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Boost Your Confidence Break Down Doors Build a Powerful Client List
By MATT ANDERSON
The McGraw-Hill Companies, Inc.Copyright © 2012The McGraw-Hill Companies, Inc.
All rights reserved.
The Fearless Referral Fundamentals
We are about to enter the age of word-of-mouth ... even in this age of mass communication and multi-million dollar advertising campaigns, [it] is still the most important form of human communication.
—Malcolm Gladwell, The Tipping Point
How exactly do I define a referral?
Referral. A referral is when your referral source (Person A) recommends you to Person B because Person A is really pleased with the work you have done.
In other words, you are being recommended for all the right reasons because you have done a good job. There is nothing cheesy or borderline manipulative going on.
Not All Referrals Are Created Equal
One fact we have to acknowledge right away is that the quality of referrals can vary a lot! How enthusiastically people communicate about you and how strong the relationships are between you and Person A, and between Person A and Person B, make a huge difference.
The lowest-quality referral is when you are given the name and number of Person B and he or she is not expecting your call. Because these referrals are so poor in quality in this day and age, this book is not going to spend time on clever techniques to generate a list of names. That is not an effective word-of-mouth endorsement.
Person B should want to talk to you—or at least be open to hearing from you!
You want to get your referral prospects warmed up so that they actually want to hear from you! That's how to run a business that works, is fun, and is based on developing quality relationships.
Why is it so important to have a prospect expecting your call? What's wrong with just calling someone and name-dropping with this unsuspecting person (apart from the fact that you don't like it when it's done to you!)?
The Sandler Sales Institute studied this several years ago, and my experience over the years has found the institute's numbers to be remarkably accurate. Here's how often the following turned into business (not just an appointment):
* 5 percent. At best the amount of business you'll get from cold calls.
* 15 percent. The amount of business you'll get when you use someone's name and say, "Sarah Megson gave me your name"—but your call is not expected. And that person may be a little puzzled why Sarah had never mentioned anything. To the person receiving the call, it feels like a cold call. Many people get suspicious.
* 50 percent. The amount of business you'll get when you have permission to call; your call is expected; you say, "Sarah Megson suggested I call"; and the recipient replies, "Oh, yes, that's right. Yes, she did tell me."
* 80 percent. The amount of business you'll get when you are personally introduced.
Clearly, there are variations on the quality of a personal introduction. Being introduced briefly by chance in the hallway of an office is obviously not as powerful as the three of you scheduling to meet for lunch.
Lessons to Learn
You don't just want a long list of names, none of whom are expecting your call. Unless you're a cold-calling maestro, you're virtually wasting your time.
Certainly some names that you mention to a referral will carry more weight than others. If these two people have known each other for 25 years, that will help a lot. If the CEO is recommending you to one of her vice presidents, that will make a difference (although still a loaded one). But rarely does just having a name work as much as we'd like to think. I am uncomfortable being given just a name and a number because it so seldom leads to business. It never ceases to amaze me how most people think just mentioning their name will make all the difference and how they are usually mistaken!
What you always want to aim for is to ask your referral source (Person A) to warm up his or her referral (Person B) by talking to Person B briefly or finding out via e-mail whether Person B would be interested in a quick conversation.
You want someone else to go to bat for you.
Another advantage of this is that you will avoid one of those meetings where someone has agreed to meet you who has no idea what you do and why he or she is meeting you.
The best kind of referral to get is, without question, the personal introduction—lunch, coffee, or a beer after hours works best. When someone personally introduces you to a prospect, 80 percent of the time the business will happen. Why? Because it gives people a chance to get comfortable with you. Their actions speak volumes for your credibility. Clearly, we save these requests for bigger fish. Revisit your prospect list and decide whom you would like to meet in person.
Believe 100 Percent in the Benefits of Asking for Referrals
The stronger you believe in building a referral business, the more committed you will be to getting outstanding results and to asking for referrals.
Why are referrals so great? Why are they such a wonderful way to build, sustain, and grow your business?
Here's a list of reasons:
1. Asking for and getting more referrals will help you become more assertive. Assertiveness is a wonderful quality. As you start getting results in one area, it will encourage you then to ask for other things: you will ask for more business from the same person (more of the person's assets?), you will ask prospects to get off the fence, and you will expect centers of influence to reciprocate. Assertive is good!
2. Asking for and getting more referrals will help you be more opportunistic. This is a priceless skill to keep honing. We can always get sharper and become more aware of all the ways we can help those in our network. Strive to continue improving in this area.
3. Sometimes you just have to show up sober. A quality referral is the absolute strongest marketing tool you can find. People listen to someone when they trust that person's opinion. When someone has given you a really good referral, many of your prospects come presold, and all you need to explain is how and when the work can get started. I love these meetings!
4. Referrals give you more independence and more control over your business. Why? Because you need people who know, like, and trust you to get referrals. This requires building and maintaining strong relationships. Once you are making a habit of this and you are keeping in touch with your client base, you can always tap in to your resource-rich business because you have been making the "emotional bank account deposits" (see Chapter 2). This provides the foundation for a stable business, which is a much more enjoyable business lifestyle for you.
5. Working with referrals is about helping others—a client-centered approach—when done right. The right approach is when your "referral conversation" is focused on your referral sources' helping people they care about—not some "me, me, me" act of desperation. If your referral sources can see that you are sincerely concerned about the welfare of people they care about, they will take the spirit of your request seriously. Difficult though this is when you need business yesterday, you must focus on helping others first. Take that leap of faith and your rewards will come.
The good news is that recent research supports the client-centered approach. In Andy Sernovitz's Word of Mouth Marketing, he found that the two main reasons why others recommend you are because they like to help people they care about and because it makes them feel good! Neither of these reasons has anything to do with you. Your clients are not motivated to see you drive a nicer car, take more time off, or have plastic surgery!
6. Referrals are great for people who dislike selling and aren't very skilled at it. Now someone else is "selling" you beforehand. It allows you to focus on building quality relationships. The business and referrals will come, provided you ask for what you want (see Chapter 4).
7. Referrals increase your integrity and enhance your reputation. Why? New business comes from real people, not clever advertising or marketing gimmicks. Additionally, you won't have to depend on these things to get new business. If you aren't doing a good job, nobody will recommend you. The fact that you get your business from referrals speaks volumes about the quality of your work and what others think of you. Others are putting their integrity on the line to endorse you. That's the kind of business people trust and the kind of endorsement others listen to. It's a wonderful way to be—personally and professionally.
8. You get to clone your best clients. Often you get referred to people who have similar personalities to that of your referral source. Most people will not refer you unless they like you. This is especially wonderful if you like your clients, because the chances are that they'll refer you to people similar to themselves.
Not long ago I was introduced to the friend of a client. Originally he had told me that if his buddy didn't call me back right away, I was to "tell him Brian will come over and kick his a**!" (I didn't use that line, although I was tempted.) I had a hard time keeping a straight face when we met. This friend was remarkably similar in personality to the client: friendly, energetic, talkative, enthusiastic, and he had a good sense of humor. The meeting went great. (See reason 1.) Sometimes this feels like the biggest win there is to your referral business.
9. It's easier to recommend someone else than to "sell yourself." People listen to third-party endorsements more than you trying to persuade them that you're the best there is. Almost all people have others in their lives whose opinions they respect and whom they look up to and often follow.
10. It's easier to leverage a good relationship to get business than to advertise, cold-call, or buy leads. Consumers are getting increasingly cynical. They expect you to have an agenda that does not sincerely put them first—unless a trusted person is recommending you.
11. You can make more money by saving on other marketing expenses. When you can master having more people open more and bigger doors for you, far more of your marketing is on building relationships. That's wonderful news when your budget has limits. That's also wonderful news if you don't want to tweet or spend time on Facebook because you don't even enjoy it.
12. It frees up time since you meet with warmer prospects that are much more likely to do business with you. It is more productive than spending time with people who are not ready, indecisive, simply kicking tires, or price shopping.
13. You get measurable results every time. You know exactly where the business is coming from and where it's not coming from. This awareness allows you to focus on the relationships and organizations that are helping your business the most.
14. You can feel more peace of mind being more recession-proof. You have a business based on great relationships and people who recommend you to others.
Your desire and attitude determine your success level. How you feel determines your actions. Your actions—what you do—determine your results.
The exciting part is that you are totally responsible for your results. How much you want more referrals is going to be the key. You wouldn't be reading this book if you weren't motivated at all. But how well you can motivate yourself to take a lot of action—that's truly up to you.
It's easy to talk a good game. While who you are as a person is most important, your truest values are revealed by what you actually do—by how you spend your time, not by what you say or have written down on a business plan.
How do you get more motivated to want more referrals?
Try Some Pain: Rule of 20 Percent–60 Percent–20 Percent
Based on two studies on the financial services industry in 2005 and published in Horsesmouth, LLC's Automatic Referrals, the research found that only 11 percent of clients had been asked for referrals. Yet 72 percent and 83 percent, respectively, of those surveyed said they would happily recommend their advisor but had not been asked. How many of your clients do you ask?
Most people get unsolicited referrals from about 20 percent of their clients—2 people in 10. Many salespeople fool themselves into thinking that they have a great referral business because of this 20 percent.
But I believe that there are another 6 in 10 (60 percent) of your clients who would endorse you but need to be asked, and you need to use Steps 3 and 5 from Chapter 6 so it is easy for them. They're not thinking about you until you ask. How many of your clients do you ask?
If the answer is none, then how much more business do you think you could bring in if you effectively asked those 60 percent? (It's important to note that you must earn the referral before you ask for it. We'll cover that in an upcoming chapter, so keep reading!)
It's also fair to say that there will usually be 1 or 2 in 10 (10 to 20 percent) who just aren't going to recommend you. Maybe they can be turned around in time, but they may well be unnecessary "projects."
Try Some Pleasure
First, I suggest that you reread the 14 referral benefits from the previous section. Soak them up. Second, if your referral business is coming from 20 percent of your clients and you're hardly asking any of them, think about what your business would look like if another 6 in 10 (60 percent) of your clients were recommending you!
Not every referral is created equal. I am not going to claim you'll see a 300 percent increase in business. Ultimately, there will still likely be an 80–20 law in most cases (where you're getting 80 percent of your business from 20 percent of the people you know). But until you've asked everyone who is happy with your work (or is considered a "go-to" reference person or friend), what could that untapped potential be? And if a lot more people send you business, that 80–20 spread is going to be much higher up the scale from your present situation!
To get closer to where you want to be, set some exciting referral goals. Remember, it's what it makes of you that matters most, not what it makes for you. Why? Because it is who you become that matters most. You will stretch yourself and think bigger. Your confidence will grow from facing your fears.
These goals need not focus on money. For most people it's better if they don't. Focus on helping more people, on achieving results in other parts of your life, and on getting better at what you do in measurable ways. Good goals can simply be about implementing the Six-Step Fearless Referral Conversation (see Chapter 6).
When you set your goals, set the bar as high as you can. Author Tim Ferriss points out in his book The 4-Hour Workweek that you will have more success aiming higher for two reasons:
1. Ninety-nine percent of people are "convinced they are incapable of achieving great things" and so they never try. That means there are very few people going for gold. If everyone else feels insecure, you don't need to be the one selling yourself short.
2. When you do have an ambitious target, it gets your adrenaline going and you think of more creative solutions. It's as easy as believing it can be done.
While in England on a recent trip, I picked up David Lester's highly informative How They Started: How 30 Good Ideas Became Great Businesses.
In his introduction, Lester notes that almost everyone on the planet has an idea or two for a business; it's just that most people don't pursue that idea—and fewer still succeed. While those that succeeded all behaved in similar ways—it was how they went about growing their business that made the difference.
For most top entrepreneurs, at first there was little monetary reward. Many months and even years later, very little of the money they made was spent on themselves. Quite a few of the 30 people featured worked part time on their business until they thought they could take the leap.
They all focused on one idea. They all kept it simple. Yes, 18-hour days were pretty common because starting momentum takes a great deal of effort and commitment. "None of the founders started out as workaholics—they all began as normal people just like you."
But for each of them, the key was they kept trying and believing.
About half of the businesses in the book had weak sales early on and had to wait much longer than they expected for business to pick up. Every business Lester profiled "had to overcome significant issues to keep trading, let alone succeed; along the way, each founder faced doubt, anxiety, stress and pressure levels way beyond what most employees face; their ability to cope with this, almost always deeply rooted in strong self belief, was an important factor in why they succeeded where so many businesses haven't."
They had motivation, passion, and commitment. This is what you need to improve your referral business.
None of the business owners interviewed set out to become wealthy. None of them! Their motives ranged from wanting a livelihood after being laid off, to wanting to create a higher-quality product or service not then available, to wanting to see if they could make it in a new market.
Lester concludes that it wasn't about being from the right stock or wanting more money that drove these businesses to succeed. They had a focused idea for a product or service that some part of the world needed. "And they needed literally extraordinary levels of passion, energy, self-belief and stamina, the ability and desire to focus, and a good measure of judgment."
My final point here, and arguably the most important, is that your motivation comes most profoundly and lasts longer when tied to your sense of purpose—why you were put on this earth. Connecting to that will take you where you want to go. I sincerely wish you all a healthy dose of these qualities so that you get the referrals and the results you want!
It's A Skill You Can Learn If You Have A Growth Mindset!
Ever catch yourself thinking about someone who gets more referrals than you and saying, "He's a natural," or "She's a lot smarter than I am," or "That person is so much more experienced than I am"?
Even worse, have you ever said, "I don't have that in me"?
Most of us have. Be assured: they have learned their skills somewhere along the line, and you can too—but only if you believe that's within you!
What we tend to do is put the "naturals" on a pedestal based on qualities they have that we think we don't have. For me, when I was newer to the business world, that person was Lorelle. Back then, I thought she had an innate "gift" for giving and getting referrals. She was very good at both—better than anyone else I knew.
I told myself that:
1. She had a more charming personality than I had.
2. She was more business savvy than I was.
3. She had the gift of gab.
4. She was better looking than I was.
Excerpted from FEARLESS REFERRALS by MATT ANDERSON. Copyright © 2012 by The McGraw-Hill Companies, Inc.. Excerpted by permission of The McGraw-Hill Companies, Inc..
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