Referrals are the lifeblood of most small businesses. Everyone wants to get referrals, but not everyone knows how to give them. If you give good referrals, you’ll build goodwill, get more business, and increase your income. Here are a few things to keep in mind the next time someone calls you to ask if you know a good [fill in the blank].
People ask for referrals to save time
Referrals can save hours of time spent wading through websites or ads in the Yellow Pages and then make a series of phone calls. People who ask you for referrals don’t want your whole Rolodex. Even if you know a dozen good mechanics, the caller only needs one. Unless the caller is asking for a list (say, of media contacts), only recommend one person. (More on this below.)
People ask for referrals to avoid making decisions
Too many choices lead most people to making no decision at all. Keep this in mind when someone asks for a referral. A decisive endorsement of one person or company reassures the caller—and makes you look authoritative and knowledgeable.
People ask for referrals to avoid getting burned
Almost all of us have had at least one Client (or Vendor) From Hell—but that client probably didn’t come to us from a referral. Referrals increase buying confidence. Someone you’ve worked with is a better person to refer than someone you haven’t. Someone you see every week is better than someone you’ve only met once. Reliability is more important than price.
People ask for referrals to find a good match
One person’s Client From Hell is another person’s perfect client. If your brilliant accountant is a moody introvert and the person who just called because tax time is coming is a bubbly extrovert, they might not make a great team. Consider personalities when making referrals.
People ask for referrals because they have special needs
If your client needs a very specific kind of website, then not every web designer out there, no matter how personable and trustworthy, will fit the bill. It’s a good idea to ask the caller for details before making a recommendation. That makes it easier for you to recommend the right person.
How to get better follow up (and make sure you get credit for the referral)
Once you’ve decided whom to recommend, ask “Would you like me to have this person call you?” Then immediately get in touch with the person you’re referring and let them know your client is expecting a call.
And speaking of credit…
If you find yourself referring dozens of people to one particular service provider, consider making a formal referral arrangement, one where you get a flat fee, a percentage of the first sale, or a service credit with the person who’s getting all this business because of you. In some cases, mutual referrals are a better option than fees. Make sure each of you knows what the other person does and for whom (the “elevator speech”) and has a stack of business cards, postcards, or one-sheets to hand out.
If you give good referrals, clients will think of you as a resource and recommend you to their friends. Your business and your income will grow through referral partner arrangements, and you’ll have the satisfaction of helping people get what they need.