You don’t need to be Marvin Bower to grasp the value of client referrals for a consulting practice.
But even though consultants understand the value of referrals as a business development tool, the reality is that referrals aren’t living up to their potential.
Recent research sheds some light on the reason. In a study by Hinge Marketing, researchers reported that 57% of services buyers are very likely to recommend their consultants to other prospective clients, but 85% didn’t because they weren’t asked.
According to a different study, 83% of clients are willing to refer business to others, but only 29% actually do.
Are we missing the boat here, or what?
Here’s the problem I see: the traditional advice on how to get more referrals makes the overly-simplified assumption that all you have to do is ask, and the client will hand you a great referral on a silver platter.
Researchers reported that 57% of services buyers are very likely to recommend their consultants to other prospective clients, but 85% didn’t because they weren’t asked.
The truth is that you’ve got work to do before you can ask for (and receive) a referral worth having.
The First Hurdle
Think about it. When you request a referral, you’re asking clients to put their reputations on the line for you. Your client has to contact a colleague (or give you the contact information), explain why that person should talk to you, and offer an endorsement (hopefully glowing) of your capabilities. It’s asking a lot.
That’s one reason a lot of consultants would rather fly in a middle seat in coach next to screaming babies than ask for a referral.
Often, the biggest obstacle to getting referrals is in your own head. For every reason why you should ask for a referral, you can probably find other reasons not to. If you’re hesitant to ask, remember that your clients expect it and most are willing to help.
When to Ask for a Referral
For referrals from consulting clients much of the standard advice doesn’t apply.
For instance, some people suggest that the best time to ask for a referral is right after you’ve made the sale. That’s when your client feels good about you and about the work ahead. It’s easy to tee up a polite request for a referral. So why not ask?
For one thing, you could be putting your client between the proverbial rock and a hard place. At that point, your client may be clueless about whether your work justifies a referral.
And if the client does agree to provide a referral, it will probably be of limited value. If your client declines (or defers your request), you’ve turned an exciting, positive time into a cringe-worthy moment.
When you ask for a referral too early in the relationship, clients feel like they’re talking to that person at the party who’s continually scanning the room for the next person they want to talk to. It’s no secret that person’s real priority is to land the next conversation (client).
Ask for referrals when you’re certain the answer will be an enthusiastic, informed yes. To get there, first you have to earn it. Be patient, do amazing work, and build a track record of success that makes the request for a referral a no-brainer.
When you ask for a referral too early in the relationship, clients feel like they’re talking to that person at the party who’s continually scanning the room for the next person they want to talk to.
Quality, Not Quantity
Getting client referrals isn’t a numbers game. You don’t need a lot of referrals to grow your business–just the right ones.
Here’s what I mean. A high-quality referral isn’t simply an endorsement of your business. Anyone can tell a colleague that you’re great at what you do.
The referral that really stands out (and will lead to a substantive conversation with a new client) is specific about what you do, highlights the value of your services, and explains why you’re the right person to help in a range of situations.
Before your clients can convey all that, you have to arm them with knowledge of your business–beyond what they know about your current project. To provide a useful referral, they need at least a rudimentary understanding of your service offer, background, and your value to the market.
That knowledge, by the way, can also be a big help as you expand the relationship with your client. The more your clients know about the scope of your service offerings, the easier it is to uncover new opportunities for follow-on work.
I know. No one wants to put their clients through a workshop on their service offer to prepare them for making a referral. Still, you need a way for clients to see the extent of what you do.
The simplest way for clients to learn about your business is through osmosis. As your projects progress and when it’s relevant to a discussion, reference other work you’ve done and other services you’ve provided.
The simplest way for clients to learn about your business is through osmosis.
Don’t be pushy, but help clients learn about other parts of your business in the context of your ongoing work.
Remember, though, that your clients are less interested in your business than in their own. So they may need multiple exposures to information about your various capabilities before it sticks.
Plus, keep it easy to understand. No need to drag a client through your 47-step methodology for improving the customer experience. It’s enough for them to know that’s one of the services you offer.
Who Gives the Best Referrals?
Before you ask for a referral, be sure you’re approaching the right person. Does your client know others who are likely to become your clients at some point in the future?
To improve the quality of a referral, make it clear what type of clients you want to work with, what situations you are particularly well suited for, and the best message to send when the person is making the referral.
Once you establish the relationship, educate your clients about what you do and clarify your target client and message, you’ll get referrals that work for you. And, when the time comes again, you’ll feel confident about popping the referral question.