Benefits of a New Business Referral System
The lifeblood of most agencies
When you analyze the cost of acquiring a new client, generating new business from referrals is usually the least expensive. Realizing this, the natural question to ask is, "How do I get more?"
I've been thinking about this and did some research to help me put together a fairly simple referral-building plan. Here are some ideas that I hope will be useful for you. If you have additional ones to add, I'd love to hear your suggestions.
Define Your Referral Network
- Identify and categorize your prospective referrers: these should include past and present clients and co-workers, partners, affiliates, friends and family, vendors, etc. You might list them in column one of a spreadsheet.
- In column two, indicate how fresh they are. You might use a letter or number system: for example, an A could be very fresh and a D 'haven't talked to them in five years'. The resulting groupings will help you focus on nurturing the freshest ones and reacquainting yourself with the stale ones.
- In column three, segment them by industry, region of the country, or target companies. How you do this is best determined by how you plan to prospect.
- In column four, prioritize who you want to approach when, and then assign responsibility to specific people, with due dates and milestones.
Determine What's In It for Them
Get your new business team together and create a value proposition that's interesting and meaningful for each person you plan to approach. It needs to be clear what's in it for them. (Once you figure out what's valuable for them, the quality of your referrals should improve dramatically.) Answering these questions should help you define your message or offer:
- Why should they want to help you?
- What will they get out of it?
- How will doing so help their company or them individually?
- How will you help them in return?
Invest Time To Get a Personal Introduction
The most common referral is getting permission to use someone's name to open the door. While we'll all take this type of referral, the real "golden key" is a personal introduction. How do you do this? Your best chance is to help them first so that they'll be much more willing to help you in return. As you do this you want to:
- Get to know them really well, and they you.
- Truly understand their needs so you can refine your "what's in it for them" (when the time comes).
The only way to get a personal introduction is for your prospective referrer to really know you, and even better for them to know you and your firm. This process requires patience, so be careful not to put your hand out too early! You have to earn the right to ask for a referral.
Stay in Touch
The game isn't over when you get a referral. Those who open a door for you want to know the result of their introduction, so follow up and tell them what happened. Don't ask for more help, but recognize that once they know you'll do well by those they introduce you to, they'll be likely to help you again.
Make sure your referral network knows how much you appreciate their effort on your behalf. Thank them in a meaningful way. For example,
- Write a hand-written thank you note.
- Take them to dinner, a ball game, to play golf - make it something they like to do.
- Include them in the celebration after winning an account.
- Introduce them to someone you know that they'd like to meet.
- Offer them help or free service on an important project they're responsible for.
If multiple people in your agency each have and carefully nurture a well-thought out, small referral group, it should help you create a long-term new business pipeline.