I recently read Endless Referrals and it was a great book packed with lots of tips and tricks on how to make your networking events and connections more meaningful and profitable.
I have always wondered why referrals were so important. The book has a list of reasons WHY they are a piece of creating a successful business. I am paraphrasing below:
1. Referred prospects are easier to set appointments with. You have already over come one of the barriers with them. By getting a warm hand off, you will be more likely to be able to talk to them on the phone or meet them in person.
2. Price is less of an issue with referred prospects. Not only does the prospect know that they are buying a quality product or service, they have probably been told what it costs already.
3. Referred prospects are easier to close. People do what their friends do. It is why clothing becomes trendy and items so popular they can’t stay on the shelves. If someone they know and like has bought from you, they are more likely to as well.
4. A referral builds the loyalty of the person who gave you the referral. And if you show them appreciation, they will continue to be a loyal customer and provide referrals.
When you get a referral, make sure you learn about them. Do you think they will buy right away? In six months? Take notes and then track your sales. This will help you refine the type of referral you want to receive. You can also track where they are coming from. It is not necessary to pay a referral fee. However, I have found it is nice to give those who give you a referral a small gift, such as a Starbucks gift card or a box of chocolates.