I'm currently working on a new book with two business
associates, Mike Macedonio and Mike Garrison of the Referral
Institute. In the process of working on our book, the thought
came to us that many entrepreneurs have perceptions about referral
marketing that aren't based on reality. In fact, they're
delusions.
With that in mind, I'd like to share with you some of these
referral "truth or delusions." See if you can tell the
truth from the fiction.
Truth or Delusion? If you provide good customer service,
people will refer business to you. This one's a delusion.
Many, many entrepreneurs think that good customer service is the
number-one way to cultivate word-of-mouth marketing and referrals.
But it's not! It's a good policy and one that's vital
to the health of your business, but it's not at the core of
building a referral-based business.
Content Continues Below
People have come to expect good customer service. In fact, they
demand it in today's marketplace. When considering customer
service and its role in the referral process, it unfortunately
works much more effectively in reverse: People are more likely to
talk about your business when they're unhappy with you than
when they're happy with your service.
So if you want to build your referrals, you must actively
cultivate your referral sources and not rely on good customer
service alone.
Truth or Delusion? For maximum referral impact, you should
cultivate relationships primarily with the movers and shakers in
your community. This one's also a delusion. The common
perception is to look for influential individuals who will
hopefully be able to provide large referrals for your business that
will result in big sales.
I once heard a very interesting story that really brings this
point home. A few years back, I was chatting with a local business
owner I knew about the impact that all types of people can have on
our referral business. The man owned a window covering business.
During our conversation, he proceeded to tell me about a referral
he got from a rather unassuming man he knew. It seems that this
man's friend, an elderly woman living nearby, had one small
window on a back door that needed a roll-up screen and he could
find no other window covering business that 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 the man's
relief. About two weeks later, a large, black 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 into his store. It was this little old lady's son!
He had been very impressed with the work done at his mother's
house and wanted to do business with my friend. He had just
purchased a 6,000-square-foot house in Malibu and wanted my friend
to handle all the window coverings on an unlimited budget
(visualize with me all the windows in a really large house right on
the ocean).
This is a great example of how a seemingly non-influential
individual could provide you with 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 whom it is who knows just the right person to introduce
to your business.
Focus on the quality of the relationships you develop and
cultivate those relationships on all levels. The diversity of your
contacts is much more important than looking for the "big
guys." You'll be amazed how much better this approach
works in the long run.
Truth or Delusion? People who like, care and respect you will
refer business to you. You guessed it: This is absolutely a
delusion! How often do you regularly get a referral from your mom?
Yet you'd certainly be right to expect a referral relationship
from those closest to you, such as friends, family members and
other close associates.
The problem is, we don't remember that we need to train the
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 who might need our products.
Teach those closest to you to listen for the "language of
referrals." When people say words like "I want"
"I need" "I can't" "I wish" or
"I don't know who," whatever they say next could be a
referral. When we teach our referral sources how to listen to the
language of referrals, then we provide the tools for them to refer
business to us.
Truth or Delusion? It's best to limit the number of
networking groups you belong to. Truth! Networking is more
about farming than it is about hunting. This means you need time to
cultivate the contacts you make. In a recent survey of almost 1,800
businesspeople my company did, almost 32 percent of respondents
attended eight or more networking events a month. One-third of that
group attended between 12 and 20 networking events a month!
Building your business through word of mouth is not a contest to
see who can attend the most meetings. It's about building the
best relationships! Therefore, you must be selective about your
efforts and focus not only on attending meetings but also on
building bonds with the people you meet at those meetings.
Unfortunately, it's all too common for businesspeople to focus
on breadth--not depth--in their networking.
Truth or Delusion? The best way to ensure referral success is
to follow the Golden Rule: Treat your referral sources the way you
would want to be treated. Unfortunately, again, this is a
delusion. While this may seem like a "trick question,"
it's not. All too often we deal with our referral sources the
way we'd want to be treated. If we want to strike a chord with
them, however, we need to keep in mind that it's important to
remember what they want and need. The referral process is
more emotional than it is factual. It's crucial that you find
out what's important to the referral source in order to
maintain and develop the relationship.
Truth or Delusion? Referral marketing is the safest form of
advertising. This one's definitely a delusion! When you
give a referral, you give a little of your reputation away. If the
business you've referred someone to does a good job, it helps
your reputation. But if they do a poor job, your reputation may be
hurt.
The payoffs of referral marketing are immense--when done right!
But it involves a really big risk: 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 them, you must have confidence in that friend.
But what happens if your friend lets your customer down? It
comes back to haunt you. Your customer begins to lose faith in you,
and because of that loss of faith, you just might lose that
customer down the road. This is why it's so important to
develop strong relationships with those to whom you're
referring business 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 "truth or delusion"
examples we've come up with. If you can think of others, feel
free to them to me.
Ivan Misner is a New York Times bestselling author and
the founder and CEO of BNI, the world's largest referral organization
with thousands of chapters in dozens of countries around the world.
His new book, Masters of Successcan be viewed at www.MastersofSuccess.biz. Misner teaches business at
Cal Poly University, Pomona and resides in Southern California with
his wife and three children.