Referrals Happen Only if You Ask for Them

by Tom Ruwitch

I know a financial adviser who complains that his clients don’t refer enough business to him.

He has relied on referrals to grow his business. But lately, clients aren’t helping.

He hosts a lot of events for his clients, and he hopes they’ll bring friends.

His event invitations include little hints to encourage his clients, such as, “We want to see you and your friends” or “RSVP now and let us know who you’re bringing.”

What’s missing from the invitations? A clear, concise and direct request for clients to bring a friend.

“We want to see you and your friends,” is far less direct and effective than, “We rely on referrals from happy clients, like you. Please consider bringing friends who would benefit from our expertise.”

You don’t get referrals with hope and hints. You get them with a direct ask.
Happy customers can be your best salespeople. But you need to encourage them.

Ask them for referrals soon after the sale when they’re most excited about the new product or service they’ve purchased. If you are an adviser with an ongoing relationship with your clients, reach out regularly. Share good news. Offer strong advice. Remind them you welcome referrals.

Also, make it easier for customers to refer others. Share with them key talking points, sales materials and other information that they can forward to those who might be interested.

Encouraging customers to “spread the word” is not enough. Give them some words to spread.

If your industry allows it, consider rewarding referrals. I know a business owner who sends thank you gifts to customers every time they refer a new customer. Other businesses offer commissions or other tangible rewards for referred business.

At the very least, acknowledge all referrals. Don’t take your customers for granted, especially when they’re helping you grow your business. Let them know you’re grateful.

Let customers know why you’ve requested the referral.

This has two benefits.

First, psychological research has shown that whenever you elaborate on a request by saying, “I asked for this because…” you make the request more persuasive. People tune in. People trust you. People are more likely to respond.

Secondly, when you frame the reason as a benefit, you further encourage your customers to act. When we tell customers about our referral program, we remind them that referrals reduce the cost of sales and allow us to invest more earnings in product enhancements. That’s good for our customers -- even if we don’t reward them directly for the referral.

The financial adviser I mentioned can’t offer commissions or other “payments” for referrals. But he can tell clients that referrals allow him to spend less time on business development and more time on financial planning for them.

Remember, referrals don’t just happen. Hoping won’t move the needle. Hinting won’t get customers to act. Plan a referral program and then just ask.

Tom Ruwitch is the president and founder of MarketVolt, an interactive marketing firm. For more business-building marketing resources by Tom Ruwitch, go to MarketVolt.com/resources.