Trustegrity Podcast Transcript

Trustegrity is an invitation-only membership community for entrepreneurs, for professionals and trust advisors dedicated to success.  Trustegrity provides a platform for networking, knowledge sharing and collaboration. 

Today I want to talk about some of the key reasons you want to have referrals in your business, and I know some people think, you know referrals they are really not for us, there are for some other kinds of businesses but in our business we don’t believe we need referrals or you know we can't get referrals, all kinds of excuses and really that’s what they are, they are just excuses.  I really can’t think of any business that could not benefit from referrals.

One of the primary reasons I think many businesses should think about referrals, especially in this economy, is the cost, you will find that referrals are probably one of the most cost-effective ways of building your business.  There are ways to get leads and prospects in any business but virtually all of them cost more money than referrals.  You can put an ad in a newspaper or in a magazine, you can go to trade shows, you can have a radio commercial, a TV commercial, there is all kinds of ways to get leads and prospects, virtually all of them will cost a lot more than referrals, so costs and reducing expenses is a great reason for wanting to build your business on referrals.

The next reason is that the cycle self-perpetuates, and what I mean by that is referrals lead to more business hence more referrals, so basically when you are getting referrals there is a great chance of you actually growing your business, getting new customers, new clients and you can expect those new clients also provide you referrals, so this self perpetuating cycle is a very important part of referrals and it definitely has a self-perpetuating aspect.

Now the other one is the quality of the leads that you get from referrals is much-much greater than an unqualified or a non qualified lead, so for example lets say you have a contact form on your website and somebody completes it, that they need your services, let’s say a web designer and somebody completes it that, you know they need help with their website, then you get that email confirmation of yes we want some help with our website so on and so forth, you send an email and they don’t respond to you or you call them and you can’t reach them, they don’t get back to you, they probably completed the form on ten other websites, they don’t have any loyalty to you, they don’t really care if you contact them, because they contacted so many other people that it doesn’t really matter, but if you actually get a referral from someone that knows you or somebody that had to uses your services or somebody that trusts you, likes you, etc, and they provide you with a referral that is a much-much better quality prospect.

And its been said that the closing rate for a qualified referral is about 60% versus a 10% closing rate for a non qualified lead, so there is a huge-huge difference, I mean you are talking about a 600% difference in terms of being able to close a new prospect if it comes through a referral as opposed to being a non qualified lead.  So keep that in mind, I know that you know getting website traffic is very important and getting people contacting you through your website is also very important, so I am not telling you not to do those things but I am simply comparing the quality of the leads that you can expect from an unqualified or non qualified lead versus a qualified prospect.

Now one thing that you really need to remember about referrals is that you really need to think about giving instead of just getting referrals because there will be those people that will give you referrals but you really need to, at the very least, thank them and you have to really show them appreciation and if you can return the favor and provide referrals for them, so let’s say there is an attorney in your network or an accountant or a consultant of some kind and they give you a referral to your web design business for example, you may not be able to return the favor for months, but that’s okay as long as you always keep in mind that you have this attorney, you have this accountant, you have this consultant in your network and just keep an eye out for that and whenever you can provide a referral for them.

What’s going to happen if you don’t reciprocate – they may not say anything to you! Most likely they will not say anything to you but people take note of that. People know that there are people they give and people that just want to take and you do not want to have a reputation of somebody who just takes and takes; and never gives. So whenever you can, give referrals and they would come back and help you.

When you think about referrals, always think about how can I give? How can I give somebody? How can I help somebody as opposed to how come I not getting referrals from XYZ? Why don’t they give me referrals? They don’t like me, they don’t care about me – It doesn’t work that way at all. You really need to think about how can I help this person or that person? How can I give them a referral? It’s OK if you cannot but you always want to keep an eye out and you want to help and you want to try to help, because people take a note of that.

So don’t be known as a “Give me, Give me, Give me!” type of a person. You really want to be known as a person that really gives and not someone that takes and takes and takes and never really reciprocates.

So just to reiterate some of the key points: that we talked about in terms of getting referrals and building your business on referrals to reduce expenses. It’s a lot less expensive than virtually any other way of getting the prospects for your business. Then remember the self-perpetuation aspect of it that the more referrals you get, the more business you will get, and also you will get more referrals and more prospects as a result of that. So it’s very important. Higher closing rates – Remember, when you try to close a prospect that is a qualified prospect, that you receive as a referral, you are going to have a much, much higher closing rate. Finally, remember to give. If you remember to give, you will receive. I can’t really prove this scientifically, but I’ve heard it over and over and I’ve experienced it in my own business that if you give, you will receive. Thank you for listening.

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