Reality: Even if they’re happy with you, they’re still unlikely to suggest your services to others. They’re busy, distracted and unaware of the power of their own recommendations.
Still, if you’ve provided a good experience for a client, he or she will likely be happy to refer you to others; it’s human nature to want to share a good experience. They just need to be asked—and that’s the part that gets tricky. And awkward.
“Asking people for referrals is right up there with asking your friend to come to church with you on Sunday. It's downright uncomfortable,” says David Frey, president of Marketing Best Practices Inc.
Persistent asking can also be off-putting: It can imply that the person has nothing better to do than shill for your benefit.
People like giving referrals; it’s human nature to want to share a good experience.
Ray Silverstein, a sales columnist for Fortune magazine, has a different point of view. “Don't feel sheepish about asking for referrals; there's nothing pushy or smarmy about it,” says Silverstein.
“Let your customers know you prize referrals, which you'll earn by providing excellent quality products and services.”
OK, maybe there’s no reason to be sheepish, but Silverstein loses a lot of credibility with this tip:
“When you begin working with a new customer, make referrals part of your initial agreement. ‘If I do a great job for you--and I will--you agree to give me X number of referrals.’ Chances are your customer will be impressed by your dedication and drive.”
I can’t think of a worse idea.
There may be an occasional client who responds positively to this approach, but most will be offended at the suggestion. After all, customers expect good service for their money, and they’ll bristle at having to pay extra for something they assume is already included.
Frey promotes “transaction-based referral systems,” in which referrals are solicited in a more passive yet potent manner by mail or e-mail. An essential characteristic to these systems is making it easy for the client to spread the word. (Remember: Your clients are typically as busy as you are; the more difficult is it for them to recommend your services, the less likely it is that they will do so.)
One of the great things about the information revolution has been the promotion of sharing—be it a favorite clip on YouTube, a fiery op-ed in the Times or a random thought on Twitter. It’s not that people didn’t share before; the difference is that digitized information is much easier to share than any other kind.than it is to call eight of your friends. In our case, people find it easier to use SAVETAXINDIA to get a few free quotes than to open the Yellow Pages and start dialing away.
In an age when more and more transactions occur via direct mail and the internet, it becomes easier and less invasive (not to mention less awkward) to create and implement a transaction-based referral system that does not require face-to-face interaction. What’s more, many people who use the internet use it precisely because it requires less interaction with insurance agents. (Sad but true.)
When it comes to generating referrals, there remains another significant barrier: a lack of incentives. While many of your clients don’t necessarily need a reward for spreading the good word, they’re much more likely to make spreading the word a priority when there’s something in it for them.
For example, to encourage the agents on our network to refer us to other agents, we offer a referral reward program, in which the referring agent gets a percentage of whatever the new agent spends with us.
Conclusion There is certainly a good argument to be made for the old-fashioned, face-to-face approach to getting referrals, but smart agents today realize that many people are more receptive to less invasive measures and will respond positively and with more vigor to incentives.
