Are You Referral Ready?

Archive for the ‘Connecting with Your Referral Sources’ Category

Along with cash, benefits, and recognition, sales people respond to what kind of training is available when they evaluate opportunities. Think about your company, your referral sources, and what you have invested in them to help them become proficient at sending you business. As a result of the training you provide your referral sources, how motivated are they to continue bringing you quality referrals?

Untrained referral sources can still be effective, but always to a lesser degree than if you take the time to show them how to refer, whom to refer, and an easy or fun way to do it. Like any top salesperson, referral sources appreciate knowing what will make them more successful.

When you take the time to give your top salespeople more of what they need to be successful, you are investing in the relationships that drive your profitability. Your training strategy will pay off when you start acquiring even more of the kind of clients you want while lowering your marketing costs along the way.

Top sales people value recognition. It validates their effort and contributes to their overall sense of accomplishment. Based solely on the recognition you give to your referral sources or top referring customers, how motivated are they to refer you more business?

The moment you start taking a referral relationship for granted is the precise moment it starts to fade away. The “give first” cycle resets when you gain, and offering your best referral sources a little well-deserved recognition keeps the mechanism of reciprocity in proper working order. If your withdrawals on social capital continue to outnumber your deposits, a deficit situation throws the dynamics off balance.

Evaluate what you have done to recognize your top referral sources for their efforts. Did you publicly thank someone who has gone out of his or her way to help you? In the last 60 days, did you send a thank-you gift or card to a referral source who brought you unexpected revenue? Did you introduce the referral source to someone and endorse him or her in exceptionally glowing terms? Did you provide a written testimonial they could use for marketing purposes? Did you promote their business in a newsletter article or advertisement? Try to come up with two ways you can recognize the efforts of your referral sources.

They know you, they like you, they trust you, and they know how to refer business to you. Your referral sources have a lot going for them, and they might also have their own businesses to tend to. What they don’t always have is the motivation to keep seeking referral opportunities for you. Since they probably expect very little in return, a little recognition can serve the referral source and the relationship at the same time.

Surely there is something beneficial about being in relationship with you that goes beyond a financial or business transaction. Your referral sources place value in those benefits. They accumulate over time and contribute to the depth and overall health of the relationship. As a result of the benefits you offer your referral sources, how motivated are they to refer you more business?

Reduced to transactional terms, a referral relationship can still serve both parties. But the human factor is what makes me choose you over another referral partner, and you can figure every one of your referral sources has the option to feed another business besides yours. It is their relationship with YOU that makes the difference. Strengthen the relationship and the rest happens naturally.

How you can show your referral sources–the people who are already inclined to refer business to you–the benefits of being in relationship with you? Could you introduce people in their company to influential people in your network? Could you help them secure a new vendor? Could you help them close a deal based on your recommendation or testimonial? Could you attend a trade show or function they were hosting? Try to come up with things you can do for each referral source that adds value to the relationship itself.

Sales people are attracted to compensation systems that offer both cash and benefits. Your referral sources are your sales people. They value their relationship with you, and the benefits of that extend beyond the last referral or the next referral. Perhaps in between is your best opportunity to demonstrate to your referral sources the real benefits of working so diligently on your behalf.

Unlike perhaps a career sales professional, your best referral sources are probably motivated enough to sell your products and services on essentially a volunteer basis. Why? Because by servicing the people they refer, you make your referral partners look good in the process.

Whether a commission is earned or not is irrelevant. You have a sales force to manage. Don’t let mutual admiration get in the way of a smart compensation package. Just because your referral sources are volunteers, don’t think for a second they don’t appreciate being compensated. Maybe, just maybe, they’d appreciate referrals from you as well.

Have you “paid” your referral partners lately? Are referrals flowing only one way? Based on how you “compensate” your referral partners, how motivated are they to bring you more referrals?

Unless you can feed the relationship with your referral partners, it is not likely to support you or your business over the long term. There are many ways to feed a relationship, but reciprocating with good referrals models the behavior you are trying to encourage and creates a cycle of goodwill.

Think for a moment specifically about the three people you consider your strongest and most valuable referral sources. Ask yourself these questions:

• Have you “paid” them in the last 30-60 days? If not, how realistic is it to believe they are working hard for you?

• Do you pay extra to those who generate the best results? If not, what motivates them to continue performing at such a high level?

As the manager of a volunteer sales force, evaluate your own compensation system. Like any sales manager, your challenge is to build and motivate your team. The goal is never to accumulate as many referral sources as possible. The goal is to maximize the number of referral sources that you can feed, support, and manage. This takes effort on your part.

Feeding your referral sources is an investment strategy. Invest wisely, and you’ll find that the best fuel for reciprocity is a commitment to relationships that benefit all parties.