How to Get Clients From Referral Leads

Some time ago a friend asked me about a thorny finance question.

It didn’t take me long to realize I wasn’t the best person to help him. So I referred him to my accountant who I know has deep expertise in the area of his query. And could provide him with the help he needed.

I’m sharing this story because this is what a true referral lead looks like. I wasn’t trying to send business to my accountant. I was trying to help my friend as best I could. And the fact that my accountant benefited was incidental to me trying to help my friend.

In this article we’ll look at why referrals are one of the easiest ways to grow your business. And explore how to make referral leads a regular occurrence.

referral leads

Why Referral Leads Are So Effective

Referrals are, hands down, your number one source of leads – especially when you’re first starting out. This is because they close better than any other type of business.

Why do they convert so well?

You probably already know the answer. It’s because of inherent trust. 

We only ask people we trust for help. And since we trust their advice any referrals they make are automatically considered viable solutions.

Annex Cloud did some research on the impact referrals have on our purchasing decisions. They found that 92% of us trust referrals. And we are FOUR TIMES more likely to make purchases recommended by a friend or family member.

That’s massive!!

Their findings are confirmed by Nielsen audience research. Nielson found that 83% – 84% of consumers fully trust recommendations made by friends and family, ahead of any type of advertising.

But that’s not all!

While only 30% –  33% of people trust online ads, 90% of consumers trust peer recommendations. And 66% say that online reviews and commentary are a trusted source of information. In fact, up to 70% of buyers use online reviews to assist with their purchase decisions. 

So recommendations and reviews from others can’t be discounted.

On a personal note, I’ve had new clients specifically reference some of our positive reviews as part of the reason they wanted Sales Higher to take over their lead prospecting. And many past clients came to us via their friend networks.

So I know it works.

The question is, how do we create a standardized customer referral program to connect with these amazing potential customers consistently?

Successful Referrals Come From Satisfied Customers 

Okay, there’s no getting around this part.

To get lead referrals you need happy customers. Only satisfied customers will recommend your services to their friends.

When it comes to referrals, the role of trust is paramount. I don’t want to recommend a solution to my friends if I’m not 100% confident they’ll have an amazing experience. And you probably feel the same.

So the first step to getting new business from referral leads is to emphasize customer outcomes. When you make a positive impact on your clients’ business they’ll be thrilled to recommend you to their friends.

To create a positive experience you’ve got to deliver results that are well outside their expectations. If you can do that your satisfied customers will go out of their way to send business in your direction.

Start By NOT Asking For Referrals

Sadly, random referrals don’t happen every day. If they did, I could retire!

So how do we create referral leads that drive potential customers our way?

Well, the first step to getting referrals is to ask for them (shocking, I know!).

However, the trick isn’t to ask for referrals.

Huh? A bit contradictory there!

Don’t ask for a referral. Instead, ask whether they would feel comfortable referring you to their network. It’s a small, but significant detail. 

You are asking about their comfort level, nothing else.

This step is key because it does two things. And both are a win for you!

  • Asking whether they’re comfortable giving referrals plants the idea. They might have some solid ideas off the top of their head. If not they’ll start thinking about it and keeping their eyes open.
  • More importantly, they might say, “no” they’re not comfortable providing referrals at this point. If that happens, you’ve uncovered some VERY important information. Now you have an opening to find out what you can do to deliver the value they expect. It’s a lot easier to fix problems when you are aware they exist. Remember, referral leads can only exist in an environment of trust. If they have specific needs that aren’t being met, you’ll have a hard time getting their buy-in.

 

Use Open-Ended Questions To Request Lead Referrals 

The biggest mistake people make when asking for referrals is using closed-ended questions.

Consider this typical request format:

Do you know anyone who needs [my services]?

Of course they don’t!

If they had someone in mind they would have mentioned it already. The best they can respond is, “No, but I’ll be sure to recommend you if someone comes to mind.”

You’ll get better results by asking specific questions that can’t be answered with a simple “yes” or
“no”. This will help your advocates understand who you want to meet. 

For example,

Who do you know that runs their own business?

Notice that this isn’t a Yes/No question.

They might know several business owners so take note of all of them. 

Probe further. Ask questions that reflect the exact profile you want to meet.

Oh, what do they sell? Do they sell to other businesses?

Open-ended questions will help your customers think of the perfect people for your business. And when they meet new people who match your ideal criteria they’ll recognize them as such.

Make Lead Referral Requests A Habit 

Asking for help once is great. But try to make it a habit.

Your happy customers may be OK referring you to their friends. But it’s not like you’re top of mind all the time.

The reality is, people forget things. And if you want to get successful referrals, you’ll need to remind people about who you want to meet.

By checking in from time to time you’re strengthening the image of who you want to meet in their heads. And they may have met the perfect person since the last time you spoke.

Advocates Aren’t Partners – Know The Difference

I recently saw a request for assistance on Facebook. The poster needed to speak with someone with my EXACT background and expertise.

My first thought was, “Oh, I have to help this person.”

They finished the post by offering a $10 Amazon voucher for anyone that would meet with them to help.

My interest in their project went from 100% to 0%, instantly.

But why?

At first, the situation was framed as me helping someone whom I’m uniquely qualified to assist. Of course I wanted to help!

When they offered me money I became a consultant getting paid $10 an hour. No thanks!

I’m sure the poster meant well. But it’s important to understand that people will help you for different reasons. And offering incentives isn’t always the best way forward.

So differentiate between advocates and business partners. And know how to work with each.

Your Customer Referral Program 

Your first source of referral leads is your satisfied customers.

Your fans will help you because they want to help both you and the person they’re sending your way.

In other words, they win by contributing to both of your successes. They feel good about having helped two friends connect. And who doesn’t like to play match-maker, right?

Avoid offering your fans direct compensation unless they ask for it.

They’re helping you because they want to be helpful. When you offer incentives to your true fans for introductions you run the risk of turning enthusiasm into a transaction.

So compensation needs to be handled with a bit of delicacy.

Instead, show your appreciation AFTER receiving a successful referral. For example you could say, “I really appreciate you connecting me with (ie) Fred. I asked our billing team to waive your fees next month.

This way they get a financial outcome, without feeling like that was their primary motivation. 

Best of all, now they’ll be even more excited to send business your way next time.

Building Your Lead Referral Program 

Think back to the last time you gave a GENUINE referral. It’s been a while, hasn’t it? That’s because most of us don’t get lots of opportunities to recommend someone in a natural way.  

So if you want to go beyond adhok customer referrals, you’ll need to be intentional about crafting your lead referral program.

What CAN They Do?

Everyone is capable of making a referral. But the quality of that referral will vary depending on the source. 

For example, a website designer is uniquely qualified to refer new business to a marketing agency.

But someone in a different industry would have difficulty doing the same.

Start creating your lead referral program by thinking about where your contacts and your solutions intersect.

To get the help you need, you have to meet people where they are ABLE to help you.

In the example above, a marketing company could get a large number of unqualified leads by asking everyone they know for introductions to business owners in their network.

Or they could get a smaller number of qualified leads by only approaching web designers they know.

Your starting spot will have a big impact on the quality of your leads so give this point a lot of consideration.

How To Scale Unqualified Referral Leads 

By now you’ve identified WHO is in a position to help you.

And you also know HOW you want them to assist you.

So there are two sticky points remaining. 

First, is why should they bother? Are you relying on friendship? Or will you offer incentives to your network?

 And second, how are you going to create enough scale that this is worth your while? Referrals are AMAZING when they’re organic. But closing rates are much lower when you are trying to create a lead referral program that’s not dependent on organic word of mouth.

If you’re looking to meet people that aren’t necessarily ‘in market’ for your solution then using Sales Navigator is a fantastic way to meet people who match your ideal client profile.

referral leads from 2nd degree connection

Just input your ideal prospects into Sales Navigator and look at the results. You’ll notice that you share mutual contacts with your 2nd degree connections (which is why they are 2 degrees from you). 

Your first-degree connection is listed beside your ideal prospect. So reach out to them and ask about their relationship. Does your first degree contact know them well?

You’ll find that most people are happy to make an introduction, even if it’s just pairing “loose connections”. I mean, why not, right?!

Building relationships this way is a somewhat organic approach. And the ‘relationship’ element makes prospects more likely to hear you than they otherwise would.

How to Scale Qualified Lead Referral Sources 

If you want to scale your qualified leads by referral, you’re going to have to be very deliberate about how your lead referral program fits into your sales prospecting plan

It’s not enough to wait for the occasional hot lead to come in. You’ll need to build an entire network of people who are actively sending prospects your way.

Sounds good! But if it was easy, we’d all be living on a yacht.

To make this sort of partner marketing strategy work you need to make your solution PART of their own solution. Otherwise your campaign is unlikely to succeed.

Here’s the mistake I frequently see happen.

Company A has similar customers as Company B. So they ask Company B to refer their customers in exchange for a commission.

It sounds like a win-win, and it should work. At least in theory.

We’ve run several cold email campaigns that follow this pattern. Some are massive successes. But not as many as you would expect. Here are some common reasons this type of campaign flounders:

  • Company B cares about their customer relationship. They aren’t going to refer to a company they don’t know.
  • Company B wants to stay focused on their clients’ priorities. Discussions about external solutions don’t fit into existing workflows.
  • Company B isn’t in the business of sending customers to Company A. They have enough on their plate as it is.
  • The amount being offered doesn’t begin to compensate for all the hassle the referral could potentially entail.
  • And Company B may already have a business partner they’re working with in this capacity.

As you can see, it’s not as easy to tap into and build a referral network as you might think.

To establish those all-important partnerships your solution needs to fit with their workflow in a natural way.

For example, in theory a web design company could potentially refer customers to a digital marketing agency. But digital marketing solutions aren’t included in the scope of their work. So they don’t have a reason to organically introduce your services.

Conversely, web designers HAVE to set their clients up with a web hosting solution. The website won’t work without some form of web hosting. And most of the time clients will just accept whatever recommendation the web designer makes. So in this case it would be easy and natural for a web design company to partner with a hosting company. There’s a natural symbiosis! 

If you can find ways for other companies to naturally integrate your solutions into their own, you’re golden. Especially if there are lots of those companies!

What Are Your Best Practices For A Lead Referral Program?

How about you? What tips would you recommend to set up an effective lead referral program?

I’d love to hear what you do differently and why. You can message me on Linkedin or send me a message on our contact page.

Look forward to hearing from you!

 

Want More Client Meetings?

 

Here’s the exact process we used to generate over 4000 B2B sales leads

 

 

Matthew Murray

Matthew Murray

Matthew Murray is the Managing Director of Sales Higher. He knows any company can THRIVE with enough qualified sales leads. So he’s spent the last decade helping companies meet engaged prospects and win new deals.

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