Do you ever wonder who is worth seeking referrals from and who is not?
It is one of the questions I receive repeatedly.
To have a healthy referral generating plan that is actually producing results you need to have a base of referral sources – people who send you referrals.
But figuring out who those people should be can be tricky. Unfortunately (and fortunately because that would be weird), we don’t go walking around with “A+ referral source” and “C- referral source” signs attached to us. From our perspective…as we are looking to cultivate more referral sources…that would be awesome if everyone did.[After reading this article, check out the Stacey Brown Randall Live Show (Episode 1) where I do in more depth about how to increase your number of referral source.]
In fact, my research shows that only about 30% of a client base or 30% of the people you are closest to in your network are natural referral sources because they are natural connectors. You know the type – natural connectors are those who, when they meet you, start thinking about who they can connect you with. It is not always a potential new client but sometimes someone else that can help you grow your network. Natural connectors believe in the go-giver mentality…those that give, receive.
What does that mean for you?
When identifying who your referral sources are you can focus on cultivating two types of source…clients and a specific group within your network known as COIs – Centers of Influence. COIs are those who know what you do and come in contact with those who could use your services but since they don’t do what you do there is no conflict. You may focus on clients as referral sources more than COIs or the reverse of that – focusing more on COIs than clients. Or you may be a hybrid – generating referrals from a balanced mixed of both. Since many of my clients refer to me I receive most of my referrals from existing or past clients. But it wasn’t always that way – in the first two years I generated referrals from clients and COIs. There isn’t a right way or a wrong way when it comes to the type of referrals sources you will have, but you will need to identify who they are so you can create a plan to cultivate referrals.
Take Amanda – she is a personal injury attorney and focuses mostly only developing referral sources who are COIs and not clients which is done on purpose. With the type of work she does she knows that her clients will refer her if they know of anyone facing the same circumstances they faced when they first hired her. But Amanda believes in protecting the space of her clients and prefers to respect them by not focusing her referral generating plan on them.
But that left her with a need – if she wasn’t going to develop client-based referral sources she would have to focus on developing COIs as referral sources.
You may be in the same place with a need to focus mostly on developing COIs as referral sources. Or you may know eventually you will receive most of your referrals from clients but you need to first build up your client base or focus on upgrading your client experience so you can be more referable from clients which doesn’t happen overnight. So, in the meantime you know you need to focus on developing more referral sources who are COIs.
So how do you know who will be a good COI referral source?
Well, it takes work and a little trial and error. You’ll meet with some and feel like you really met someone who is genuine and you want to try to help because they were helpful to you. Or you’ll meet others and know almost instantly that they won’t make the cut (and you can’t get that hour back you spent over coffee). You won’t always pick the right ones, right away. But here are some tips to help you save some time and direct your efforts in the right direction.
To help you through this process and to keep the information all in one place please download the guide Increasing COI Referral Sources. Keeping this information in one document will help you as you work through process so you can refer back to it as needed and have everything in at your fingertips and in one place.
Identify who currently refers you business or makes connections to other professionals and business owners but who are not clients.
When I say identify I mean list out their names. You have to make a list. Think back further than a few months or even the last year. Think back to those who have helped you, connected you, referred you, introduced you or even just offered to go to a networking event with you. If you need help jogging your memory – look back at your calendar for meetings and events attended, scan emails sent, review your connections on LinkedIn or Facebook or even the membership list of organizations you belong to.
Sometimes you meet people and they become a viable connection or “force” in your network for a time period that eventually ends. That is normal if they moved, changed jobs or shifted their focus to other areas that don’t have cross-over with you. But don’t overlook those who should still be that “force” in your network but you haven’t kept in touch so the connection weakened as you drifted apart.
Then assess the people on the list.
What do they have in common? How did you meet them? How or when did you know they would be a good referral source? Was it after you helped them, after meeting a few times or allowing the relationship to develop because you see each other regularly at the meetings of a membership organization? Consider their industry, social circle, job title, strength of professional relationship with you, and how long you have known them.
Adding More COIs
Go one step further and think of others who should be referring you but currently aren’t.
You may think about specific people that you came across doing your identifying step above. They aren’t current referral sources but you would love for them to be. You may also come up with an ideal profile of a COI who could refer you. Meaning you think about those in specific industries or with specific roles that could be referral sources. For example, are realtors a good referral source for you? Or maybe business coaches, CPAs, business brokers, massage therapists, homebuilders, etc.? This is 100% dictated by your business. Most commercial bankers will focus on developing CPAs and attorneys as referral sources but an indirect link could be commercial real estate brokers. Think about indirect connections or membership organizations you know about or are a part of.
So, now you have identified current referral sources and reviewed what they have in common. And you have brainstormed who else – by name or role – could become a potential referral source. Here are some questions to ask with both of those lists in mind and can help you determine your course of action.
Questions to Ask
- When you identified your current referral sources – were you surprised by who was on the list and who wasn’t?
- What can you do to make better connections and strengthen the relationship with those who are on the list as current referral sources?
- Do you need more referral sources?
- What gaps do you see when you look at your list of current referral sources in comparison to the people or roles you came up with under the consideration step?
- Did you identify who – by role, company, industry – are the potential best types of COIs?
- Who do you currently know who fits the potential best type COI description?
You need to know your gaps to know where to focus to cultivate referral sources. Sometimes we won’t know if someone is worth cultivating as a referral source until we try. So, you have to try. Sometimes you’ll know right away – they send you people or make introductions after meeting you or the meeting was so awkward and painful you know they aren’t a good fit. I’m not advocating for 100 cups of coffee a month…but if you have gaps then you should work to fill those gaps. You won’t pick all the right people the first time…but keep looking for those perfect connectors. Because once you find them it will make all the difference in your business.
Don’t forget to download the guide Increasing COI Referral Sources. As you work through this process and start meeting with new potential COIs or re-connecting with past COIs, having one document to reference will be key to keeping you on track.