Why You Need A Referral Strategy
Without a doubt, referrals are one of the best marketing strategies. The business that comes from referrals are transferred with inherent trust.
However, some entrepreneurs find it uncomfortable asking for a referral. Some may ask for it too late into the business transaction, while others not at all.
In this episode of the Influence By Design podcast, Samantha and Tim throw light on a topic every business owner should know – why you need a referral strategy.
Asking for referrals at the right time, pre-framing that you accept referrals, and knowing the perfect time to ask for referrals, all need to be part of your referral strategy.
If you’re ready to create a referral strategy for your business, let’s dive in.
IN THIS EPISODE YOU’LL DISCOVER:
- Where to get referrals (03:28)
- Understanding upstream and downstream referrals (06:43)
- The value of pre-framing your referral strategy (11:01)
- Asking for referrals at the right time (13:40)
- To offer incentives or not? (15:30)
- The importance of referrals in your business (18:35)
QUOTES:
- “If you’re not working a referral strategy in your marketing mix, you’re missing out on lots of opportunities.” -Tim Hyde
- “Referrals have the highest conversion rate of any type of marketing.” -Samantha Riley
RESOURCES MENTIONED
- 369: What Is Marketing, and Why Is It Important?
- The BLACK DIAMOND Program for Thought Leaders & Visionary Entrepreneurs
SHOW SPONSOR
This episode is sponsored by Your Podcast Concierge. Affordable podcast production for coaches and speakers who want to increase their authority and generate leads from their show. You press record, and let them do the rest.
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WHERE TO FIND TIM HYDE
- Website: https://winmoreclients.com.au/
- Facebook: Win More Clients
- LinkedIn: Tim Hyde
CONNECT WITH SAMANTHA RILEY
- Facebook: Samantha Riley
- Instagram: @thesamriley
- LinkedIn: Samantha Riley
- Twitter: @thesamriley
TRANSCRIPTION
Samantha Riley snippet (00:01)
I find that a lot of people feel weird because they don’t understand when to ask for the referral, or quite how to ask for the referral. One of the things that I learned many, many years ago is about asking at the right time.
Tim Hyde snippet (00:17)
Set up a cadence. If you have that cadence in that communication, where you know what each other does, and you sit down and deliberately look at ways that you can introduce each other, you will suddenly find that you have a steady stream of opportunities coming for those relationships.
Intro
Samantha: (00:32)
My name is Samantha Riley, and this is the podcast for coaches, course creators, and experts who want to grow their influence, income, and impact to take their coaching business to a million dollars and beyond.
We’re going to share the latest business growth, marketing, and leadership strategies, as well as discussing how you can use your human design to create success in business and life. Inside and out. Create the influence, income and impact you need to build your business, so you can create your ideal lifestyle. It’s time to make a difference and scale-up. This is the Influence By Design podcast.
Samantha (01:12):
Welcome to today’s episode of Influence By Design, I’m your Thursday co-host Samantha Riley and joined by my lovely co-host, Tim Hyde. How are you today, Tim?
Tim (01:22):
What up, Sam?
Samantha (01:23):
Oh, nice. He’s bringing the energy.
Tim (01:29):
Oh, yeah, I try to. We’re recording quite late in the evening. You’ve had a big day, as do I. I thought you know, let’s just buzz it up a bit. Other than that, we’ve got an awesome topic, one of my favourite topics.
Samantha (01:40):
It is one of your favourite topics, this is something that I’ve actually learned a lot from you about. So I’m looking forward to tapping into this.
Tim (01:49):
Aww
Samantha (01:50):
Yeah, well, you know, credit where credit’s due, we’re going to talk about how to create a referral strategy. I know for me, when I speak to a potential client, one of the questions I ask them is if they have a referral strategy, and I don’t think I’ve had anyone to this point actually say they do.
So this is something that is really, really important is to actually have a strategy around referrals.
Tim (02:15):
Yeah, well, we talked about this a few episodes back right? Referrals are a channel for your marketing, right? It’s going to bring a way of bringing in new business. And look, I’ve long thought referrals are the best strategy. I think studies that I’ve seen using the similar one, Sam says referrals are the best way to get new business.
Universally, it’s the best way to get new business closely followed by speaking on stage. And then advertising and other things way, way down the list. In terms of effectiveness, scalability is obviously very different.
But as you say, it’s really interesting to see how many businesses rely on referral business as their best source of new opportunities, but don’t have any form of referral strategy in place to ensure that this pipeline actually works for them?
Samantha (03:15):
Absolutely. Yeah. If it’s your largest source of new business coming into your business, then leaving it to accident is probably not the best option. So let’s jump in, Tim let’s talk about how we create a referral strategy or how we can leverage referrals the best way?
Tim (03:38):
Yeah, okay. I think Sam any referral strategy starts with two sources. One of those is from partners and joint venture partners, strategic partners, and the other one is from your customers.
So I think those are the two we need to look at. To make either thing work, just like any marketing strategy, we need to work at those things. So if you’re going to get joint venture partners and strategic partners or referral partners to refer to you on a regular basis, we need a strategy about how we build that relationship, how we communicate the value that we bring to that person’s audience and make sure that we continually execute it right. Otherwise, it just doesn’t work for us.
So you and I talk on a regular basis, we are referral partners, and we do refer to each other on a regular basis. You couldn’t do that if you didn’t know what I do. And I with you, if I didn’t have a really deep understanding of what your service offerings are to the clients and the benefit that you provide to your clients.
Samantha (04:45):
I think that the most important piece here is not just understanding what the other does, but also talking about it regularly. So having a regular communication rhythm in place.
Tim (05:00):
Yeah, and you changed what you do, right? But if we go back a few years, your business has changed, my business has changed, the core of it is still the same, but the service offerings are different.
So what I see a lot is when people jump into, say, networking groups and things, I’m going to build these partnerships. And when you sit down with someone and go, yep, refer each other, and you kind of hit off in different directions, you don’t talk to each other, you don’t really come up with a plan of action about what you’re going to do and how you’re going to get across promote or cross-refer on a regular basis.
And you really don’t spend the time educating each other on the nuances of what it is that you do. Then suddenly wonder six months later, again, no, that was that guy’s name that’s from the referral event.
Samantha (05:48):
Yeah, that’s right, even if you do remember the right?
Tim (05:50):
So from a strategic or referral partner perspective, you’re going to set up a cadence, right? Whether it’s meeting weekly, whether it’s meeting fortnightly, whether it’s meeting monthly, whatever it happens to be, set that cadence.
In that meeting goes, I’d say, “Sam, who have you started working with this week? What are their challenges? Yeah, I think I can add value to that relationship there, are you comfortable introducing me at that particular point?” and vice versa.
If you have that cadence in that communication, where you know what each other does, and you sit down and deliberately look at ways that you can introduce each other, you will suddenly find that you have a steady stream of opportunities, coming for those relationships, and obviously, select more of those relationships you have, the more opportunity those relationships will then generate for you.
Samantha (06:37):
Absolutely, so we’re talking specifically about partnering with aligned businesses. Now, before we started recording, you mentioned something, which is really important. And that’s to understand other people that you’re partnering with upstream or downstream from the services that you’re offering.
Because you can’t always have reciprocal referrals. Can you go more into this? Because I think that this is really important. It’s not a tit-for-tat, it’s not I’ll refer you one person, and now you refer me one person back because it doesn’t work like that.
Tim (07:15):
Not necessarily. I’m just trying to think of some examples here where depending on the customer journey. If you think upstream, or downstream, who is it that deals with your ideal client before they get to you? And who is it that deals with your client after you finish with them?
So let’s pick a real estate agent as an example, if you’re a real estate agent after you’ve sold a house to somebody, what is it that they need, before or after you. They might need a removals company to move into the house, they might need or move out of the house that you’ve just sold. They might need gardening services or an introduction to the school in that area.
That’s an example of a downstream referral. So somebody who deals after you, let’s take the real estate agent, again, who deals with a real estate agent before they sell their property. Right? It might be a financial advisor, mortgage broker, something like that. An employment consultant, who’s bringing people into the area, or out of the area recruitment agent.
If we think like that, then we can sort of work out who happens before us, and who happens after us. Sam, for you in Black Diamond, where you’re helping people grow their business, who else do they need after you. It might be, I need an HR specialist, or suddenly they need more people in their team to deliver with all this new business that they’re now doing?
Well, who were they dealing with beforehand? Okay. I know you deal with other people, who come out of the corporate world transitioning into their own business. Okay, so who is it in corporate? Right? And it might be I don’t know, what do you call it? I’m just thinking there are some movies I’ve seen where someone comes in and fires everybody here’s your redundancy package. What do you call those people? Career Strategist?
Samantha (09:31):
Uh-huh. Yeah.
Tim (09:32):
Okay. Might be someone upstream from you, right? Who doesn’t do what you do, but is having a conversation with your ideal client that might be somewhat related?
Samantha (09:43):
I find a really great exercise to go through here is to sit down and really brainstorm who all of these people are, like, really sit down and think who could they possibly be? I will bet that if you’re just brain dumping everything onto a piece of paper, you will come up with people that you haven’t previously thought of.
It opens up a new idea for you to be able to go and follow him. It might work it might not. But it may get some ideas flowing as to some different people that you can work with.
Tim (10:18):
Yeah, so there are opportunities like that. And obviously, there are some that are going to be really aligned. You can go potentially one for one, or two for one, or whatever it is. But there are other ways that we can help each other, we could promote, cross-promote, you could do a podcast for somebody, you could promote their social media posts, or share their lead magnets with your audience, bring them in as a guest expert on a webinar, as well.
That’s another way that you can cross-promote each other. Ultimately referral partners are about taking someone and putting them on a pedestal as an expert to your audience and transferring some of that trust.
Samantha (10:55):
Yeah, exactly. Transferring that trust totally. So that’s partnering with aligned businesses. The other thing that you mentioned is your current clients or your customers.
I find that a lot of people feel weird, because they don’t understand when to ask for the referral, or quite how to ask for the referral. Now, one of the things that I learned many, many years ago, is about asking at the right time.
Tim (11:27):
Absolutely, it is the right time. But I think even before you ask at the right time, I think it’s important to pre-frame referrals. One of my favourite strategies is when you initially meet a prospect for the first time, and you ask the question, “hey where did you hear about us?” And they go, I saw you on TV or a Facebook ad or whatever else? Or, you know, I was listening to the podcast, which of course you should be doing, because it’s awesome.
Sam, congratulations on 13,000 downloads in April, that’s top 2% of all podcasts, right? So awesome stuff. You’re here, you’re in that upper echelon. But pre-framing is really, important that if we say, hey, look, that’s great, but it’s really interesting you say that.
Most of our business comes to us via referral. It’s all pre-setting in the client’s mind that, hey, maybe down the track, I might be asked for a referral, as well. I used to have it on my business card and said by referral only and people actually looked at it and go, Oh, you must be exclusive.
Samantha (12:40):
Wow, that is so cool.
Tim (12:42):
Yeah. Actually, I had one person say, “Am I able to refer myself?”
Samantha (12:48):
Well, if you want to, we might just take your business.
Tim (12:55):
Yeah, but we think about a medical specialist that is by referral only. That makes them both higher-priced, but also harder to get into. That has certain perceptions around, we don’t just take anybody, it’s by referral only.
So there are lots of little strategies we can play to pre-frame. Even before we get to that point in, as you were sort of alluding to this, in your delivery, where the client recognizes incredible value, and we get that opportunity to ask
Samantha (13:30):
Yeah, because we do need to be able to ask at some point. There are definitely going to be people that will refer without being asked. But there are also times when it’s like, okay, let’s ask for the referral.
Now, where I was alluding to before is that many people ask for a referral, when they have finished with that client, or when the client is finishing up. That’s not always when the clients are at the highest energy vibe.
So if you only deal with a client for a very short period of time, or you only have one interaction, then obviously you’re going to be asking them as they’re leaving or finishing up.
But if you work with a client over, a 12-week period, or maybe even a 12-month period, where at the process, are they at the highest vibe, where they get that first win where they’re just on cloud nine? Because if you can ascertain where that point is, that is the time to ask for the referral.
Tim (14:29):
Yeah, absolutely. It is that value check-in. You should, in your delivery process, have a value check-in, right. By this point, you’ve got to hear, how do you feel about that first one, and they’re going, Oh, my God, it was great.
You can’t just assume that they’ve had that value when you’re going to ask I think, to make sure that someone says “Sam, we’re at this point now. Just curious, right and what’s been the best part of the journey for you so far?”
You’re going to go think of all the amazing things we had this, and we had, and I got my revelation was this and at that point, you’ve banked all that kind of goodwill. Now, there’s the opportunity for you to take a deposit out.
Yeah. That’s great. “Hey, just curious, do you know someone who might be looking for some similar outcomes that we’ve just achieved?” For you? I haven’t banked that stuff? And you ask, you’re not going to get the same result.
Samantha (15:33):
Totally. Let’s talk about its incentives. Because there’s often a lot of conversation around, should I offer an incentive? Should I not offer an incentive? I think there’s definitely room for both. What about you, Tim?
Tim (15:45):
Yeah, like, I think so. But I think the incentive has to be actually an incentive, right? I know, incentive-based referrals are far more common in the US than they are here in Australia.
But I’m going to tell a quick story. I remember, quite a few years ago now would have been 10 or 15 years ago, a guy that was doing some local area marketing, developed an incentive program and presented it to me and said, “Hey, you can refer businesses to me, and I’ll give you an incentive.”
I think it worked out 2.07 cents per household in that sort of catchment area for a particular business. It may have worked out to like seven, but somewhere between $7 and $15. If I referred him, I was going to earn somewhere between $7 and $15. Now it was recurring.
So slightly better, but still seven and 15. Seven to 15 bucks, for me, wasn’t a big enough incentive for me to keep it top of mind. The reason you’re offering an incentive ultimately is to keep it top of mind, with your client, and or your referral partner, so that they go, this is going to be awesome.
Personally, I’m a fan of actually the incentive being, that we’re just going to get a better outcome for a few people. But that’s not always and particularly when it’s not reciprocal, right?
If there’s an upstream or downstream, you may want to offer an incentive that’s attractive enough that the person says, “Yep, I’m going to keep that in mind. And when I do come across somebody this is who I’m going to introduce.”
Samantha (17:22):
Yeah, absolutely.
Tim (17:28):
Now I think you said something again, before the podcast, this is another reason why we should record our pre-episode is that the incentive doesn’t have to be monetary.
Samantha (17:41):
Totally. Thank you for the reminder. I was saying that it doesn’t necessarily have to be, you referred me to one person, and I’ll give you this amount. It could be something that is banked over the year.
So at the end of the year, your top 10 referral partners get to go on a fancy dinner cruise with you. Or maybe they get a travel voucher or something like that, it doesn’t necessarily need to be a monetary payment for every single referral.
Tim (18:13):
It can be like a little handwritten card that says, “Hey, thanks for that referral, really appreciate it. It was a great client, and I really appreciate you producing this.”
Samantha (18:22):
I’ve never had someone say, “No, I don’t want that bottle of wine. Sam” when I hand it over.
Tim (18:29):
Look, I’m curious Sam, how important referrals are to your business?
Samantha (18:35):
Very important. Very important. Actually, let me put it in a different way, they are the highest conversion of any type of marketing because you’ve already got the transferred trust from someone else. So having a sales conversation with someone that’s been referred is a lot easier.
Tim (19:00):
Yeah, it’s almost it’s not selling then, is it? It’s, are we a good fit?
Samantha (19:07):
Yeah, pretty much. Oh, you want to work with me? Okay. That, you know, it’s that easy.
So, yeah, they’re super, super important.
Tim (19:16):
Yeah, absolutely. I would agree with the same, I think all of my best clients have come via referral. And that’s pretty telling. I think if you’re not working this strategy somewhere into your marketing mix, I think you’re really missing out on lots of opportunities.
Samantha (19:32):
Absolutely. I agree. You get the best clients from referrals. And as you mentioned earlier, Tim in the absence of a referral, if you can’t get a referral, always try and get a testimonial.
Tim (19:45):
Yep. Agree. Either way, the same opportunity client has recognized value. Don’t just ask for a testimonial, ask for a referral and be comfortable doing that. Then ask for a testimonial.
Samantha (19:58):
Absolutely. Awesome. So I hope you got some ideas from today’s episode, we’d love you to share this with someone that you know that would like to create a referral strategy or would benefit from creating a referral strategy in their business.
If you liked this topic, and you want to stay notified as we drop episodes every Tuesday and Thursday, just scroll to the top of your app and hit that follow or subscribe button.
Tim, thank you so much for joining me again this week.
Tim (20:27):
Awesome to be here and to talk about one of my favourite topics.
Samantha (20:30):
Brilliant. Thanks so much. I’ll catch you on the flip side. Ciao.
Outro (20:33):
Thanks for joining me for this episode of the Influence By Design podcast. If you want more, head over to samanthariley.global/podcast for the show notes and links to today’s gifts and sponsors. And if you’re looking to connect with other coaches and experts who are growing and scaling their business too come and join the coaches course creators and speakers group on Facebook, the links are all waiting for you over at samanthariley.global
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