Gain prospects and clients through referrals
This blog post was created from Everything Business Consulting podcast episode 68, The most powerful method to get clients - A guide to getting Referrals. To view the episode page, click here.
What is a referral?
A referral is an act of referring someone or something for consultation review or further action. In a business consulting context, a consultant does such a perfect, fantastic job with their client that either one of two things happens.
Firsty, they voluntairly give you referrals, “You need to go and talk to my brother, Jim”, or “there’s a guy down the road that I met at the business association meeting”. You do such a good job that they willingly give you referrals because people want to help people and you just get them offered to you.
And the second part to that is it puts you in a very good position to be able to ask them at the appropriate time, ask them “now that you know what I do, do you have any friends, colleagues or any businesses that you know, that would make very good use of my services”, “you know what I do, you know what we do together, and how it all works and everything. Do you have somebody who you think needs my help?”
Why is a referral so powerful?
“Nothing influences people more than a recommendation from a trusted friend.” - Mark Zuckerberg
Referral marketing is the single most effective way that we can do marketing as a business consultant (once you’re established) and it’s a must have for any business to business, or even business to consumer companies, both B2B and B2C. It is a seal of approvaly, a big tick, a yes that this product or service is really, really good. Word of mouth is the primary factor behind 20 - 50 % of purchasing decisions.
How does this relate to business consulting?
From a consultant’s perspective, a referral is money in the bank. Business consulting is a newish industry, for example, everyone knows what an accountant does, what a lawyer does, only a handful of people know what a business consultant does, so if you get a referral, it’s a guarantee that you’re going to get that prospect as a client.
A consultant, or someone in a similar industry, business to business companies with referrals have a 70% higher conversion rate, and they also report a 69% faster closing time on sales. It is a powerful tool to be able to get more sales, get more clients, and being able to close them faster, simply because someone referred them to use you.
Why do we want a referral?
It’s a gold medal on your chest, been given to you by another client to say you’re doing good, you can be trusted, you know what you’re talking about, you have an immense amount of knowledge, and you do what you say you can do. Once established as a consultant, referrals really start to flow to you, and that’s where you can really grow as a consultant. And customers who are referred to your brand or service are up to give times more likely to use you than another customer.
From a referral, the leads you recieve are very high quality. Why’s that? The person who’s referred them have an insight into what you do as a consultant, they know the service you offer. They also have an idea of the referee, the person they’ve referred. They might know that their business isn’t in a good situation, or they want to grow it, or they want to take it to the next level, what ever it is.
For more information on generating leads, listen to episode 48 of Everything Business Consulting.
Another reason why we want referrals is they have been referred by someone they know, and most likely trust. They trust that this referral is going to be of high quality and that it will work out for both parties, ending in a positive situation.
Referrals convert to sales, and give a better end result for bother the referee and the consultant. For the consultant, generating leads through referrals is a free way to gain extra business and a free way of marketing, but the value is extremely high compared to other lead generation paths. In terms of different methods, referrals are at the bottom of the scale in terms of price, but at the top of the scale in terms of value, because of the likelihood of them being converted to a client.
How do we get referrals?
Some referrals come organically from your own clients first, but in most cases you’re going need to ask them to give you them. To do this, wait for the right moment, not during a consulting session, but during the one-to-one meeting with the business owner, you can talk to them about it at the end.
ConsultX Founder David suggests saying that you’re trying to build your business, or that you want to build your business, and then go into the question of asking whether they know anybody. If you have a strong relationship with your client, you could ask them to make a phone call to make a time for you to see them. About 75% of the time, the client will do that for you.
Where can we get a referrals list?
Referrals don’t have to come from a direct client, there are heaps of places and other people in both your personal and professional life that can create these referrals for you.
Friends and family
Your immediate network can help leverage their relationships to help you. Hold a launch party, with some drinks and nibbles, and let your people know what you are doing and give them a five minute elevator pitch, then ask them if they know anybody who could use the sort of service you provide.
ConsultX Partner, Julius Bloem shared a video via social media (Facebook on a personal level and LinkedIn on a more professional level) when he first started consulting. It was a minute and a half or two minutes long, a bit funny, but told them exactly what he did. His own network then shared the post around, got some engagement, and got quite a few referrals from a brief video.
Colleagues
Another place we can look for referrals is your colleagues, so at your place of previous employment or a business you previously ran. You’ll approach them individually, and in a similar way you would approach family and friends, by letting them know you’re a business consultant and this is what I do. Then ask, who do they know who needs assistance with their business?
Networking groups
One more place you can get referrals from is networking groups. You might belong to one which has 150 businesses attend the meetings, each of those businesses could be connected to 10-20 businesses, you’re easily looking at a room with the potential to get in touch with thousands of business if you play your cards right.
They could have a list of business in the area, collect those business cards. You could be giving a speech and at the end simply ask the crowd if they know anybody that would use the services that you provide, that could lead to two or three people speaking to you afterwards.
Once you’ve met people there, you can leverage being in the same networking group as them, saying hi, it’s David here from the Executive Alliance, we met the other day. You go straight through tot he owner and get that appointment straight away.
Specifically set up groups for referrals
The final plave we would look for referrals is to specifically set up relationships and a group for referrals. David Thexton, ConsultX Founder has done this before by getting together roundabout 15 people to build a profressional services group, a lawyer, an accountant, a buisness broker, a sign writer, a website guru ecterta. You’d then organise a monthly meeting with them to give each other referrals.
You might have a client who is looking at rebranding and needs a designer, sign writer and website guru so you can refer them to people in your network. The accountant could have a client who’s business is leaking too much profit, and they would refer them to you. It would take some time to set up, but once it is set up, it is an easy avenue for referrals to nuture and convert to clients.
Using the same strategy, you could have a one-on-one relationships with people from the different professional services. For example a one-on-one relationship with an accountant or a banker, which you can swap referrals for.
Once the ball is rolling
Referrals are power, high quality leads that comes from all directions once you’re established as a business consultant. They have a seal of approval from someone the lead already has a relationship with, and their trust is then partically transferred to you. People who are referred to you are up to five times more likely to use your product or service than customer who weren’t, so get established and put what you do out there!