In this series we have already examined if you should ask for referrals, when clients provide referrals and how clients feel about referrals. All this time we keep talking about a referral – a third party, unknown to us. Let’s use some business terminology and call them a “prospect” and consider how these prospects themselves feel about referrals?
Prospects have a strong preference for a referral introduction
For a prospect, a referral is an opportunity – an introduction to someone who may or may not be able to help them. But is this opportunity relevant or even wanted?
Let’s consider all the possible methods for a prospect to find their Professional Services Adviser. A prospect could attend a seminar of yours, find you with a Google search, see your name on an advertisement, look in the Yellow pages, see you speak at a conference, read an article you have written in a magazine or hear your name on the radio. Alternatively they could be referred to you by an existing client or referral partner of yours. What’s the best method from the prospects point of view?
Let’s begin by considering the facts. Price & Associates (2006) surveyed high-net-worth financial services clients and found that 66% prefer a referral from a client or referral partner as the best method of finding their adviser. Rainmaker.com (2008) surveyed buyers of Professional Services – who spend a combined $1.7bn pa on professional service advice – and found that the top two methods they used to identify suppliers were a referral from an existing client (79% of all buyers) or a referral from a referral partner (75% of all buyers).
Prospects seek independent information about you
So, the facts suggest that referrals are by FAR the #1 preferred method for a prospect to find you. Does this make sense in reality? It does because like all buyers of products or services, prospects seek out independent information about you. However, unlike product suppliers, Professional Services Advisers have very little independent information to offer clients. There are no magazine reviews, little industry benchmarking and few ways for prospects to “kick the tyres”.
In fact, the only source of independent information about you…is from your clients. All the other methods outlined above which a prospect could use to find you rely on information provided by yourself – advertising, promotion or propaganda. Only a referral offers independent verification of your abilities.
Referral Foundation #4: Prospects prefer referral introductions above all other forms of marketing
So, if around 75% of your potential future clients would prefer to find you via a referral, how does this compare to your current marketing efforts? Are you spending an appropriate amount of your time, energy and effort on making it easier for clients and partners to refer you? Or are you focusing on other marketing techniques that are not the preferred methods for your prospects?
If you were even remotely concerned about how the prospect feels in the referral process, you are probably worrying too much! You still need to have a professional approach to meeting referred prospects, but you can rest assured that the vast majority of those prospects will not respond unfavourably to your contact.
However, if referrals do not constitute a major part of your marketing plans, you may well be making it harder for your future clients to find and engage you. And remember that a referral process is much more than a scripted referral discussion. A referral process is just like your sales or retention processes and involves materials and co-ordinated steps to make referrals easier for both yourself and your clients.