on that you'll get the link that will tie people to your account.
Re: What inspires you? - Another inspiring thing is which I really likes "Most People Fail because, their dreams are small". Most people like to engage with something or teh other. If they can truly listen to their inner voice and work towards achieving it, then you can see "miracle in action". So, big changes happen, when you think BIG. If you cannot to think BIG, you cannot do BIG things too. Robert
Picking a corporate lawyer - Hi Everyone, I was just curious to know what's the most important criteria a small business owner should look at when choosing a corporate lawyer? -Cost/hr? -Location? -Reputation/Referral? -Experience? -Personality? How did you pick your lawyer? And what's a fair price to pay per hour? Thanks
Re: FREE Toronto Referral Workshop - Hi there, Indeed, I have never heard of a Referral Seminar. What a good idea. I guess being offered for free, there must have been a great deal of people attending. It is another way of saying: Do you want to increase your customers. Come along and we help and teach you. It has been said, that even in downturn of business confidence and consumer's caution, business will not come to a grinding halt. Please Andy, can you let us h ave these 14 ways of getting referrals. Thanks.


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