How to Build a Referral Machine


Networking should be your Fastest Path to Revenue.

Just because most sales and business development professionals use networking, or referral marketing, as their primary source of new prospects, doesn’t make it an efficient or effective use of time.

If you analyze your network, you’ll probably see that 95% of your contacts have done nothing for you. By definition, this means that each time you meet someone new for a networking meeting there is a 95% probability that nothing will come of it. What solutions do you recommend to your customers and clients that have a 95% chance of nothing happening? I doubt that you would ever recommend a solution like that, yet every day professionals keep investing their valuable time networking.

The reason Networking is often referred to as a “farming” activity, is because, like farming, you plant a lot of seeds and you hope someday something will come of it. If you want to build a robust and growing referral-based business, that process is too slow, too inefficient, and too random.

The reality is that right now 3%-5% of your network is aware of a perfect opportunity for you, but you’ll never hear about it. But if you understand the real obstacles to referrals and know how to eliminate them, you’ll see that networking really can be your fastest path to revenue.

To build a referral machine, you first have to understand what problem you’re really trying to solve. There are four primary psychological obstacles that keep your contacts from making the referrals that they’re capable of, and when you remove those, the referrals will begin flowing.

* They’re just not thinking of you. Why should they be? They have their own goals to focus on and they can’t be worried about making you successful. Salespeople try to keep their contacts thinking about them by emailing them coffee requests to remind them that they’re still alive and send success stories showing how awesome they are at their job. Bothering them with reminders is not working the right end of the problem.

There are three things you can start doing immediately. First, recognize that most of the people in your network are not the best referral sources for you anyway, and there’s a very specific profile criteria that is optimal for you. You need to just focus on those people. The criteria is not as obvious as you might think. (Learn more in the article The Only People you really Need in your Network.)

The second thing you can do is to stop trying to teach people more about what you do. Understand the psychology of why it’s difficult for them to consciously see opportunities for you that are right in front of them and what you can do to help those opportunities jump out at them, even when they’re not thinking of you. (Learn more in the article Help your Network See More Opportunities to Refer You.)

Third, is to get your customers/clients seeing you through a different lens. They are a great referral source, but rarely will you get the referrals you should. The sales training wisdom says that the solution is simply that you don’t ask enough for referrals from your clients or anyone else. I’m sure you’ve been on the receiving end of that kind of request, and we all know how that makes people feel. It may get you a few more in the short run, but that’s one of the best ways to push people away from you. The real problem is that client relationships inherently fall into a well-define framework, and we must proactively re-define that framework before referrals will flow. All customer-vendor relationships are fundamentally created on an economic basis of you-do-what-you-promised-and-pay-you. You do it very well, and I will pay you with a smile. You do it extremely well, and I pay you with a bigger smile, but it’s still the same thing. There’s nothing in the client-vendor relationship that includes selling your products and services to their colleagues. You must do specific things to transcend that relationship framework, and you can learn more about that in the article, Why You Don’t Get the Customer Referrals You Should.

* They don’t realize that the opportunity is perfect for you. Ever hear someone try to explain to others what you do and the benefits you offer? How’d they do? Most people don’t really understand what you do and don’t know a perfect opportunity for you when they see it. To remedy this, you might fall into the trap of explaining what you do in even more detail, not realizing that more words just dilutes the messaging and understanding, and ultimately, bores your networking partners. They don’t want all that detail. There are just a small number of things they need to know to be more productive for you, but they don’t know what they are and don’t know how to ask for it. It’s your job to figure that out and give it to them, but you have to understand the psychology behind it. Learn more about how to help them in the article, Help your Network See More Opportunities to Refer You.

* They don’t want to take the Risk. What risk? Most people think others don’t refer because they’re worried if you don’t a good job, it will be a negative reflection upon them. That’s a 1% issue, and not the risk that holds them back. The 99% issue is that they are afraid that the person they refer you to will be offended and wonder why their friend sicced a salesperson on them. The solution is to provide a trusted advisor experience, and not a salesperson experience, and be seen as no-risk referral. There a number of things you have to do to make that happen, but that’s too a subject for this article. You can Learn more about becoming a no-risk referral in the article, Vendor to Trusted Advisor in Your First Meeting.

* They don’t know how to refer you, especially if the other person didn’t ask. If someone asks a contact of yours if they know who does what you do, they won’t hesitate to introduce you. But they don’t know how to introduce you to someone who might have a need but is not asking for a referral. There a number of strategies to address this problem.

First, you have to make it easy for your contact to link your offering to an unstated need that is hidden in the prospect’s words. That is also addressed in the article, Help your Network See More Opportunities to Refer You.

Second, create a trojan horse. A trojan horse is a simple offering that adds value that your referral partners are happy to promote, because it’s helpful to others, doesn’t require that someone asks, and doesn’t make them feel that they’re selling you. Learn more details in constructing a trojan horse in the article, Open More Doors Using a Trojan Horse.

Business development people just accept that over 90% of their network will never refer them and just keep on plugging away against those odds. Now you know the four obstacles above, so focus on solving those and your referrals will multiply.

Unfortunately, the solutions are not that obvious, and if it were easy, everyone would have figured it out already and stopped wasting 90% of their networking time. NonSelling’s Building a Referral Machine focuses entirely on removing these four obstacles to people referring you as much as they could. To learn more, sign up below for a series of complimentary videos that will explain how it works.

Related Articles
* The Only people you Really Need in your Network
* Help your Network See More Opportunities to Refer You
* Why You Don’t Get the Customer Referrals You Should
* Vendor to Trusted Advisor in Your First Meeting
* Open More Doors Using a Trojan Horse

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