This article is an excerpt from the report “Building Your Client Base Through Referrals” – available for free download at www.lighthousebc.co.uk/referrals

Referrals Work. “Referrals from Colleagues” and “Referrals from Other Service Providers” were identified as the #1 and #2 method used by buyers of professional services to identify and learn more about providers in the 2009 RainToday.com Benchmarking Study “How Clients Buy”.

But in practice, few of us get enough high quality referrals. This article focuses on how to increase the number of referrals you and your firm receive. The full report covers how to ensure that these referrals are high quality and are likely to result in sales.

For many professionals, the quickest way to get more referrals is simply to ask for more. Although almost all professionals say they ask for referrals, studies¹ repeatedly show that over half of all customers claim they have never been asked. Those that do recall being asked often cite confusion over what they were being asked for – seeing the request as a suggestion or even a throwaway sentence.

The reality is that a great many professionals feel reticent about asking for referrals. They don’t want to be seen as a “pushy salesman” and they don’t want to risk endangering their current client relationship by asking for too much.

And they’re right to be wary. Asking for referrals too soon, in the wrong way, can result in a client feeling “used” by the professional.

Some of their reticence however, is driven instead by a fear of rejection. Few professionals enter their field because they are excited by the prospect of selling. In many professions – law and accountancy in particular – the early training and career development of professionals focuses almost exclusively on the technical aspects of their role and rarely provides adequate preparation for the inevitable transition into business development the professional must make as they rise in seniority. They are rarely equipped with the skills, and most importantly with the thick skin needed to face up to the prospect of rejection inevitably faced in selling situations. And asking for referrals is no different – there will be some clients who say no. However, gentle coaching can usually give professionals the courage they need to significantly increase the amount of referral requests they make. Challenging their assumptions and highlighting that the rejection is not of them as a human being can be helpful. And sometimes simply asking them if they would object to a someone who had provided a great service to them asking them for names of people who would also benefit, is enough to help them get a realistic grip of the level of risk involved.

Having said that, there are ways of minimising the risk to the relationship and maximising the chances of getting a referral.

Timing the Referral
The first of these is timing. Asking for a referral just after you’ve confirmed a sale is often recommended to product salespeople. But for a professional service firm it simply doesn’t work. Before they can feel confident giving a referral, the client must know that you can do a good job and that they can trust you. Giving a referral involves quite a high degree of risk to the client. If you let down the person they referred you to, their reputation will suffer. And the better the referral (to close colleagues and friends who place great trust in them) the higher the risk. Referrals must be earned by exceptional performance. Only after you have proven your capabilities can you ask for a referral and expect to be given names of people where they have the strong relationships you are looking for.

One valuable tactic to increase the number of these high value referrals is the concept of “Superpleasing” introduced by David Maister in Managing The Professional Service Firm. Maister highlights how professional firms are quite willing to invest thousands of non-billable partner hours into low ROI marketing activities; yet rarely consider investing partner time into “going the extra mile” for existing clients on current engagements. Maister is not talking here about marketing and relationship building activities with current clients. He’s talking about investing senior time, unbilled, into ensuring that current engagements overdeliver and “superplease” the client. He rightly points out that exceeding expectations on project work has far more impact on clients than any amount of relationship building meetings or hospitality. Yet most firms cut themselves off from this option by strictly segmenting project work – which must be done using billable hours – from relationship work – which is non-billable, but not allowed to support the project work. We’re not talking here about spending unbilled hours to do the basic delivery of the project. Instead, it’s a strategic investment of non-billable time to elevate an engagement from “meets expectations” to “exceeds expectations” in order to generate more future business.

The same principle applies to referrals. Deliberately investing non-billable time in overachievement of key projects for clients with a high potential to refer good business can really pay off. Again, timing is crucial – ask for the referral after “superpleasing” the client and they will be highly likely to reciprocate.

Preparing the Client for the Referral
In addition to timing the request for a referral for when you have overdelivered on your work, the number of referrals you get can be increased by preparing the client in advance.

At its most basic level this means avoiding surprising the client with a referral request and putting them on the spot for names without giving them time to think about it. Instead, treat the referral request as a two-stage process. Initially, ask the client about how they feel the engagement or service has gone and what aspects were particularly valuable to them. Then ask them if it would be OK to meet at a later date where you could discuss together who they know who could also benefit from a similar service. Then by specifying the type of person or business you would like to be referred to you give them time to think and to come to the meeting prepared with an initial list of names. You can also set expectations: “Typically most of my clients are able to come up with about 5 or 6 names of people who they think could really benefit from working with us”.

At a more strategic level, subtly reminding the client at key moments throughout your relationship that you are a “referral based business” can ensure that your request for referrals is not a surprise. It also activates their “antenna” so that they can be looking out for potential referrals for you over time.

Professionals who “warm up” their clients in this way, and who time their referral requests for when the client is feeling the most gratitude and satisfaction with their work can gain a minimum of 2 – 3 times the number of referrals to those who simply ask (and simply asking is more than most professionals do).

¹Cited in Paul McCord, Creating a Million Dollar a Year Sales Income Through Client Referrals.