referral suction

8/12/2019 Referral Suction

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Issue 4 - May 2010

Published by: Michael Silk, Michael Silk Consulting,2 The Compasses, Leigh, Nr, Tonbridge, Kent. TN11 8HT. ENGLAND

T. (UK) +44 (0)1892 871446 W. www.MichaelSilkConsulting.com E. [email protected]

2012 MichaelSilkConsulting.com 1of 22

THE SILK REPORTWarrio r Marketing , Sell ing & Fee-Generation Strategies For

Freelancers, Independ ent Consultan ts, Coaches & Info -Marketers...

Referral Suction: How To Attract QualityLeads... Without Spending A Penny On

Advertising...

From: Michael Silk.

Dear Reader,

Leverage!

Thats what Im all about.

And I suggest you are also, especially when it comes to the marketing of your business.

So in this report I'm going to pull back the curtain on how to leverage off your existingcontacts... to...

Trigger A Consistent Influx Of Referral Leads

Into Your Business

Im guessing you dont need selling on the idea that referrals are extremely important to

your business, do you?

After all, just about everyone in business knows a referral lead costs less to acquire than a

cold lead, via, say, conventional advertising.

Thats marketing 101, right?

Yes it is. But what you may not (yet) appreciate is just how much of a positive impact

referrals can have on your business... as well as...


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Your Entire Life

A true story to illustrate my point:

Listen, in Brisbane (Australia) there is a dentist called Dr. Paddi Lund who used to work like

a maniac at his dental practice -- putting in 60-hours per week.

That was the input. The outputwas Dr. Paddi Lund made about the average yearly salary for

a workaholic dentist.

More: He was tired, stressed, burnt out, and extremely unhappy.

So he decided to do something drastic and revolutionary.

He Fired All His Patients

Well okay, not exactlyfiredthem.

But what he did do was increase his prices, and...

Made It A Mandatory Condition

Of Anyone Who Wanted To Be A

Patient To Refer Other Quality

Patients To Him

And this new rule also went for existing patients who wanted to continuebeing a patient.

Question:

Would you care to guess what happened after Dr. Paddi Lund re-engineered his business

into a referral only operation?

Answer:

The way I heard it Dr. Paddi Lund now only works about 22-hours a week (about 1/3of what

he worked before) and his annual salary is over 3-TIMESthe average dentists salary.

And as far as I know, Dr. Paddi Lund is (and has been for some time now)...

The Highest Paid Dentist In Australia

As well as the most chilled-out.

End of story.

Okay, now weve set the stage forjust how much of a positive impact referrals can have on a

business -- (virtually any kind of business) -- lets you and I explore some...


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Systematic Referral Generating Strategies YouCan

Begin Implementing In YourBusiness

By the way, notice in the above sub-head how Ive underlined the wordsystematic.

Why have I done this?

The reason is so: It has been my observation most business owners that attempt to generate

referral leads do so in a very haphazard way.

No good.

What you need (what you must have) is asystematic processin place.

Now, you dont have to be as militantabout it as Dr. Paddi Lund.

You can still accept business from other sources (apart from referrals)... but... it isa good idea(especially during sluggish economic times) to have some kind of systematic referral

marketing process in place.

But how?

Well, let me paint a picture of a typical scenariothat often plays out when someone tries to

get referral(s)... and then... contrast itwith a basic, yet well-thought-out, systematic approach

to stimulating referrals.

Okay, what most business people do to get referrals is do whatever work theyve been hired

to perform... and then... only after the client has given their approval does the business person

summon up the courage to ask for a referral.

Most dont even ask they merely hint!

This, of course, often creates an all-round awkward situation in the client / business person

dynamic... and... more often than not...

Results In Zero Referrals

Or, at best, a few unqualified referrals (otherwise known as names).

Lets switch gears. Lets say, for arguments sake, youre a business consultant.

And lets say youre in the process of talking with a qualified prospect that is making all the

right noises about wanting to hire you.

Well, its at thisstage in the relationship (before a prospect has become a client) that I

suggest you set down your rules of business communicating your expectationthat all

clients you take on will refer other quality prospects to you.

Heres a quick example of how that conversation could go:


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###

BUSINESS CONSULTANT:Mr. Prospect, I would be happy to work with you and help

you achieve your goal of XXX. However, I do have a condition you must agree to before I take

you on as a client...

PROSPECT:Oh, whats that?

BUSINESS CONSULTANT: When I have done everything Ive said I will do on this call...

including A, B and C... and... assuming I satisfy your expectations... you will agree to give me

the name and contact details of X number of quality referralsbased upon the criteria I will

share with you -- can you foresee a problem with that?

PROSPECT:Uh, no. I cant see that being a problem.

###

Hardly anyone will see it as a problem.

Why would they? After all, if you look at the above phraseology of the business consultant

youll notice its communicating4very important things:

1). It communicatesthat the business person (in this case a business consultant) has heard

and more importantly understoodwhat is required by the prospect.

2). It communicatesthat the business person doesnt just take on anyoneas a client.

Money alone is notenough. You must agree to refer in order to qualify.

3). It communicatesthat the business person in ultraconfident he/she can meet and

satisfy the prospects expectationswithout overtly saying so (which would be

perceived as a sales move). This, of course, inspires confidence in the mind of the

prospectmaking them much more likely to want to become a client.

And...

4). It communicatesright from the get-go...

The Authorative Stance & Leadership QualitiesOf The Business Person

Of course, throughout working with a client you must continually remindthem of their

agreement to give you X number quality referrals. And make sure you educateyour client on

what a good quality referral lead would look like.

Plus, its a good idea to set aside a special referral only meeting at the end of your contract

(or at a pre-agreed upon date) where you will sit down (or talk on the telephone, if its a long-

distance relationship) with your client for the sole purpose of gathering the referrals.

What next?


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Next, I suggest you have a referral getting letter (prepared in advance by you)... that...

would be sent out (preferably from your client) to all those people your client has given you as

quality referrals.

The purpose of this letter?

To Introduce You And Your Services To

The Referrals, Of Course

Sounds like a fairly straightforward approach, doesnt it?

And it is.But it would be my educated opinion that...

90% Of Consultants & Coaches Dont Do

Even 10% Of What Ive Just Described

And that is whyin the vast majority of casesmost consultants and coaches never get thevolume of quality referrals they should rightfully be getting for their business.

In all truthfulness, if you just set down the expectation youll be asking for referrals at the

outset of every new client relationshipand follow-through with a referral collecting

meeting and a referral getting letter -- youll start getting more quality referrals than 90% of

your competition.

But you know what?

Im not happy giving you referral marketing strategies that will put you ahead of 90% of your

competition.

Uh, uh.

What I want to do throughout the restof this strategy report (if its okay with you) is give you

referral marketing strategies that will put you w-a-yahead of a full 99.9% of your competition.

Would that be okay with you?

If so, lets now turn ourattention to some advanced referral generating strategies. Referral

marketing strategies that can...

Quickly Flush Out Quality Referrals From

Your Existing Contacts

Lets get to it.

OK, thefirst advanced referral marketing strategy we are going to dive into is something I

like to refer to as the tempting testimonial technique.

Youll understand why I refer (no pun intended!) to it as the tempting testimonial technique

as you read about the strategy below. Heres what you do:


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Lets say youve just done a fantastic job for a client. And because the client is so enamoured

with the way you conducted business and the results youve produced for him, he (at your

request!) rifles off a glowing testimonial to youexpounding upon your wonderfulness and

the benefits hes got from working with you, etc., etc.

Of course, being the smart marketer you are... you set about show casing that glowingtestimonial in all your marketing promotions, (you doalready do that, dont you?).

But guess what?

Because you are reading this strategy report you will now know how to squeeze every last

drop of profit potential out of every testimonial you receive from here on out.

Look, because you will have gotten the client to also give you referral leadsin the manner I

have outlined aboveyou will now (from hereon forward) usethe glowing testimonial when

contacting those referrals.

How?

Like this: You write a short introduction letter to those referral leads -- (on behalf of the

client who supplied you them) -- and if you can swing it, you have the client agree to have that

letter printed on their letterhead paper and sent to their referral leads.

So, why do I call this the testimonial temptation technique? Because you use the clients

testimonial (which does your selling legwork for you) as the juicy bait in your letter to...

Tempt A Referral Lead

To Initiate Contact With

You

To illustrate: A real life example of the testimonial temptation technique referral generating

letter follows:


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Can you nowsee the beauty of this strategy?

Once again, youre using the testimonial to very subtly tempt each referral lead to chase

you down for the solution you providetheres no heavy handed sales pitch or bragging

involved in the letter. The only real selling component of the letter comes in the form of the

clients testimonial... whom the referral lead will...

AlreadyKnow, Like And Trust

Which are all factors that give you a leg up with the unknown-to-you referral lead.

A couple of other things I feel it is important to point out about that letter. Firstly, look at the

second PS. It lets the recipient of the letter (the referral lead) know that your client (whom the

referral lead obviously knows) will probably give them a call within the next few days to see

what their experience is with the business person being referred (which, in the above letter is

me).

Why put that second PS into the letter?

Think about it: it lets the referral lead know theyd better act on the letter sooner rather than

later... because... their friend / associate / colleague / family member...

Will Likely Be Contacting Them Very Soon To

See How Things Went

And its going to be a teensy bit embarrassing if theyve got nothing to report when a

friend / associate / colleague / family member gets in contact with them, isnt it?

Remember: People will often go out of their way to get the approval of other peopleand do

very little to directly benefit themselves!

OK, the second thing I want to point out about that letter is it offers as a first point of

contact with the person being referred (me) a free, no obligation 45-minute cash flow

generation analysis.

Why?

Simply because its a very good idea to enticea referral lead to initiate contact with you (ortake your call)...

By Offering Them Something Of Value

It could be a free consultation(which I choose to call a free cash flow generation

analysis)... or... perhaps a free evaluation... or... perhaps...

A free report- which will outline a solution to a pressing problem likely experienced by

the referral lead, as well as, demonstrate that...


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You Are The Obvious Expert To Call If The Referral Lead

Wants Their Problem Taken Care Of For Them

Do you want to see a real life example of what a referral generating letteroffering a free

reportlooks like?

Aha. Thought so.

Check it out:


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By the way, anotheradvantage of using a free report(or free audio CDof you being

interviewed on your area of expertise) as your give away in your referral generating letters is

The Referral Lead Has A Very Non-Threatening

(And Anonymous) Way To Become More Familiar With

Who You Are And What You Can Do For Them

In other words, they dont have to pick up the phone to initiate contact with you and run the

risk of being on the receiving end of a pushy salespitch thats going to make them

uncomfortable.

Okay, moving on.

It should go without saying but, if you have a client or associate that refers you business you

need to reward that client in some fashion.

To be fair, most smart business people do offer some kind of reward or recognition ofappreciation to those people who have referred business.

And if you dont already you muststartrewarding people who refer you business. You can

do so with a simple handwritten thank you note, complimentary theatre tickets, complimentary

dinner tickets, a bottle of good wine, and so on and so forth. In fact, just about anything can be

offered as a referral reward as long as it will be appreciatedby the person who referred you the

business.

Know this: More people in the world are starved of appreciation than they are of food.

And know this also: If you show your appreciation to a person who has referred you business

(whether of not that referral turns into a paying client)...

That Person Is Then 3-TIMES More Likely To Continue

To Refer You Business In The Future

Something to think about, isnt it?

Another referral reward -- assuming your industry doesnt frown upon it... is...

A Referral Fee

This simply means you offer, say, anywhere from 10% to 25% (of what the referred client

pays you) to the person who referred the new client.

You get the idea.

Pretty standard practice, right?

Possibly so. But what most definitely isntstandard practice is making the referral fee the

unique selling position (U.S.P)of your business.

Huh? How do you do this?


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Simple: You just let everyone know upfront (in all your marketing, advertising and other

communications) that...

You Give ClientsA 100% RefundEven When They

Are EcstaticWith The Service You Provide

What!?

Let me explain:

When a prospect enquires about your services you let them know that you will expectthem to

refer business to you if they become a client. All as I described before.

However, this time you also let them know about your 100% refundpolicy. And the way

it works is like this: when a client refers you one new paying client you will refund (or pay

as a referral fee) 25%of the fee they paid. If they refer two new clients youll refund50%of the fee they paid. Three new clients youll refund 75% of the fee they paid. And if they

refer just four new paying clients...

Youll RefundThem 100% Of The Fee

They Paid

In other words, if they refer just 4 new clients to youthey will have got your service...for

free.

Now, you may want to make the refund 20% for each new client. In other words, the client

would need to refer 5 new clients in order to get a 100% refund.

Also, for obvious reasons, I recommend you put a time-limit boundary on this 100% refund

policy for referralsI suggest either 3 months or 6 months, and no more than 12-months.

In any case, this strategy of offering a 100% refund on your service (as a referral fee) can

very often turn into the deciding factor for a prospect mulling over the idea of becoming a

paying client.

Furthermore, the 100% refund strategy will often...

Turn Into A GameYour Clients Will Try

To Win

Where winning is giving you 4 (or 5) referrals so they can claw back the 100% refund

before the time-limit is up.

Something else interesting (and favourable to you) if you decide to incorporate this 100%

refund referral generating strategy into your business: when a new client comes on board by

way of referralthat client will often alreadyunderstand the game... and therefore...


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Will Often Have Referrals Already Lined Up To

Give You Immediately He/She Signs-Up As A

Paying Client

Which is exactly what you want them to dobecause you only pay the refund (referral fee)

after the new client has paid you.

Get it? Im sure you do. So lets move onto another referral generating strategy that can be

extremely powerful.

Listen, as Im sure youd agree, its one thingsayingyoull reward a person with a referral

fee if their referral lead turns into a paying client (anyone can say that, cant they?) but...

Its Another Thing Altogether

When You Prove It Up Front

By Send A Referral Fee

In Advance

And you do it like so:


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Or like so:


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Anyway, the beauty of this cheque in advance referral generating strategy is two-fold:

1). You are physically putting the referral fee right under the recipients nose (which,

from a psychological standpoint, is very hard for the recipient to throw away or

ignore)... and...

2). A cheque has a built-in life span of 6-months (so it creates an impending deadline

for the recipient to refer you businessi.e., in order to deposit the cheque)

For obvious reasons, you should onlyuse this advance payment of referral fee strategy

with people you have a close connection with and whom you can trust not to be deposit the

cheque before you give them the nod.

Lets move on.

Heres another powerful referral generating strategy. Its called:

The Endorsed Referral Strategy

Whats this?

Basically, you get a business owner that serves the same client profile as you to send out a

mailing -- (preferably written by you on behalf of the other business owner) -- to their clients.

For example: If you were a business consultant, it could be a good idea to get an accountant

to send out a letter to their accounting clients endorsing your services. And, if a fee-paying

client comes on board as a result of that endorsementa referral fee (or joint venture fee)

would be paid to the business owner (i.e., the accountant) that endorsed you.

Frankly, with the right business endorsing you, its not uncommon for an endorsed mailing to

produce a 30% response, or more(which sure beats a 1%- 2% response youd typically get

from a cold mailing where no pre-existing relationship exists).

Want to know how to easily recruit businesses to endorse you?

Heres a novel idea: Pay them for every letter they mail out endorsing your business. Ive

heard a how-to author does this (when he has a new book to promote). He approaches

centres of influence in his field (that already have a mailing list of the profile of people whowould be hot for his book) and agrees to pay them a dollar for every letter they mail out to

their subscriber / customer base.

The author makes plenty of book sales (and profit) from this arrangement. And guess what

else? The book he sells is his front-end product. And so, the author up-sells the book buyers

to his higher priced information products...

And Makes Even MoreProfit!

Smart. Very smart!

Want more?


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OK, you got it.

Here is a quick run-down of a number of other referral marketing strategies that should hot

wire your brain with ideas you can translate over toyourparticular business:

Referral Discount Fee Strategy:When a potential client asks how much your services are --

reply with: Do you want the full service charge or the discount referral charge?

When the prospective client responds with: Whats that?

You reply: You can pay the full fee of X but, if you agree to refer 3 (or however many)

people to my business within the next 3 monthsyou are eligible for the discounted fee of X

which one would you prefer to go with?

Free Upgrade With Referrals:Theres a company that puts on a free marketing seminar to

local business owners. At the end of that free seminar he would tell the audience that he wasputting on another free seminar the following week which would cover a really hot marketing

topic. The seminar speaker tells the audience the cost of the next hot topic seminar is X but,

the audience members can upgrade and attend the seminar for free I Fthey bring two other

business owners with them. I heard his seminar audience grew from roughly 30 to 90 business

owners in a week.

And Id bet hes generated a lot of fee paying clients from those seminars.

Something to think about! Something to think about!

You Go First Referral Strategy:Sometimes all you need to do to stimulate referrals is go

first. Like so: You say to a business associate something like: Hey John, I sometimes feel

guilty Im not referring people I know to your business. So I was wondering. If Istart referring

people to you; would you also start referringpeople to me?

No harm in asking!

The Thank You Letter Referral Generator:Im not 100% sure but, I think I invented this

one. I wrote a direct mail package for a client selling an info-product on how to market an

information product online. As part of the direct mail package, I wrote a thank you letter that

was designed to go out to the customer with each product order. The letter thanked thecustomer for their purchase... reassuredthem theyd made a wise purchasing decision...

remindedthem of the benefits theyd soon be enjoying from the product... and then...

Offered Them A FREE Telephone Consultation With

ME On Advanced Marketing Strategies They Could Use To

Promote An Info-Product Online

Can you replicate this referral generating strategy? You bet you can! Hardly anybusiness

ever (not ever!) sends a thank you letter to their customers / clients immediately after a

purchase. So, why dont you write a letter for them that will a)bond them with their

customer / client b)reduce their level of refunds... and... of course... c)give their customers /clients a reason to contact you!


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professionals to use... and most importantly... an opportunity to give (and receive) referrals

from.

Do hope you can help. Remember all youve got to do is list 10 (or more) additional service

professionals to the list I have started (and enclosed along with this letter).

Please let me know if youve got any questions --Idbe glad to fully explain the referral

network club concept to you over the phone.

Warmly,

(Your Name)

PS.So we can all start benefitingfrom the new referral network club as soon as possible

it would be greatly appreciated if you could get your completed sheet back to me before (date).

PPS.If you do not wish to be an invited member of this new referral network club and benefitfrom the referral business it will give you, no problem. Just let me know and Ill remove your

name and business from the membership listing.

###

Or something like that.

What you want to happen as quickly as possible-- as you can see from the example letter

above -- is for all the initial service professionals you list to come back to you with other

service professionals added to the list.

In other words...

You Want To Fill Up Your Referral Network Club

Dance CardTo 100 (Or More) Listings

After all, the power of this concept is in the number of service professionals that can refer

business your way.

OK, so far, so good.

But what next?

Simple: you send aslightly amended versionof the letter above to all the new service

professionals that get added to the list by your initial contacts. And so on and so forth. So the

membership list of the referral network club...

Grows... And Grows... And Grows!

And, as the self-appointed leader of the referral network club (or whatever name you

decide to call it) you stay in regular contact with all the member service professionals. And you

do so by sending each member an updated (and hopefully growing) list of service professionalsthey can give referral leads toand receive referral leads from.


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I recommend you send out an update list every monthand do so consistently. Consistency

is the key here.

Is that all you do?

Its up to you. But I say: that is the very leastyou do.

If youre smart you will provide each service professional on your list with a number of other

membership perks.

For example, you could send each service professional (along with the monthly updated

membership listing) some kind of pertinent information that will... oh I dont know... how

about...

Show Those Service Professionals How To

Get Even MoreClients For TheirBusiness

But how do you show a service professional how to get more clients (and hence more

revenue) for their business?

A particularly good way is by offering actionable marketing advice via a monthly printed

newsletter.

But hang on a minute.

What if, you yourself, dont feel qualified to be offering marketing advice? And, what if, you

yourself dont want to do all the grunt work each month to produce a here-how-to-do-it

marketing newsletter?

Hmm?

I know. I got an idea.

Why not record a telephone interview with one of the member service professionals each

month on their area of expertise and then...

Make That Expert Of The Month CD (Or MP3 Download) Available To All The Other Referral Network Members

One month you could interview an accountant on how business owners can legitimately

reduce their taxes.

The next month you could interview a financial planner on how business owners can set up

living trusts to protect their wealth.

The following month you could interview a virtual assistant on how business owners can

reduce their employee overhead by outsourcing their administrative work.

And so on, and so forth.


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This way, you (as the group leader) are providing valuable content to the group... youre

increasing the probability each expert you interview will generate direct (and referral) business

from the group... and... because youll be making the service professional you interview look

good (and helping them stimulate more business), the law of reciprocitywill kick-into-gear

and the person you interview will feel compelled to refer business your way.

You could also do a monthly teleconference for the groupdispensing, say, good, solid

marketing information each month... demonstrating your expertise in the process.

Any pray tell, what do you imagine would happen if you build a dance card of service

professionals (as I have outlined above)... and... you regularly dispense good solid info to all

those service professionals?

The answer, in case you havent guessed, is you will very quickly become known by

hundreds (and perhaps even thousands) of other service professionals (and all their legion of

clients) as...

THE Person To Hire For The Services You Provide

And because you will let it be known you offer generous rewards for any referrals that turn

into paying clientsyou will suddenly have an extended colony of referral savvy service

professionals on-side who will eagerly channel referral leads your way.

Which, as Im sure youll agree...

Is Just About As Close As You Can Get

To Marketing Heaven!

Have I covered every singlestrategy I know of to generate referrals for your business?

No. There isfar moreI could tell you about referral marketing.

However, the take away lessons for today are:

1) A systematic referral marketing process cuts down your advertising and traditionalmarketing expenditure (thus saving you money).

2) It allows you to charge higher prices for your servicesafter all, once you have asystematic referral marketing process in place, your services are suddenlyperceived

to be more professional and exclusive.

3) It frees up your time. So you're more relaxed, creative and you can devote moretime to developing and honing your specialist skills and expertisethus making

yourself more valuable...for which you can, once again, charge clients higher fees!

4) When you set out the "ground rules" for your client relationship in the beginning(with the expectation you'll be asking for referrals) -- it forces you to "up your

game"... making it even more likely your clients will turn into "groupies" who will"trumpet" your business to all and sundry! And


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5) When the economy is lethargic and people are extremely cautious about spending(risking) their moneyits more important than ever to have a systematic referral

marketing process in place.

And thats just to name a few reasons to set up a systematic referral marketing process foryour business.

Bottom line:

The overriding real benefit (to you) when you have a systematic referral marketing process in

place is

You Suddenly Go From Having To Continually Be In

Hard-Slog "Selling" ModeTo Transitioning Toward The More

Relaxed "Order Taking" Mode

Which is a whole lot more fun (and profitable!)

Finally, it should go without saying but, if you want existing clients to refer business you

wayyou mustfirst satisfy them (even astonish them) with your conduct and service.

Warmly,

Michael Silk.

referral suction

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