The Give and Take of Business: 3 Lessons on the Reciprocity of Referrals
Want to grow your business in a tough economy? Use the power of reciprocity when asking for referrals from existing customers to grow your sales. Reciprocity is defined as a "mutual exchange" - the give and take of life. In a slow economy it can be your lifeline. Often, referrals can be one-sided which minimizes the benefits to everyone involved. Instead, when we focus on what we give as well as get, we are more successful.
Here are three lessons I've learned on the give, take and give of referrals:
Lesson 1. Give great value and your best referral sources will be loyal customers.
Who are your loyal customers? These are customers who will sing your praises given the opportunity. They know you provide great value to them and trust you. They stick by you in hard times because they know you will do the right thing for them.
To make the most of these relationships, GIVE your loyal customers the opportunity to share referrals. This looks/sounds very different depending on who you are asking.
For example: I did great work for a loyal customer and she valued our results and relationship. But this never led to referrals. In considering this person's needs, I realized that she might be concerned that by giving me a referral I would be less available to her.
To help ease this concern, I approached it differently. First, I assured her how important our relationship was to me. Second, I identified that I had positioned my company for more growth through additional consultants and was looking to secure work for those consultants. And finally, I asked who she might know who would benefit from the work we do in strengthening customer loyalties.
She had two names for me within a week!
Lesson 2. Help them help you!
This is the 'take' part of the referral process. Answering these two questions will help make TAKING referrals easy:
1. What type of person/company makes a good referral for you? Help your contact identify opportunities that will be good business for you. What companies are you best positioned to serve with your product/service?
2. What is the value you provide? Explain the value in a sentence or less so your referrer can articulate it for you.
When the economy slowed after 9/11, I contacted our loyal customers to review updates and talk about how we might serve them in the future. THEN I asked, "As we look to the future of our business, we are positioned to help more people like you. Who else is in a position such as yours that might benefit from increasing sales 5-25% this next year?"
Notice I didn't give them the, "Who can you introduce me to?" Or, "I'd like the names of everyone in your address book." I specified the value we could provide to make it easier for them to refer specific people/companies.
Over 80% of these loyal customers provided at least one referral, giving me the opportunity to build more loyal customers.
Lesson 3: Follow-up and reciprocate!
Closing the loop is extremely important in the give, take and give of referrals.
When someone provides you a referral, keep them updated on the status. A quick message telling them you have initiated contact or you have a meeting scheduled is always a welcome surprise and closes that loop. A side benefit is that they might help you even more. For example, I couldn't get in touch with a referral for months. When I followed up with the person who gave me the referral, he said, "Hang on, I'll conference us all together and get this done." Wow, in a minute's time I was on a call "meeting" with the referral and scheduling an appointment!
It's also very important to reciprocate generosity and give back value. The value can be a referral, a note, information or a heart felt THANK YOU.
Relationships have always been the foundation to long-term successful business. The value in relationships is even higher during a slow economy. Focusing on the give, take and give of referrals will show how you VALUE your most loyal relationships and give you opportunities to build new ones.