Archive for December 29th, 2010

Dear Danielle: How Do Referrals Work?

Dear Danielle:

How exactly do referrals work?  Does the client recommend their colleague and I call them?  Do they contact their colleague and send them my way or what?  Thank you so much for your anticipated response.  —TA

Well, basically, they work any way you’d like them to work. 😉

Referrals come from lots of different places and come in many different forms.

Sometimes colleagues will refer clients to you. According to our annual surveys, the overwhelming majority of people follow the “what goes around, comes around” philosophy and don’t charge for referrals.  Others do charge referral fees or will want a percentage of any earnings from a client for a certain time period. You’ll want to get clear with the referring colleague as to what their expectations or requirements are.

You can also formally ask clients for referrals. For example, you could make it a standard question as part of your feedback process to ask clients for the names of folks they think would benefit from your support.

Your networking becomes a sort of referral source as well in that it helps you develop your word-of-mouth recognition. As you contribute and people read your posts, you become someone they come to know, like and trust. This leads to folks referring and recommending you to others.

You might have some sort of formal referral program that rewards people for referring prospects to you. Although personally, I really don’t recommend this for a professional service practice. There’s really no need and keep in mind, you would just be adding yet another burden to you administrative managements workload. Keep things simple is what I always say. Anything that unnecessarily increases or complicates work in your business makes it that much less profitable.

Those who genuinely know your work and feel it’s worth recommending to other will do so of their own accord. Your evangelists aren’t looking to be paid. They simply believe in what you do and they want to be a resource for their own audience. Those who do end up giving great referrals to you, you can thank by sending referrals their way as well and maybe once in awhile sending a little gift.

As you become established with a happy roster of clients, they tend naturally to refer you to others when they get a chance. This is another form of word-of-mouth advertising that leads to referrals. But I would definitely recommend being proactive as well in specifically asking clients periodically for the names of folks they think could use or would be interested in your services.

Another thing I would recommend you get conscious about is your calls-to-action. In your signature lines and in your “About the Author” text (such as when you publish articles you’ve written), include a line that says something about welcoming referrals. This puts the conscious thought in people’s head and tells them that you are actively seeking clients.

Be clear as well about who makes an ideal client for you so folks know who to refer to you. “Any warm body” is not an ideal client. Just because folks refer people to you doesn’t mean those prospects are going to be the right fit. So you have to tell people who is the right fit for you.  “I’m looking for  intellectual property attorneys in solo practice who would benefit from leveraging some skilled administrative support in their business.”