| Win New Clients By Establishing An Effective System For Referrals |
| Invention Development Advice - Marketing | |||
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It's no surprise to anyone that referrals can be the most profitable and effective source of new clients for professional service firms. Yet in truth, few of us generate enough high quality referrals to reach our business growth objectives.
It's no surprise to anyone that referrals can be the most profitable and effective source of new clients for professional service firms. Yet in truth, few of us generate enough high quality referrals to reach our business growth objectives. What's the problem here? Are we mistaken in our assumption that referrals are such an effective business development method? Or is it an execution issue - we're simply not going about it in the right way? For most service firms there are elements of truth in both sides. Our clients really do prefer to use referrals to find out about and select new suppliers. But not all referrals are created equal. Unfortunately, some referrals can be little better than getting a random name and number. When we contact the person it turns out they don't really see a need for our services, they don't really know or trust the referrer, and they don't have the budget to hire us anyway. Our challenge is to work with our clients and partners to get the high quality referralswe need to stand a good chance of them turning in to new business. So Do Referrals Really Work? When Raintoday magazine surveyed over 200 buyers of professional services they identified "Referrals from Colleagues" as the #1 method they preferred to use to learn more about new service providers. Close behind in #2 position was "Referrals from Other Service Providers". Buyers of professional services need to answer two key questions when hiring a new firm: "Can the provider do the job?" and "Can I work with them?". How do they answer these questions? They either use their own personal experience with the firm - or they take the opinions and recommendations of people they know and trust: their colleagues and other service providers they've worked closely with. For infrequent or "distress" purchases (for example, many legal and consulting services) - services bought because of an immediate or unexpected need; the reliance on trusted third parties increases. Buyers won't invest in building a relationship up front with a provider of services they don't know they'll ever need - so instead, they rely heavily on the opinions of those they trust with experience themselves. So do referrals really work? Absolutely yes - if done correctly. You've Got to Have a System In his classic work Creating Rainmakers, Ford Harding highlights that although successful business developers are very diverse in terms of background, personality, style and approach - they all share one common factor: they all have a "system" for generating business. That system may be hugely different between Rainmakers, with one relying on networking, another on cold calling, another on writing and speaking. But all had developed a method which worked for them which they could employ repeatedly and effectively without having to think from scratch of what to do. When needed, they were able to "switch on" their system and carry out the steps which would bring them more business. In contrast, less effective business developers either tried to "wing it", or had to spend so much time reinventing a system - gathering contact details, developing a script, identifying networking meetings, or writing an article - that the opportunity was lost. It's the same with referrals. Although we all know how powerful referrals can be, how many of us take a systematic approach to generating them? No professional firm worth it's salt would dream of investing significant time and money into a normal marketing campaign without fully researching it and planning it in detail. Yet when it comes to referrals - potentially the most powerful approach of all - most firms simply leave it to chance. At best, referrals will be lauded as "our best source of new clients" and staff asked to try to get more. But there's almost never any thought put in to who to ask for a referral, what to ask for, how to ask, and how to earn recommendations. These firms are hoping that their good work will result in positive word of mouth and spontaneous referrals. Sadly, research by TARP in the US has highlighted that referrals simply don't happen spontaneously. When it comes to dissatisfaction: * An unhappy customer will tell their bad experience to an average of 12 other people (more now we're all netwokring online) * Each of those 12 people will in turn mention it to 6 others. Unfortunately, when t comes to satisfied customers, the picture is less rosy. * A happy customer will share their experience with only a few friends; * Those friends will not remember much and will not share that information with anyone at all. Essentially, without further pro-active work from the service provider, positive "word of mouth" ends with a few friends and colleagues of the satisfied customer. So professionals and their firms who want to get more from referrals need to get serious in their approach. They need to develop and implement a plan to pro-actively address all the key elements which influence both the number and the quality of referrals received. Upcoming articles will explore these elements in detail. More information: Ian Brodie helps lawyers, accountants, consultants and other professionals to Get Clients and win more business. Go to Ian's site for more articles on Marketing Professional Services.
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