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Inside Dental Technology
August 2014
Volume 5, Issue 8

6 Ways to Generate Better Referrals

This low-cost business strategy can lead to big payoffs

Nick Azar

Regardless of the source, referrals can offer rich benefits and are, in effect, prequalified leads. Third-party recommendations and referrals are believable endorsements because potential clients see them as more objective and credible than paid advertising and promotional sources.

Financially, referrals are among the most profitable marketing strategies available. Generated at low or no cost, a single referral can produce thousands of dollars.

Referrals do, however, have a downside. First, considerable time and ongoing effort is necessary to develop a sustainable flow of referrals, and second, your network must be maintained and nurtured.

Constant contact with clients, contacts, and potential referral sources is also essential.

Sources of Referrals

Referrals can come from various sources. Here are a few:

People you know: They are your prospecting matchmakers. They can recommend you to the people whom you may not know but need to.

Family and friends: While sometimes these sources may pan out, realistically, family and friends are not ideal referrals. Despite the best of intentions, they may lack the objectivity to offer credible recommendations.

Your network of contacts: Included in this group are people you met through networking activities, suppliers, former colleagues, and noncompeting peers.

Satisfied clients: Satisfied clients are the best source of referrals. Just by choosing you, they have demonstrated that they like you and recognize your trustworthiness and competence.

Referral partners: Referral partners allow you to get more contact. Individually and collectively, your referral partners consist of a system that offers significant benefits. The most obvious of these benefits is the cross-referral of prospective clients. These partners should be at least as good at what they do as you are. In other words, they should satisfy their customers at least to your level of quality.

People you don’t know: Apart from ensuring that your public communications effectively showcase your best work, you may find it more difficult to proactively generate referrals from people you don’t know. Whenever possible, include your website as part of your introduction and profile.

Referral opportunities: Like networking, referral opportunities are spontaneous and abundant. To take better advantage of these, start by increasing your awareness of them. Look for situations that involve a discussion of someone who could benefit from your expertise and you could honestly say, “I can help that person. Will you connect us?”

Valuing Referral Sources

At the very least, every referral should be acknowledged and thanked by telephone, email, or postal mail. Depending on the nature of the referral and how lucrative the lead was, the acknowledgment might also take the form of a more tangible item. As is the case when selecting any business gift, match the value of the item with the immediate and long-term value of the referral.

Consider taking the recognition to a new level by providing a memorable experience. Invite your referral sources to join you in bird-watching, rock-climbing, cooking lessons, winetasting, or any other activity that helps them interact. In addition to enjoying a new experience, they will also meet people; these benefits will last longer than just another corporate gift.

Referral-System Guidelines

1. Base your system on creating win-win situations, in which everyone who participates in making a referral enjoys success. You score by attracting potentially ideal clients, prequalified by someone they trust and who also knows you. Referrers succeed by helping people they know, including you.

2. Identify your ideal referrals, but don’t limit your referral system to marketing and remain open to looking for and accepting referrals for potential suppliers, strategic partners, or anyone else who can help grow your business.

3. Tell sources your story of finding referral opportunities. This will help potential referrers increase their awareness of which circumstances might help you and then make appropriate referrals to you.

4. Limit your referrers’ promotional roles to discussing your likeability, trustworthiness, and competency only. Don’t expect them to sell for you, pitch your services, or gather any of the information that you will need.

5. In addition to following the above guidelines, timing is critical in generating referrals. Send frequent reminders that you welcome referrals, but not so frequent that you appear desperate. Limit your requests for referrals to three or four times a year.

6. Facilitate and acknowledge referrals. Whenever you receive a referral, regardless of the source, treat it as a high-priority lead and follow up as soon as possible. Also thank the referrer.

The Bottom Line

Asking for referrals is an ongoing process, which is essential for growing your business. As such, it should be an integral component of all your dealings with clients and contacts alike.

About the Author

Nick Azar is a consultant, business strategist, executive coach, and founder of Azar & Associates in Santa Clarita, CA.

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