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The Art of Getting Referrals

  |  April 19, 2012   |  Comments

Why referrals are so important and what you can do to get them.

If business is a game played in Willy Wonka's Chocolate Factory, then referrals are the golden tickets. Most people know that referrals are positive but underestimate their true power, and in doing so, ignore many ways to generate referrals and expand their businesses.

Why Are Referrals So Important?

When hunting for new business, two primary obstacles stand in the way: access and credibility. Access is simply, "How can I reach my target audience? I know that Tom is exactly the person I'm looking for, but how do I connect with him? I don't have his email, phone number, address, etc." Credibility is, "Why should Tom listen to me? What separates me from everyone else calling Tom? He doesn't know me; he may not trust that I'm a good person with whom to work."

Referrals knock out both obstacles at once: access is immediately granted with the aid of the mediator; the middleman could either exchange emails or numbers or send an introductory email to both parties. With such access, you are brought directly to their attention and dodge the spam folder.

As you are connected, a line of credibility is established, either explicitly or implied, assuring the referred that you are someone worth working with. Better than meeting someone on your own, a referral rotates on the axis of the mediator, balancing on their reputation and rapport with both parties. In such a scenario, a strong mediator can support a deal of immense magnitude on her credibility alone.

When referred to/by someone, you no longer stand on your own two feet but carry the name of the middleman, which introduces the subtle danger in referrals. If business is about who you know, make sure to associate yourself with the right people. There is virtually no danger in having someone refer you, but be careful who you refer because they now represent you and your judgment. One bad referral and your credibility in the department could be shot.

How Can I Get Referrals?

Firstly, giving good referrals will get you referrals. Plain and simple. People are happy reciprocating and returning the favor, not only on an altruistic level but also because they know it will come back around. So start referring good people to those in your network to get the ball rolling. Referrals are a great way to break the ice and start up a new relationship you wish to establish.

Secondly, don't be bashful! Some people don't like asking for referrals, possibly because they think it makes them seem pushy and arrogant. Replace the words "pushy and arrogant" with "aggressive and confident" and you have a strong toolset to offer. Remember that you are helping others and offer to spread the love. Ask your current clients if they know of anyone who can benefit by your services and be persistent.

Thirdly, be creative. You can learn a lot from rewards programs when it comes to generating new business. For example, make referrals the key to incentivizing your clients by giving them a discount after they bring you a certain amount of referrals. If your fee is 25 percent, give your client 22.5 percent after five referrals and 20 percent after 10 referrals. The key is that the referrals will generate more money than the discounted percentage.

Outside of discounting existing clients, do something out of the norm in the name of referrals. I know a fantastic insurance salesman who takes his clients on an incredible annual trip. The trip has been to all different places around the country and good enough to keep them coming back. The price to get on this trip is not in dollars but in referrals; 10 referrals gets you on the trip, 20 referrals allows you a plus one.

Another insurance salesman throws an elaborate dinner party where the entrance fee is two referrals, both of whom have to be at the dinner. The brilliance in that idea is the referrals get to enjoy the party and see how good you are to your clients and how loyal they are to you.

Make it known that you are hungry for more business and happily welcome referrals; this will engage your clients on a new level and build your relationship with them as you build relationships with others. Not only do referrals drive your business, but they open a world of opportunity to impress your existing and future clientele.


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Alan Cutter

In the jungle of recruiting, Alan Cutter is the lion. Alan founded New York City's premier digital media recruiting agency, AC Lion International, more than 18 years ago and continues to lead the growing company as their fearless CEO. From start-ups to everything in between, including video, mobile, and social media platforms, Alan steers AC Lion through the intricacies of the integrated and digital media space. With offices in New York, Los Angeles, Austin, and Israel, AC Lion has placed thousands of people and negotiated more than $120 million in compensation. AC Lion was named one of the Top Ten Entrepreneurial Places to Work by NY Enterprise Report.

Prior to AC Lion, Alan was senior manager at OTEC and played an integral part in the company's evolution into HotJobs.com. Much of Alan's success can be attributed to his belief in and passion for people; ask any of Alan's clients or employees and he/she will speak volumes of their boss's care, consideration, as a complement to his innovative thinking and out-of-the-box problem solving capabilities. If you don't see Alan in the office, you can find him in Long Beach with his family and their beloved surfboards.

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