“In this economy, developing a strong referral strategy is a fast, easy cheap way to build a strong business,” Palzewicz said. “Referrals are more important than ever because people are more careful where they buy and the words of satisfied customers, especially customers that are their friends, can be very powerful and more impactful than any other type of advertising.”

As is my habit, I was reading blogs, press releases, and other material on networking, when I ran across the above quote in a press release. I become very frustrated when I read information that is incorrect or misleading, not intentionally misleading but written by someone who really does not understand what the referral process is.  McDonald’s is fast, easy and cheap, but you cannot apply that to a solid referral strategy.

 “In this economy, developing a strong referral strategy is a fast, easy, cheap way to build a strong business.” Nothing could be further from the truth. While networking might be considered fast easy and cheap, building a referral process takes time, it is a skill that must be learned, and requires a budget of time and money. When a client comes to me and wants to develop a referral strategy they must have a developed network that we can then develop into a proper referral strategy for their business.  McDonald’s is fast, easy and cheap, but it is not the first place you want to go if you are looking for a high quality meal.  While it is nice to sometimes have low level leads from fast, easy and cheap networking, it is not the way to sustain your business.

Let’s take a look at why the words of Fast, Easy, and Cheap cannot be related to developing a referral strategy.

 Fast – A solid referral strategy is based on a relationship built on trust. Trust takes time, you have to be willing to take the time to build the trust. People are not going to refer business to someone whom they do not trust to make them look good. How long it takes someone to trust you depends, ask yourself, do you trust fast?

Easy – Once you have your systems in place for your referral strategy, it does feel pretty easy. Getting those systems in place and maintaining them is not easy, fast, or cheap. If building a strong referral strategy were easy, there would be a lot more very successful businesses generating high quality referrals. I know this is not the case by the number of businesses that hire me to help them implement a strategy and systems.

 Cheap – Another big myth. If you are going to develop a referral system you must set a budget of both time and money. It is not cheap to belong to multiple organizations, have one to one meetings over coffee, lunch and even dinner, set up and implement a system of rewarding your referral partners, pay for travel to events and meeting, and get educated. Is it cheaper than running a TV Ad over and over, yes, is it cheap, no!

Anytime you go at something with the idea that it is fast, easy and cheap, you are bound to disappointed with your outcome.  Developing a referral strategy that works takes time, money and effort, but when it starts paying off, it pays in a big way.

In this economy everyone is looking for fast, easy, and cheap ways to build business, but if you apply that concept over a long period of time you are left with less that desired results.

Shortly after finishing one of my monthly Referral Success 101 classes I had a gentleman participant approached me with a concern and a question. His concern was a very familiar one to me;

“I have spent so much of my life always trying to get the deal, looking for the next customer, that I now realize that I have become that person whom others avoid at the networking events I attend. Whenever I had a one to one with someone I met I would spend the entire time pitching my service to them. Many of them I closed so I did have some sale success. Now I realize, I really do not have a network of people whom I can turn to for help to grow my business or frankly any other thing I might need them for. So, what do I do, where do I start?

My answer was simple, “Begin again, and start from where you are”.  It is never to late to start again. This was the very same answer that I was given when I found myself not doing my yoga and meditation practice. I had lost much of what I had learned, I felt defeated and my friend simply said, begin again, from where you are now.

Don’t be defeated, don’t think that you have to scrap what you have and start over, and don’t give up. Take a look at your database and decide who you know and how well you know them.  Are the members of your support network, your knowledge network, your referral network or simply a contact or customer.  If you can’t remember who they are or when and where you met them, removed them.

Now you know where to start, start connecting with those you know and make a list of the people whom you want to reconnect with or build a deeper relationship with. Reach out and begin to start building your network with stronger relationships. As time goes by you can add to the network and deepen the relationships.

Start from where you are, get educated, help others and your network will flourish.

Here is the one you have been looking for. The last step in the referral process is a relatively easy step for your referral source, assuming they have been trained properly. This is the step where the work you have done thus far turns into the possibility of business. It is the appointment. When trained correctly your referral source can now set up an appointment for you and the prospect to meet. They have done a good job identifying need and building your credibility when they offer your company as the solution, now they set the appointment.

This is your opportunity to meet the referred prospect, build some rapport with them and possibly close a deal. If your referral source has done a good job they have passed you a level 10 referral, which means the deal is done, all that is left is the paper work! The higher the level of the referral, the less work in the sales process you will have to do to close the deal. With proper training and preparation your referral source should be able to pass you high level referrals consistently.

Note: Anything your referral sources are doing for you, you should be doing the same for them.

It is important to remember in this step you have one key commitment to your referrals source, you must leave them looking good to the prospect, no matter what. That is what they trust you to do, if that means, walking away from the deal because it is not a good fit, that is your obligation to the referral source.

Remember: A referral is an opportunity to do business, it is not a guaranteed sale.

Once you have had the appointment with the prospect, don’t forget to call your referral source and let them know how the meeting went. Review your referral process and discuss what went well and what might have been done differently in the process.

Passing referrals is a business process and you should have a carefully constructed strategy around the getting and giving or referral. The process is much like dancing, you both must learn all the steps and practice them often. Both the referral source and you must be in sync with one another, constantly going over the steps and making sure the process is working for both of you otherwise, you may be stepping on someones toes.

If you would like to learn more about the five step process, check out your local Referral Institute Programs.

Sometimes it is good to hear the same thing from someone else.  Such is the case here.  Bill Cates is known as The Referral Coach and does a great job helping his clients get more referrals.  One of the biggest challenges that I have when working with Referral Institute clients is getting them to narrow their focus and understanding how important it is.

In this Blog,  guest Blogger Bill Cates does a great job explaining why it is important to Narrow Your Focus….

Weekly Referral Tip – Bill Cates

This issue of The Referral Minute has been prompted by one of our readers. He asks the question:

“We have started to gain some divorced women and a couple of woman business owners as clients. If we wanted to target this niche (divorcees, widows, and wealthy women in general), would this be a good idea? The ironic thing is that women are not really a niche as they comprise 51% of the population. Your thoughts and comments would be much appreciated.”

Before I address this question directly, let me remind you of why you should be thinking about narrowing your focus with a niche – if you haven’t already.

1. You bring more value to your niche prospects and clients. Niche prospects see the value more quickly and want to work with you. Niche clients experience your value and you become more referable.
2. You can create a reputation more easily in a niche. Most niches/affinity groups have formal and informal ways of communicating with each other. The more referable you are (the value you bring) and the more they know you are targeting their niche, the easier it is to grow your reputation and get your phone ringing with great prospects.
3. You can identify all the players. In many cases, it’s easier to identify potential prospects in a niche. For instance, using today’s internet search tools, you can easily identify all the owners of a business in a specific industry. You can identify all the high-level executives in a specific company.

Now back to the question.

While women in general may not be a very good niche, you can build a great business staying with woman, but being more specific. For instance, I have met several – very successful – financial professionals who have had great success targeting divorcees and widows. This is not ALL women, but a subset that usually have a great need for a good financial professional.

Because there are no associations or clubs (that I know of) for these women (maybe some support groups, however), it’s a bit harder to identify and contact this type of prospect. If you’re lucky enough to have a client of this type who belongs to some sort of organization that is populated by divorcees and/or widows, then you might be able to speak at some meetings, create some seminars, and write for their publications.

Another way to get more focused with this niche is with women business owners. There are many things I like about targeting women business owners. The main reason is that woman, in general, and business owners, in general, usually play the referral game more willingly and more frequently. I know of one successful financial professional in New York who says he averages 2.5 referrals per male client and 27 referrals per female client. Now that’s some pretty good numbers.

Unlike widows and divorcees, it’s much easier to identify your business-women prospects. There are many associations of woman business owners (like NAWBO – National Association of Woman Business Owners – they have local and regional chapters). In addition, they have many types of gatherings, events, publications, causes, etc., that you can leverage to build your reputation.

Many Kinds of Niches

Of course, there are many great niches. I’ve seen what I’d call “micro-niches” that can be great and even a fun way to build a business. Here are a few standard and creative niches:

1. Physicians
2. Surgeons
3. Dentists
4. Small Business Owners within a narrow industry group
5. Owners of Corvettes, Porches, BMWs, etc. (they have clubs)
6. Horse owners (they have clubs and associations)
7. Dentists that ride Harley Davidson Motor Cycles (Yep! They exist! A narrow and fun niche.)
8. Employees (or executives) within a certain large company in your area
9. Retired individuals from a specific company or industry
10. Teachers
11. Salespeople

There are many more. In fact, if you’d like to tell me your niche and why it works for you, I’d love to hear from you. Info@ReferralCoach.com

You can read more from Bill at  ReferralResultsBlog

I went out into my backyard today to look at my crop of Indiana Tomatoes.
I was quite disappointed to find that they still have not ripened.  The weather has been very cool this year and that means the tomatoes ripen more slowly.    I am losing my patience because I want vine ripe tomatoes NOW!

Ironically,  I came into my office to open an email from one of our newest clients.  He and I are meeting for some one to one coaching around his DISC profile, he is a high D and likes results, NOW.   In his email he stated “Please send me the roster of current and past participants, so that I may have 2 referral partners identified by the time we meet.” Oh if it were only that easy!

Unfortunately,  the key to developing strong strategic relationships with a referral partner is patience.  Like my tomato plants there is more  involved than just sticking the plant in the ground and telling it to produce.   Your referral network must be nurtured, tended to, and supported.

Here are four keys to developing a strong referral network and growing good tomatoes

1. Identify the right kind of person to build the relationship with.  Just as choosing  the right kind of tomato plant is important,  you need to know what kind of referral relationship you want.  You can have contact sphere relationships that will yield lots of little incidental leads that can keep you very busy, kind of like the little cherry tomato plant that will give you bowls full of tomatoes quickly, or you can have a full fledged referral partnership that will yield larger, proactive,  high value referrals.  Similar to the the Big Boy tomato plant.  They take longer to grow, but well worth the wait.

2. Understand that time and consistent nurturing is required.  You can’t  just throw the plant in the ground and expect tomatoes to spring forth.  The same holds true for your referral relationships.  The relationship has to be built on a foundation of trust, understanding, collaboration and educations.

3. There has to be give and take in the process.  The tomato plant needs care, water, and plant food in return you get juicy red ripe tomatoes for all of your efforts.  When you give to your referral network they will in return give to you, if you consistently take with out giving eventually your network will wither and little or no fruit will be provided.

4. Diversity is important, this year I planted one kind of tomato, so of course I am still waiting.  If you plant a variety of tomatoes; plant some cherry tomatoes who will yield great flavor quickly,  as well as the slow growing variety that give your the bigger more flavorful fruit later in the year.  Your referral network can be built with a variety of relationships.  Those who will give you leads to follow up on while you are waiting for those that will give you the quality of referrals that will allow you to work smarter not harder.    Those little tomatoes will keep you fed until the big ones are ready!

Over time and with the right work, you can have  consistent quality referrals coming into your pipeline from a well nurtured network.  Remember, like the tomato plant, it takes time and work before you realize the fruit of your labor.  Be patient and don’t try to rush the process!

Over the years I have developed a pretty deep network and one of the things that I spend a lot of time doing is up dating my database.  In the process of doing that this week I noticed that my strongest referral relationships are with guys.  So I began to think about that, why are there more males in my strong contact network instead of women and here are some of the things that I came up with.

When I sit down with a guy to build a referral relationship the conversation tends to be straight forward.  When I ask the question, “What can I do to help you grow your business?”  They almost always have a response.   They let me know exactly what it is I can do; “You can help me get more speaking engagements” or “If you do a newsletter it would be great if you would let me put an article in it.”

On the other hand if when I sit down with a female referral source and ask the same question I am often given this response; “I can’t think of anything but if I do I will let you know.”

Women seem to be challenged at knowing what they need and asking others to help them.  We feel that we cannot ask others to do things for us.  After all, have been raised to believe that it is our responsibility to take care of others, we do things for our spouses, our children, our family members even our co-workers.

One of the tough things for women to do it is ASK for what they want, clearly, succintly without guilt.  It is something that we really must learn if we are ever going to be good at leveraging our networks.  Keep in mind, we are not going to ask anyone for anything that we wouldd not do in return for them if they would ask.

Take a moment and ask yourself the following questions:

1.  What 2-3 things could I ask others to do to help me?  If you know in advance what kinds of things your networking members can do for you it will be easier for you to ask them when you are sharing a cup of coffee.

2.  List 3-4 people you would like to meet or be connected to.  Your network members are happy to connect you if you ask for someone specifically instead of “Anyone who needs my services.”  These might be professionals you want to add to your network, possible referral sources or potential clients.

3.  Make a list of the 4-5 people who might be willing to help you.  Most likely these are people in your network whom you have a relationship with.  They are people whom you are also willing to help if they ask you to.

It is important that you ask for what you want, there are members of your network who are more than happy to help you but they will not figure it out for you or take the initiative.  Our beliefe that “If they like me or if I do a good job for them, they will help me, refer me or connect me” hurts us.  We get what we ask for, if we wait for people to help us it may never happen.

If you want to get more referrals from people in your network, you have to be able to make it easy for them to find and give those referrals to you.   They want to help you, but most will not step out of their comfort zone to make it happen,

Here are 5 things to help you start the process of making it easy;

1. What should I listen for? I am with people all of the time, and many of them are complaining about something, or sharing great news, or contemplating a decision. Each of these conversations present opportunities to develop referrals for you.

2. What visual clue might I see that would lead me to recommend or refer you? Are there things that are common to signals that a person might need you? Such as someone who’s car has a dent in it and you are an auto body shop owner.

3. Are there things that I might see that would help me recognize someone as your target market? Like a motor cycle or boat in a drive way for the insurance agent.

4. What kind of things might be happening that would lead me to believe that someone is in the market for your services? A child being born, and child going to college, or a new business that just opened?

5. Is there an activity that you clients often engage in? Such as running in mini-marathons, jogging, bike riding, working out, skiing, or any number of activities that would help me identify our clients?

The more you can paint a picture for your network members the easier it is going to be for them to help you. Unfortunately, this means that you have to give some thought to what and who you are looking for as clients. Anybody or everybody will not be as effective. Profile you clients and teach your network members how to spot the clues.

I have spent years networking with both men and women.  In that time I have noticed a lot of difference between how the two sexes network.  I have come to realize that Women  are really very natural networkers.

Building a strong network requires that you nurture the relationships that you have developed.  Women are very good at nurturing, they stop to do those little things that make others feel special.  They remember birthdays, they send cards, the give referrals and connections to others, and they volunteer to help whenever possible.

Women tend to be good listeners,  one of the most important traits of good networkers.  So they often hear the needs of others and seek to connect them to people who can fill those needs.  Acting as a matchmaker between the two.

Women understand and operate under the philosophy of givers gain naturally. They understand the old adage that it is better to give than to receive.  They are quick to give to others, they are quick to help, they are more than willing to introduce two people and help them to connect.

If you want to have a strong referral source in your network, ask a woman, she’s a natural.

I am always interested in learning how people generate referrals for their business.  So, when I am networking I will ask the people I meet the following questions;  How much of your business is  by referral and the response is often 50% or more.  That always leads me to my next question, do you have a tracking system or is that a good guess?  It is usually just a guess.

For most networkers, referrals are completely random and go something like this:

If someone calls me up and ask me if I know someone who can help them, and if I can remember if I know someone who can help them and if I can find the number of that person and give it to the person who just called me, and if they will pick up the phone and call the person I recommended, then they got a referral!  The average networker is very excited because they believe that their network is working.  But it is completely random and reactive.

Do you have a system for generating referrals?  If referrals are important to your business, shouldn’t you have a system that you can count on?

Shouldn’t you know who you best referral sources are?

Shouldn’t you know how and when your referrals will show up?

Shouldn’t you have a system to track your networking activities?

Shouldn’t you have a system in place for thanking your referral sources?

Really, why are your referral random?

Organizations like the Referral Institute have created programs and software to help business professionals get out of the “If” referrals to developing a system that generates referrals consistently.

If referrals are important to you then why are they so random?  With organizations like the Referral Institute and books like The 29% Solution they do not have to be.

Have you ever asked a referral partner to introduce you to a contact they have only to be put off or not introduced at all? Did you wonder why? You might be surprised to know, that your referral partner did not have the same level credibility as the level referral you were asking for.

I once had a referral partner who boasted a very large database, we decided to sit down and do a little identifying out of each other’s databases. He had great contacts in his database but when I began to rate the level of referral I was looking for against the level of relationship he had with the contact, there was great disparity.

He quickly realized that his network was wide, but not very deep and he had some work to do to build higher levels of credibility with some of the people in his database. You see he spent most of his time networking, very little time working his network. Once, he had done some of that work, he became a much better referral partner.

Having a very wide network that is only an inch deep does not make you a solid referral partner. If you spend time, working your network instead of being out there networking you will create a much deeper network. One that will produce results for both you and your referral partners.