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 property & casualty [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 (COIs) they have, the typical answers range from three to six. That's just not enough to produce a meaningful, steady stream of referrals.
Sometimes, by the way, I'll have attendees who 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 COI 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.
Although those things are necessary, they don't define someone as one of your centers of influence: The mayor of your city and the governor of your state both see and know a lot of people, but for most of us they would not be considered as one of our centers of influence.
There are two other 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 noted earlier, most professionals have only three to six 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.
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 to help you if they don't feel a connection with you.
How can we turn these shortfalls around?
How can we put all the pieces together to generate an ongoing stream of referral?
Here are the 4 keys to referral success...
Key No. 1: Work with enough referral sources
You need to have around 12 "core" centers of influence and about 100 potential centers of influence. The core COIs are the ones you'll take to lunch regularly. The others are people you are working to develop a relationship with. Two good ways to increase your core centers of influence are to attend networking events and to ask your current core COIs for suggestions.
Key No. 2: have a referral "system"
This key to referral success focuses on the need to have regular contact with your COIs. This may be in the form of lunches, cards, emails, voicemails, or letters. It is only by regular contact that you will create a stream of referrals. (Feel free to contact me about automated solutions.)
Key No. 3: Differentiate yourself
Stop using a "vanilla" message. Work on developing a message that sets you apart from everyone else and gives people a reason to remember you. An excellent way to set yourself apart is to develop a niche.
Key No. 4: Create a relationship "bank account"
This is the key that almost everyone misses. To create a reliable stream of referrals, you need to make "deposits" into the relationship (emotional) bank account of each of your referral sources. You need to take the time to get to know them, find ways to add to the relationship, and create an impression with each of your sources. Although this takes some work up front, once the foundation is set it's easy to sustain.
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In summary, the four keys to referral success are to work with 12 or more centers of influence, implement a systematic way to stay in touch, differentiate yourself from everyone else, and build a connection with each center of influence.
If you take the time to get each step right, you will become one of the few professionals who grow their business strictly by referrals.
