Does it surprise you to know that the #1 reason why people refer other people to a particular business is because of a great experience? For your sake, I hope that kind of “revelation” is NOT a surprise. Would you care to guess what is the #2 reason why people refer?
The #2 reason why people refer is because they want to guide others in making THE BEST decision. I didn’t say that they want to help out a friend. What I said was that they want to guide family, friends, co-workers, acquaintances, etc. – in making THE BEST decision. Emphasis on THE BEST. Therefore, it stands to reason that – to make THE BEST decision, necessitates that the person making the recommendation feels 100% comfortable with every aspect of that which is being referred (person, place or thing). Right? RIGHT!
When I say “100% comfortable” – what I mean is that THEY (the folks making the referrals) are the ones that have to be comfortable, NOT you! And therein lies a HUGE problem in business. The decision as to whether THEY are comfortable with YOU, is typically based on what YOU think and what YOU believe. And that – my friends, is completely WRONG. Not just a little WRONG. Way WRONG!
The sad fact is that most business owners don’t know the combination necessary to unlock referrals. That lack of knowledge becomes the catalyst to incentivize customers in the worst way possible; PRICE.
That’s right – they resort to deep discounts, monetary incentives, and freebies (all which live under the PRICE tree) to stimulate referrals. It’s a common practice in many different branches of business, thus going unquestioned. I am not “questioning” that practice; I am simply telling you that it is WRONG!
There’s so much guaranteed and probable fallout via utilization of a price model for stimulating referrals, that it amazes me how so many businesses just don’t see that they are like babies crawling around in a room covered – wall to wall in broken glass.
When you put a price on a referral, you CREATE a number of undesired definitions (quantitative and qualitative) specific to the worth of referring someone to your business.
For example, using a price model, you basically establish a reward system that gets people into a “points” mindset. At first thought, you might think “Hey, nothing wrong with that!” Okay. Are you prepared to accept the fact that a referral may not be made due to the fact that there is no direct reward? In other words, if my referral to your business cannot ABSOLUTELY be measured, then I risk – risk – risk not receiving a reward. Therefore, I am less likely to refer.
Even more important is the fact that the person who I refer to your business, who then becomes a customer, client, or patient, NOW KNOWS that I was incentivized to make the referral. In other words, the “paid” referral to your business becomes disingenuous – or at the very least, questionable.
While it is the entire experience with your business that stimulates referrals, one of the KEY elements that is often ignored is the COMMUNICATION of value. Please note how I did not say that the key was simply value, rather the COMMUNICATION of value. Value (the word) has many different forms, thus – leaving interpretation of what YOU believe to be the value of your product and/or service, is like saying the following to a woman and hoping that she GETS what you meant by your comment:
“Are you wearing THAT tonight?”
That comment could mean so many things – and could get you into A LOT of trouble. This brings me to another point, which is this; stimulating referrals – because people believe that sending business your way is THE BEST decision, is primarily a byproduct of solid communication. And solid (strategic) communication is more of a science than it is an art. The folks who will tell you that it is more art than it is science, are the same folks who want you to feel that it is something that cannot be learned. They are VERY WRONG.
Remember, you want your customers, clients, and patients to feel like referring others to your business, is without question, THE BEST decision. You don’t want hesitation. You don’t want them to even CONSIDER any red flags in sending people your way.
The POINT: Don’t forget about Reason #2!
Have A GREAT Day!
…Dr. Marc & The Mind Virus Team