How to effectively follow-up on business referrals

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Businessman taking referral on mobile phoneFor most business owners, a prospective client that has been referred to them is gold dust.

Referrals from existing clients, peers or friends are a powerful endorsement of you. It shows that you are known, liked and trusted, and are a lot closer to winning the new business than any dealing with a prospect who has found you through another channel such as marketing.

In my work providing expert help to IT companies, I make many referrals (often between clients I work with) and a large number of introductions each day, typically between two individuals I think have common ground and would be good contacts for each other.

Last week one of my clients thanked me for a referral I’d made to him, and asked me the question “How should I best deal with this referral?”

With that in mind, here’s my performance management tip for dealing with referrals and introductions.

Respond to referrals in a timely fashion

If you’re fortunate enough that somebody thinks well enough of you or your work (or likely, both!) to refer or introduce somebody to you, above all else make sure you respond in a timely fashion.

If the referral is via e-mail, respond promptly to both the referrer (the person who is introducing you to somebody) and the referral (the person who you are being introduced to).

Thank the referrer for his or her kind introduction, and share your contact details. Next, ask them when it is a convenient time to call them to see if you’re able to help them.

Dropping the ball at this stage by not responding in a timely fashion could hurt your future relationship with both the referrer and the referral. Don’t drop the ball!

Thank-You for the Referral

If somebody has taken the time to refer somebody to you, you should thank them. This seems like common sense and obvious good manners, I know – but in the excitement of potential new business it can be easy for any of us to overlook.

Regardless of where the referral ends up, I like to drop a thank-you e-mail and often, a handwritten thank-you card or note in the post to let the referrer know I appreciate them thinking of me.

Keeping the referrer in the loop

After your initial e-mail which included both the referrer and referral, again politely thank the referrer for the connection and let them know you’ll continue the conversation with the referral one-on-one. Nobody likes their e-mail inbox flooded with someone else’s conversation!

However, at key stages in developing the relationship with the referral (meeting, post-meeting, closed-business, or deciding you’re not a good fit) keep the referrer notified – I find people like to be kept informed of the progress made from introductions they’ve made.

Don’t assume referred business will be won!

Take the conversation with the referral forward, treating them as you do with any other prospect – professionally and with respect. While a referral is typically much more likely to do business with you, don’t make assumptions!

Not winning business from a referral

Sometimes referrals or introductions are made with the best of intentions, but upon exploring the relationship with a referral, it turns out you’re not a good fit to work together.

Perhaps your rates are higher than the referral has budgeted for, or in some cases, you may not provide the service that the referral actually wanted (and here’s a good opportunity to go back to your referrer and help him or her understand what you do a bit better).

But if the referral doesn’t result in business, remember that you’ve still got a chance to demonstrate your value to the referral here, value that will almost certainly be echoed from the referral to the referrer.

Help the referral find someone else who might be able to help them (and create a new referral!) or point them in the direction of further research that might help them – a web-page or a blog-post they will find useful. Offer to stay in touch in case you’re able to help down the road – while you may not be able to work with them right now, you’d be surprised at the number of call-backs you get six months or more down the line when the situation has changed for the referral and you *are* a good fit to work together.

Conclusion

We all love referrals. They are friendly introductions from people we’re very likely to do business with, and a warm endorsement of our services from others.

But if you don’t treat the referral with respect, or forget to communicate and thank the referrer, these mistakes can quickly mean a valuable source of referrals drying up.

P.S – I love referrals too – so if you enjoy reading this blog, and think another IT company would enjoy reading it to, please let them know about Tubblog. Smile

photo credit: RealEstateClientReferrals via photo pin cc

Comments

  • Richard Tubb2012-09-06 16:01:44

    Craig - good point. You're not just representing yourself, but the referrer as well! BTW - If you need to know my favourite Vodka, I'd be happy to share. ;-)

  • Craig Sharp2012-09-06 10:24:03

    Richard, this is so important, especially as most SME's get a good portion of their business via referral. It's so important to act within 24hours and service the opportunity as professionally as possible. This not only creates a good impression for your company, but also for the person who provided the referral. Lets not forget, the referral provider has stuck their neck out to offer you as a good company that can help their client. If you fail to contact, fail to follow up and fail to act then the referral company is going to look unprofessional and more importantly, you'll never get another referral from them again. I always offer my profound thanks to anyone who offers me a 'Hot Lead' or better still a 'Sure Thing' which most well crafted referrals turn out to be, as the giver has done most of the hard work. I always keep them in the loop on the progress of the referral and always ask if there is anything I can get them as a thank you. The responses to this latter point have ranged from "nothing thank you" through to "there is the very specific Vodka that I like" !

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