Every salesperson and professional advisor should already know that referrals are the best sources of new clients for their business. Better than advertising, marketing or cold calling.

Referrals are more likely to be qualified buyers, more likely to buy, cost less to acquire, are likely to buy more and take less time to covert.

It’s easy to get the odd referral here or there. Many professionals can even generate a several referrals over a month or two. The key, however, is to keep the referrals coming in a steady stream over a long period of time. 

That requires a more concerted and thorough strategy. There are five keys areas you need to cover to create a strong referral strategy. The outlines of each are covered below. 

Of course, I am already assuming that you are giving great service and can generate trust in your clients – without those two elements, any referral strategy is dead before it begins.

1. Informing your clients.

Planting “referral seeds” is the first step. Right from the start of every client relationship, you need to be looking for ways to inform your clients and prospects that you need, value and expect referrals.

This needs to include your branding, advertising and client conversation skills. A good strategy in this area will make the later stages less confronting for both yourself and your clients.

2. Asking for referrals.

Having informed your clients that you need referrals, you need to be comfortable actually asking for them. It might seem obvious – and while there are other ways to obtain referrals from your clients – asking for referrals is still the easiest and quickest method.

This part of your strategy needs to address not only how and when you will ask for referrals, but in a manner that you are comfortable with. I cannot stress that point enough – there are many good books which outline a variety of different methods to ask for referrals but it’s critical that whatever method you choose, you must be extremely comfortable with it.

Given you will face a variety of client personalities, you will also need at least 2-3 different ways to ask for referrals depending on the situation. Your strategy needs to include a checks and balances to ensure you are getting quality referrals as well – and not just any old name.

3. Incentivising referrals.

While you may expect that giving great service should generate referrals, you will be disappointed. If clients have paid a fair price for your service, then they don’t owe you anything extra.

Sometimes asking for referrals may not be enough – or your client base may be so large that asking every single client is just impractical.

Your referral strategy must therefore also include ways and means to incentivise clients to give you referrals. You need to address both what you can incentivise clients with and how you will offer the incentivisation. 

I am not talking about a “bribe”. Your incentivisation needs to be small in monetary value, but high in other value for your clients. This is of particular concern in the financial, legal and accounting industries.

You may be surprised, however, at what free or low cost incentivisation schemes you can create to help drive more referrals your way. 

This part of your strategy is unlikely to be as effective nor result in as high a quality as asking for referrals. Instead, it’s the “filler” strategy to bulk up your referral inflow.

4. Overcoming objections.

Having informed, asked and incentivized, you will still face clients that either will not or seem unable to provide you with referrals. In this case, you need to understand what is behind their reluctance and see if it’s possible to overcome this resistance.

Often their reluctance is driven by a lack of understanding of how you will contact the referral. Talking through your contact procedure with a client may help them gain confidence that you will not “let them down”.

Still, in certain industries and with certain clients, referrals can be tricky to obtain. An alternative might be to ask them for a testimonial letter instead. Your strategy should therefore include how and when you might switch from referrals to testimonials.

5. Contacting referrals.

Remember that there is a difference between a referral and a lead. A lead is just a name. A referral is a name and a client. A referral strategy doesn’t just obtain names. It also obtains the involvement of your clients in the process of contacting the referral.

Your strategy needs to consider how you will involve your clients in the contacting process and what contact options best suit your industry and clients.

Many referral strategies fall down in this area – having worked so hard to obtain the referral, they then fail to maximise their conversion rate by involving the client that made the referral.

Conclusion.

If you can give careful thought to these five areas, you will be able to define a thorough referral strategy covering all aspects of a referral business. Ultimately, you will drive better quality clients into your business on a more regular basis.