By Ed Craine and Dr. Ivan Misner
We count on referral sources to keep us surviving when times are tough and to keep us thriving when things are stable (which, fingers crossed, should be any day now). But just as there is a lot of inaccurate information floating around just about any topic you can imagine, the delusions that we may have about referral sources need to be cleared up. Here then are three common delusions that many of us have about our referral sources and why it’s so important that we understand the reality of working with referral partners.
1. Anytime you see your referral partner, you should expect a referral.
If part of your strategy to earn referral business mandates that you must be in front of your referral partner to get that lead, you’re limiting yourself in a big way. In fact, the only way referrals will happen when you’re face to face with a referral source is if your strategy is dependent on you asking for the referral and getting it at the same time.
By contrast, in a strong, mutually beneficial referral system most of the referral process will happen when you’re nowhere to be found. But don’t be alarmed; this is a good thing! After all, you don’t want your symbiotic relationship with a referral partner to shut down just because you’re not within arm’s reach of one another. On the contrary, you want your referral partners constantly looking for opportunities to refer you. Just as you should be in the habit of recognizing good opportunities for them, you want them to be doing the same and persuading prospects on your behalf. Keep in mind that if your partners aren’t thinking of you unless you’re directly in their face, you probably haven’t done a great job at training them on how to best sell your services.
This doesn’t mean that you won’t ever receive referrals when you’re in the presence of a source or partner. Often times this works out incredibly well. Certainly we’ve all been fortunate enough to meet someone at a mixer, at the grocery store, or wherever, and wind up with a hot lead. But never limit your opportunity to linear marketing only. You simply can’t meet people quickly enough to sustain your business, not to mention close loans. Remember that networking is based on leveraging the impact you can have on your target market. If you have sources and partners promoting and referring you when you’re not around, your results will be exponential as opposed to linear.
To that end, avoid turning every gathering into a quest for referrals. If you ask for referrals from clients every time you talk with them or meet with them, you’re doing yourself a disservice in at least two ways. First, you’re training them to refer you when you’re there, but not when you’re elsewhere. Second, you’re really just making withdrawals from your referral bank when you should be making deposits by finding ways to help your partners in return.
2. Maximizing your potential for referrals means you should bounce from one networking group to another.
In theory, this would seem to make sense, wouldn’t it? The more networking, the better? Well, that’s not necessarily the case. This is known as “scorched-earth” networking, and it’s about as appealing to others as its name implies. The scorched-earth networker essentially burns and pillages for new business. He’s a hunter at mixers and events and always far more interested in bagging the big sale than in building relationships. In short, he does everything he shouldn’t do if he’s looking to earn referrals.
The scorched-earth networker is eternally dissatisfied with the quantity and quality of the referrals he receives, so he figures he better move on. He jumps from one networking group to another, never taking the time to establish relationships, networks relentlessly with everyone he meets (often inappropriately), and expects referrals from others even though he has done nothing whatsoever to earn them.
The scorched-earth networker doesn’t stay in one place long enough to build the kind of relationships necessary to capitalize on networking opportunities. Successful networkers instead understand that in order to build mature, mutually beneficial relationships, they must devote a lot of time and effort to growing those relationships.
“Time equals money,” right? This is particularly true when it comes to membership in a referral-networking group. The longer you commit to building the relationships, the greater the results you get.
3. Your best source of referrals is your clients.
People sometimes fall into this delusion because they’ve been trained to believe it and have never pursued any other source of referrals. To put it another way, the only referrals they’ve ever received are from clients.
Don’t get us wrong. Clients can be a good source of referrals; we know that. However, other referral sources are available that can be extraordinarily powerful as well. Just because your clients are the most readily available sources, doesn’t mean that they are necessarily the best or steadiest sources of high-quality referrals. The best sources in the long run are likely to be the people you refer business to. When you help another build their business, you’re cultivating a long-term relationship with someone who will then have motivation to return the favor.
With a strong referral network, you can earn more qualified referrals from one or two sources than from all your clients combined. Why? Because these professionals are–by and large–better salespeople than your clients. They know how to sell you, especially since you’ve taken the time to educate and train them how to refer business to you.
Yes, you can expect to get referrals from a happy client, but you’d better make darn sure the client is ecstatic with your services. This means you must keep your attention and your motivations focused on your client’s needs when that is the purpose of the meeting. However, you can certainly ask for a follow up appointment to specifically discuss how they might be able to refer you to others.
Ed Craine is the publisher of Broker Banker Magazine and the CEO of Smith Craine Finance, one of the nation’s leading mortgage brokerages in 2009, according to Goldline Research. Ed welcomes questions at firstname.lastname@example.org or via phone at 415-406-2330.
Called the “father of modern networking” by CNN, Dr. Ivan Misner is a New York Times bestselling author. He is the Founder & Chairman of BNI, the world’s largest business networking organization. His latest #1 bestseller, The 29% Solution can be viewed at www.29PercentSolution.com.