Why most businesses don't win enough referrals

Complacency and assumption are two of the biggest challenges to any successful referrals strategy. We become complacent that our happy clients will refer us, as will the people in our referral networks. We assume that those people who are closest to us understand what we do and are able to recognise opportunities.

Very often neither are the case.

Few businesses enjoy the benefit of the majority of their customers referring them on a regular basis. We are far more likely to share bad news than good and are unlikely to go the extra mile to refer suppliers unless we have received extraordinary service, even when we are asked.

It is also too easy to assume that the people around us understand our business as well as we do. Clients may only experience one of the range of services we offer, while friends, family and even colleagues often only know the job title or general area of work. If you want people to refer you, they need to understand much more than that.

I ran an exercise recently with a group with whom I have been working for a few months. The group consists of people from two firms and they have been meeting together on a regular basis. I asked everyone to take a couple of minutes to write down what the other people in the group do, who they do it for and who they would most want to meet.

Where people had been working together with their opposite number every month they had a good understanding of that person’s business, portfolio and their needs. Unsurprisingly, where they hadn’t been working directly with someone from the other firm, they really struggled to describe their responsibilities.

Those results were quite predictable. What was very interesting was to see how well each of the attendees coped when asked to describe what their colleagues, from different parts of their own firm, did and who they needed to meet. A lot of the group struggled even with this task.

This wasn’t unique. Very often we assume that the people we work alongside day to day understand what we do and are looking out for opportunities for us. This isn’t the case for many companies. So much effort is spent looking for referrals and introductions from clients and intermediaries, while ignoring the most obvious sources of such support, people working for the same firm.

Guard against complacency and don’t expect people around you to refer you without some effort on your part. Spend time building relationships and winning their trust. Once they want to refer you don’t assume that they know who to introduce you to and how to make the introduction, take time to help them understand who needs your help, how you can help them and how they can best put you in touch.

A successful referrals strategy requires  you to be proactive and make things happen. Complacency and assumption are the product of sitting back and waiting.