Referral Truth or Delusion

I am currently working on a new book idea with two business associates, Mike Macedonio and Mike Garrison (we call them Mike2), of the Referral Institute. The thought came to us that many business people have a perception about word-of-mouth marketing that isn’t based on reality. It’s a delusion!

I’d like to share with you some of those “referral truth or delusions” in this article. See if you can tell the truth from the delusion!

Truth or Delusion? If you provide good customer service people will refer business to you.

This is a delusion. Many, many business people think that good customer service is the number one way to cultivate word-of-mouth marketing and referrals. It is not! It’s a good policy and one that is vital to the health of your business, but it’s not at the core of building a referral-based business.

People have come to expect good customer service. They demand it in today’s marketplace. When considering customer service in terms of referrals, it works much more effectively in reverse. People will go out of their way to share BAD customer service stories and send business away from you as a result before they will consciously refer you because of good customer service.

Poor customer service will have ten times the effect (for the negative) than good customer service will have on your word-of-mouth message.

Truth or Delusion? For maximum referral impact, cultivate relationships primarily with movers and shakers in the community.

This is also a delusion. Common perception is to look for influential individuals who will hopefully be able to provide large referrals for your business which will result in big sales.

I heard a very interesting story once that really brings this point home. I knew a local business owner with whom I was chatting about the impact all types of people can have on our referral business. He proceeded to tell me about a phone call he got from a man inquiring about his window covering business. It seems that this man’s elderly mother had one small window on a back door that needed a roll-up screen and he could find no other window coverings business who would be interested in coming out to her house to measure and quote her on such a small job.

My acquaintance continued this story by recounting how he willingly agreed to take care of the job much to her son’s relief. About two weeks later, a large, white stretch limo pulled up in front of his store. A very well-dressed man in a custom tailored suit and fine Italian leather dress shoes stepped out and came on into his store. It was this little old lady’s son! He had just purchased a 15,000 square foot house in Malibu and wanted my friend to handle all the window coverings on an unlimited budget!

This is a clear example of how a seemingly un-influential individual could have a great contact. The point is to stop networking like a big-game hunter and approach networking more like farming. Cultivate all types of relationships with the clear understanding and knowledge that this is how networking works! You never know who it is who knows just the right person to introduce to your business.

Truth or Delusion? People who like, care and respect you will refer business to you.

You guessed it, this is absolutely a delusion. When’s the last time you got a referral from Mom, Dad or your spouse? Yet you would certainly be right to expect a referral relationship from those closest to you, such as friends, family members and other close associates. Along with these relationships, we need to be speaking the same language of referrals.

Often, we don’t consider that we need to train these people with whom we have the closest relationships on how to refer business to us. It’s true! We need to educate them as well on how to listen for people that might need our product(s).

Truth or Delusion? The best way to ensure referral success is to treat your referral sources by the Golden Rule, treat others the way you would want to be treated.

Yes, again, this is a delusion. It very well may be a good way to achieve success in cultivating referrals; however, the best way is to treat your referral sources the way THEY want to be treated. The referral process is more emotional than it is factual. It is crucial that we find out what is important to the referral source that we are in relationship with.

Once we know what is important to these key people in our word-of-mouth marketing campaign, we can focus on meeting their needs so that they become motivated to meet our needs. It is an example of “you scratch my back, and I’ll scratch yours.”

Truth or Delusion? Referral marketing is the safest form of advertising.

Often basing your business’s success on referral marketing can be the riskiest form of advertising. It’s not a guaranteed thing. A lot can affect it, not least of which is your personal ability to forge relationships which over time will result in an increase in business. But the payoffs of referral marketing are immense!

It takes diligence, perserverance and consistency to develop a successful word-of-mouth based business. It also involves perhaps the largest risk of all: giving away a piece of your reputation every time you give a referral to someone. When you tell a valued customer that a friend of yours is going to take good care of their need, you must have confidence in that friend!

What happens if your friend lets your customer down? It comes back to haunt you. Your customer begins to lose faith in you and you just might lose that customer down the road. This is why it is so very important to develop strong relationships with those to whom you are referring and vice versa. Once those strong connections are forged, you can rest easy, knowing when you tell someone a business associate or networking partner is going to take good care of him or her, that will happen!

These are just a few of the Referral Truth or Delusions that we have been discussing in relation to the new book we are working on. We think that exploding some of the common myths about networking and word-of-mouth marketing can only result in more entrepreneurs understanding the true dynamics of this type of marketing. Just call us the “Referral Myth Busters”!

Called the father of modern networking, Dr. Ivan Misner is a New York Times bestselling author and Founder of BNI (www.bni.com), the world’s largest business networking organization. His latest book, Truth or Delusion can be viewed at www.TruthorDelusion.com. Dr. Misner is also the Sr. Partner for the Referral Institute, an international referral training company (www.referralinstitute.com). He can be reached at misner@bni.com .




Referral Truth or Delusion - To learn more about this author, visit Ivan R. Misner's Website.

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