Maximizing Referrals: How to Motivate Your Best Referral Sources

Submitted by: Linda McAleer, President, The Melior Group

Every business depends on a steady stream of referrals. Particularly in business-to-business settings, the power of a recommendation from a peer, business colleague or customer is unbeatable in terms of the confidence it conveys about your business’s abilities to serve its clients well.

Of course, you want to do everything possible to keep the referral faucet at full flow. How? Part of the answer lies in understanding how to motivate your referral sources. Friends, colleagues and clients want to help their friends, colleagues and vendors succeed. What can you do to make sure that when your sources are asked for an appropriate referral, your business is at the top of the list?

• Develop a list of referral sources. This might include current clients and customers; suppliers to your business; and even friends, family and neighboring businesses. Take advantage of opportunities to turn sometime competitors into partners; yesterday’s rival might very well be today’s collaborator.
• Ask your referral sources for help. It sounds elementary, but those you have identified might not know how important their help can be. In fact, your request comes with the implicit compliment that you think these people can make things happen for you.
• Be clear in making your request. Let your potential referral sources know what kinds of consumers or businesses are in your target markets. Let them know what to say to best position your business to a potential client. Tell them the exact steps you will take with a referral they make. Help them feel comfortable that you will treat their referral with utmost care. After all, they really have given you a gift.
• Ensure a positive experience for your referral source. When dealing with a referred customer, it is crucial to make your referral source look good. For example, Melior Group research conducted with primary care physicians shows that when they make a referral to a specialist, they want the process for their patient to reflect well on them. As such, they want their patient seen relatively quickly; and they want information back in a timely way so that they can intelligently discuss with their patient what the specialist found during the visit.
• Make sure that the referral process is easy for your referral source. Supply your referral sources with all of the things they might need to simplify the referral transaction; this might include handouts with your contact information or a brief sample of your marketing collateral. And, don’t require too much of your referral source. As in our healthcare research mentioned above, primary care physicians appreciate it when specialists arrange for insurance pre-certifications, and when they don’t require tons of background information before they will see the patient.
• Consider the correlation between customer satisfaction and the volume of referrals from existing customers. The Melior Group advocates including a referral metric as part of any overall client satisfaction measurement program. This can go the other way, too. One client, a financial services back-office processing firm, saw that its efforts to increase the number of referrals from existing customers not only achieved that goal, but also had the added benefit of boosting overall customer satisfaction.
• Keep your referral sources informed and updated. They will want to know what happened to the referral they made. It is up to you to let your referral source know that their referral was valuable — even if it does not necessarily result in business for you.
• Thank your referral sources. This may be the most important thing you can do. Acknowledge your appreciation — and let your referral sources know that you will be more than happy to reciprocate. Whatever form the thank you takes, be sure that it follows quickly.

Motivating your referral sources is essential to creating a good referral pipeline. And, focusing on a few key steps to achieve this will help develop your business and ensure continued success.

Linda McAleer is president of The Melior Group, a marketing research firm in Center City. Her insights on the importance of client referrals stem from 26 years of advising clients on strategic marketing planning and decision making.

For more information, contact Linda McAleer, The Melior Group, at (215) 545-0054 or lmcaleer@meliorgroup.com.

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