A 100% referral business

Executive Summary

In this 1,500 word article, Paul shares a story of a colleague who runs his business on the basis of 100% referrals. Referrals are the king of client acquisition methods and perfectly suit the modern consumer. Paul takes you though how you can make your business a 100% referral business.

A 100% referral business

It was proudly displayed on my friend’s business card, email signature and his headed paper. It said “we grow our business by personal referrals so we can spend more time with you”

Now that’s what I call being upfront.  I spoke with him about his business model and he did grow his business exclusively from referrals.  He ran a 100% referral marketing model and it fits perfectly the modern consumer, who is so much more in charge of the process nowadays.

In previous decades, prospecting, advertising, cold calling have all worked.  But not now. The world has changed and customers will contact us when they have a need, not the other way around.  In fact, customers don’t really need us anymore for many purchases and the secret is to provide added value from you.

So where does a referral business fit?  Because when customers have a need for you and your solution, they will take two actions to solve their need.  They’ll take care of it themselves via Google or find an expert who can. Secondly, they’ll ask their network of friends, colleagues, family, whether they know of anyone they trust.

Now you can wait for this natural chain of events to feed you new business, and this may be sufficient for you.  But most of us need more new business than relying on the natural course of events which is where a referral strategy comes in.

And my friend has mastered the art.  So how does he do it?  Let’s dissect his strategy and model it for ourselves.

Inner game

My friend has got over the issue of potentially being rejected.  He tells me that when he first started thinking about a referral only business model, the fear of rejection reared its ugly head.

Asking customers for a referral might give you a no, you might get turned down.  It was this potential refusal that could have got in the way of him asking.  But he mastered his inner game and no longer had the fear of being too pushy.

Referral planning

He plans to achieve referrals and like having sales targets other metrics, he aims to achieve certain number of referrals per week.  He measures referrals achieved and referral appointments.

The old adage – what gets measured, gets done.  And it works too. Referrals become an essential business metric

Promoting referrals – sowing the seed

Many salespeople ask for referrals, after all, we all know that it’s important.  But most salespeople ask too late and do so very apologetically.

My friend advertises on his business card that he grows his business through personal referrals. He’s upfront about it and introducers the concept to his customers when he first meets them.  He uses words which sow the seed with the customer that growing his business with referrals means he doesn’t spend unnecessary time marketing, so he can spend more time with his customers.  Logical benefit.

He also mentioned that he only asks for people they know, after he’s delivered the very best service he can.  Again a beautiful benefit, after all, any customer would love to receive the very best service. He also mentioned that he’s focused on this service now and will get back to them later on.

“David, as you know I grow my business with referrals from delighted clients… that way I can concentrate my efforts on servicing my clients not marketing all the time. So, if its OK with you, I’m going to ask for some referrals from your network of people who would benefit from the value I provided.

But I’m not going to do it now, I’m going to give you a fantastic service first and provide you with some real value, and then I’ll ask.”

So when he does ask the customer for a referral, it’s not a surprise.  Clever.

So the secret is to sow the seed with your customer right up front.

Closing for referrals

Looking at the majority of salespeople when they ask for referrals reveals that a big problem is not asking in the right way.  Most people can ask, it’s not a difficult process, but most settle for a name and then make a call to the name.

Now this isn’t far off a cold call.  If you think about it, you’re interrupting them with the call, and yes, mentioning their associate’s name might warm a little, but it’s not that different to a cold call and may get the same result.

No, my friend follows a distinct process because he’s seeking an introduction not a referral.  He wants the new person delivered to him on a plate.  Here’s how he does it.

Firstly he recalls the conversation they had when the business relationship started, the one which mentioned that he grows his business from referrals, preferring to give them as much value as possible. Then he asks about the value and lets his customer describe the value they’ve received.

Now when the customer is bathed in the glory of his value, he asks who they might know who would also benefit from exactly the same value. Here he begins to describe his ideal customer to jolt the memory of his customer.  He gives them time to think it through, and tells me that this is much easier because he sowed the seed earlier and this gives the customer more thinking time.  Sometimes he needs to stimulate the memory more.

“Mike, if we were to swap jobs right now, who would be the first 3 people you’d call?”

When names start flowing, he asks his best question of the moment. “If you were Brian, how would you like to be contacted and introduced?”

At this point, the offer to formally introduce him is made.  Sometimes they phone their referral and say you’ll be calling, occasionally he gets a letter of introduction which is quite a nice touch, or an email is shot off to the new customer.  These create the introduction.

Referral nirvana

Occasionally he gets his customer to phone the referral and say

“You simply must phone Paul now, see him as soon as you can, do exactly what he advises, and pay him what he charges.”

That’s referral nirvana.

Leveraging your LinkedIn contacts

We’ve all heard of the 6 degrees of separation.  A phrase that means that everyone in the world is connected to you by a maximum of 6 people. So the people you know, know someone else, who knows so and so who knows Barack Obama.

Sound in principle but what about in practice?

Use LinkedIn to do this.  LinkedIn demographics fro July 2011 show member just short of 7 million in the UK alone, with over 50 million in the United States and over 26 million in Europe

At the beginning of 2011, LinkedIn has over 4 million UK members and 60 million worldwide. It’s the grown up version of Facebook. Let me show you how you can an introduction to your prospect which will make phoning to fix an appointment, a certainty.

Firstly start using LinkedIn, unless you already have, start linking up with your current connections and building your contact base.

Go through your database of clients and connections and systematically invite them to link in.  Then the fun starts

LinkedIn has a powerful feature where you key in the person you want to make contact with and it tells you who, in your network, is already linked in to them. Then you use LinkedIn to ask your connection if they would make an introduction to the person you’re targeting. And once you have an introduction, your call becomes so much easier.

Here’s a real example of how I used LinkedIn recently to get an appointment with a Sales Director who I knew was experiencing a Trigger event.

I could’ve called him up, chances are though I wouldn’t have got through, and if I did, I may not have been successful in securing an appointment. And I didn’t even know his name.

Someone on my contacts knew him, I arranged for an introduction, and contacted him the following day as a referral. So much easier, guarantees a foot in the door.

LinkedIn advanced search

This feature is incredibly useful and provides an automated prospecting list every week.

You need to navigate to LinkedIn’s Advanced Search


Once there you can key in the type of prospect you’re targeting. Include their industry if you’ve been astute to segment your market.  Company size, location, title.

Determine how close they should be to your connections.

For example I only ask for 1st connections, this means that whoever LinkedIn throws up is connected to one of my 465 contacts somewhere.  That way I can fix up an introduction.

Once you’ve sent the request, you can ask LinkedIn to send you weekly updates of new people, those that have changed roles etc.

There you have your automated prospect provider service. Neat.

Your next steps

So have you convinced yourself to start a 100% referral business?  It really does fit the model of the modern consumer.  The world has changed, customers continue to evolve, they want to be more in control and being referred suits them. Generation X’s becoming a major market (born 1965 to 1980) for you with their in built anti salesperson heat seeking missiles.  They will not tolerate cold calling, full-stop, period.