Creating a Referral Machine 7 of 7

Congratulations! You’ve established relationships and empowered that network. Great! But remember there is no such thing as perpetual motion. Too often, people work hard to create a referral machine only to watch it break down because they erroneously assume that an empowered network will just keep kicking out referrals.

Think of it like pushing a car: You have to work really hard to get the car rolling. Once the car is rolling you only have to exert mild force to keep it moving. But don’t let it stop because then it is like starting all over.

Establishing relationships and empowering the network is the Herculean push to get things moving. The mild force to keep it all moving involves three things.

Ask: Continue to ask for referrals, including things your network might not see. Don’t get frustrated if they are not referring things that seem obvious to you. Remember, they don’t live in your world and don’t see it as you do. So ask!

  • Can you introduce me to…?
  • Could you connect me to speak at this event?
  • Would you keep your eyes open for…?

Appreciate: No matter what your network does for you, thank them. If a referral goes nowhere, thank them anyway. Why? The fact they are thinking of you is excuse enough to celebrate. Your referral machine is working!

Also, appreciation is a wonderful motivator. Dole it out and people will do whatever it takes to get more. Few people thank others. You will set yourself apart when you show your appreciation.

Clarify: No matter how well you educate and empower, your network is going to get it wrong from time to time. They want to help you, but they are going to send you referrals that are, well, bad.

Don’t get frustrated. They want to help and they are trying. Reconnect with them and clarify your request. One small correction in how they perceive what a good referral for you is could spell the difference between continued bad referrals and a great new client.

Creating A Referral Machine 6 of 7

If you do a spectacular job educating your network on recognizing referrals, great. That, however, is not enough. You need to empower them with the ability to talk to prospective clients about what it is you do.

For example, if they recognize that the displaced executive is a potential client to refer to you, great. Encourage them to strike up a conversation with the person (and they will if they know, like and trust you). And transition into a discussion about franchising. Here is an example:

“I am sorry you are in transition. What is your next move? Have you considered becoming your own boss? I understand that franchising is almost a fool-proof means of successfully being in business. I know a great franchise broker … there is no obligation to meet with him and his services are essentially free, as the franchisors pay his fees.”

In addition to general conversation, empower your referral machine with non-technical buzz words and catch phrases about your industry (as well as what they mean) … Franchise Fee … Ongoing Royalties … FDD … Earnings Claim … Discovery Day. Your network should know enough to talk about what you do but not enough to do it.

Finally, encourage your network to hook you into the situation. In short, encourage the person to talk about you in a connecting sense. Returning to the example from before “I know a great franchise broker. There is no obligation to meet with him and his services are essentially free, as the franchisors pay his fees.”

Creating A Referral Machine: Part 5 of 7

Establishing relationships is an important first step. In so doing, you have built a network of people who are really behind you. Again, they know, like and trust you. This alone does not create a referral machine, however. Before your network can refer you, they need to be empowered. Empowered to recognize opportunities for you as well as empowered to talk or communicate about you.

People within your network do not magically know how to refer you. First, they need to know who to refer you to and they need to know when to refer you. To make this happen, it is entirely up to you to empower them to recognize these opportunities.

Consider franchise brokerage (though this applies to any business or profession). Certainly if someone comes out and says, “I am looking to buy a franchise”, your network should know to think of and refer you. But what about all the times that someone could be a great client but does not say they are looking to buy a franchise (or they do not even know that franchise ownership is an option)?

EXAMPLES:

  • What about the person whose spouse is looking to have their own business?
  • What about the displaced executive who might not be interested in getting back into the grind?
  • What about the mid-level manager that wants a way out of the grind?

If you want to create a referral machine, it is your job to paint a picture in the minds of your network as to who is a good referral candidate and what is a good situation. Here are three great ways to do this.

(1) Develop a series of short 30-second commercials that concisely convey what you are looking for and what you do. Again, develop a series, so that you have a varied message. Write these out and practice them, then use them as often as possible. For help on this find the short series on 30-second commercials.

(2) Even if you have a great 30-second commercial, people are not going to fully remember what you have to say. To overcome this, develop (again) a series of short summaries outlining what you are looking for. Make these short and simple (so simple that a 5th grader could understand them). Then neatly type and print them out (or even have them professionally printed) so you can quickly and easily hand them out, mail, or e-mail them to your network.

(3) If you give people the basic facts, they might politely listen. But if you weave these facts within a compelling story, example or analogy, they will be enthralled by what you have to say. If you have experiences, share them. If you do not have experiences, then talk to someone who does and borrow theirs. If you have neither experience nor access to someone who does, make it up. In this situation, it is not stealing to make someone else’s experiences your own. It is not lying to craft a story that has not occurred. You are doing this to paint a picture of what a good referral looks like.

In Part 6, we will address empowering your referral machine.

Creating A Referral Machine: Part 4 of 7

Okay, there are lots of potential people with whom to establish a relationship. What about the “HOW”? How can you make this happen?

Yes, there are lots of people. That is generally not the problem. That is seldom people’s shortcoming in creating a referral machine. It is the “how” that trips people up.

In establishing relationships, there are three main categories of activities you need to consider making part of your personal regimen. (1) Giving or adding value to others; (2) Ensuring that you become involved; and (3) Making sure that you are dependable or reliable in what you say and do.

First, when people hear the term “GIVING TO OTHERS”, they tend to conjure up images of dragging out their wallets. That is not the case at all. There are lots of things you can do in giving or adding value to others.

  • Doing business with others.
  • Sending them referrals.
  • Providing them with information.
  • Spurring them on.
  • Introducing them to others.

Each of these things adds value to others. The key part of all of this, however, is that when you add value to others, they cannot help but feel they know you, like you, and trust you. And somehow, they are quietly compelled to return the deed at some point in time.

Second, another means of establishing relationships is getting involved with your community.

Trust this, no matter where you live there are business groups, charities and civic initiatives that could use your time, talent and energy. When you get involved in your community, it raises your level of exposure and it demonstrates your commitment. With these things, people cannot help but feel they know you, like you and trust you, which is exactly what you need to start establishing relationships and to create a referral machine.

Finally, adding value and getting involved are great for establishing relationships. You, however, will undermine the entire process if you are not reliable. With even an innocent infraction of unreliability, you can kill your chances of getting referrals. Be reliable … be on time … do what you say… follow-up, as you promise. And if for some reason you are unable to do these things, alert the person who might be relying on you as soon as possible.

This may all seem like common sense. It is. However, it is not common practice. It has tripped up even those with the best of intentions. Guard against this.

Nevertheless, once you have these relationships established, you can start to put your referral machine to work. That is the subject of Part 5.

Creating A Referral Machine: Part 3 of 7

The important first step to creating a referral machine is establishing relationships. This all begs two important questions: (1) WITH WHOM should I establish these relationships? And then even more importantly, (2) HOW do I go about establishing these relationships?

As to WITH WHOM you should establish relationships, there is no magic or secrets. They are all around you. First, start with the people you already know. Why? The people you already know, presumably already know, like and trust you. Far too often, when people embark on creating a referral machine, they become fixated on people they have never met before.

Think about it. You know tons of people right now – friends from the community or school, former colleagues, existing or past clients. This represents a treasure trove of raw materials with which to work.

Second, develop a list of strategic partners. Ask yourself this – who are the people that do not compete with you, but who run in the circles where you would like to be running? What is the profile of a good potential client for you and who might be servicing them?

Third, everyone is connected. Everyone knows someone who might be a good potential referral for you (although they may not realize it). This is not to say that you need to establish a relationship with everyone. What it does say, though, is do not dismiss anyone. Give everyone attention and respect.

As to HOW, we cover that in Part 4.

Creating A Referral Machine: Part 2 of 7

Just because you want this referral machine does not mean that you get it. You have to build it using a three-step process to do so.

1) You start by establishing relationships.

2) Then, within those relationships (which is essentially a network of people), you empower them to not just understand what you do, but how to talk about it.

3) Finally, you remain in continual contact to appropriately guide and readjust the process. Yes, this takes work, but in the end the rewards far outpace the effort.

The foundation on which you will create a referral machine is the relationships you have with others. This is the most important point: people do business with and refer business to those that they know, like and trust. Those who get the most and best referrals are simply those who have the best relationships. They are widely known, highly liked, and implicitly trusted.

We will cover this process in greater detail starting in Part 3.

Creating A Referral Machine: Part 1 of 7

You are ambitious. You are savvy. You want to be more successful. You want to work smarter and not harder. You know that referrals are the means of achieving that. Referrals are the most effective means of creating this greater success.

The best place to be in business, (any business or profession) is the point where your new clients are almost exclusively generated from people in your network. These are friends, colleagues, strategic partners and even former clients sending you prospective clients.

At this point, your network becomes your sales force. In short, you have effectively created a referral machine and that machine (i.e., your network) is working for you, even when you are not working.

This begs the question, “How do I create a referral machine?” We start on this in Part 2.

Networking And Stone Soup

In the tale, Stone Soup, stingy villagers have no interest in sharing their food with anyone but their own.

However, when a peddler offers to share some stone soup with them (essentially rocks in a pot of boiling water), one by one, the villagers begin to share – a head of cabbage here, some salt beef there – and before long a pot of delicious “stone” soup awaits them.

This tale suggests that generosity and altruism are contagious. Nicholas A. Christakis, M.D., Ph.D. and James H. Fowler, Ph.D tested this assertion and shared their results in their book Connected.

120 students were put into groups of four. Each group member was given some money to perform a series of tasks. Members both profited and lost in this capitalistic exercise. Afterward, members had the option of giving some funds to others at their own expense.

The exercise was repeated, with different group configurations. In the first few rounds, no money was gifted.

Unbeknownst to the participants, one of them was a plant — someone in on the experiment. This person was the “Stone Soup Peddler.” At some point, the Stone Soup Peddler started to give away some of his money to others.

In the exercises that followed this exhibition of generosity, the people who benefited from the gift gave more. Even people who had only witnessed the gifting began giving more. These altruistic gestures began to spread through the group.

In business, you depend on others giving to you. You look for people to give you information, and to share referrals, insights, and ideas with you.

But people don’t just give; they are somehow moved and inspired to do so.

As the tale and the study illustrate, you have the power to inspire generosity through your own generosity. Any simple gesture can be contagious – a simple referral, an introduction, or just sharing valuable information. This will inspire your network to give to you and to others.

The Power Of Flocking

The United Kingdom has had a longstanding milk distribution system. Milkmen in small trucks bring the milk in bottles to each country house. Early in the 20th century, these bottles had no top, giving birds easy access to the cream on top.

The titmice and the robins capitalized most on this opportunity, quickly learning to siphon off the cream from the bottles.

In the 1940’s dairies began to install aluminum seals on milk bottles, effectively preventing the birds from gaining access.

This worked for a while but one by one, the titmice learned to pierce the tops and before long, the entire titmouse population was only mildly inconvenienced by the aluminum caps.

Other than an occasional few, the robins as a species never learned how to get around the bottle cap and were foiled (no pun intended) from getting at the milky cream.

Why? After all, robins and titmice are similar in size and physical characteristics. The difference was in how the birds interacted within their own species.

Robins are individualistic, self-serving and territorial birds. Rather than cooperate, they chase each other off when approached.

Titmice, on the other hand, are communal birds, relying heavily on other titmice for survival. Through this mutual dependency, they cooperate and collaborate, quickly learning from each other and adapting accordingly.

In short, the titmice won the battle against the aluminum caps because they learned from one another, while the self-serving robins, unwilling to share information, found themselves denied access to the sweet cream.

The lesson here is simple: Birds that flock, like titmice, learn faster, evolve more quickly, and increase their chances of survival. This is true for you as well. When you interact with others, you learn – new information, new techniques, and new ways of helping others succeed.

So, in short, build a network of titmice, not robins.

The Strength Of Weak Ties

In addition to the types of people in your network, you need to consider the extent to which you know people in your network.

In Getting A Job, author and sociologist Mark Granovetter found that 56% of people found jobs through personal contacts. Not surprising. After all, it is not “what you know, but who you know.”

The surprise was that the personal contacts used to obtain these jobs were not family or friends – “close ties”. Rather, most could be classified as “weak ties”. 55.6% reported that they saw their “job-producing” contact only occasionally and 27.8% saw their contact only rarely.

So, when it comes to job hunting – or finding clients – weak ties tend to be more important than strong ties.

Why? Because close ties tend to occupy the same world as you do. A spouse or close friend may share many of the same network contacts as you and is likely to only refer or connect you to people you already know.

Mere acquaintances, or “weak ties”, on the other hand, are much more likely to know people that you do not. While you might share a small overlap in networks, most of the people they know are completely unknown to you.

The take-away? Do NOT rely solely on close ties to fortify your network. A better means is to associate with people you don’t know well – the person from work that you know casually from meetings or trips on the elevator; the person you see every week at church but, beyond a name, you know little else about.

From a networking perspective, the most valuable people aren’t those closest to you. In fact, the more people you know who aren’t close to you, the stronger your position becomes.

In summary, the quality of your relationships matters and one measure of quality is the strength or weakness of the tie. Having lunch with your long-time best buddy can be fun but does little to build your network. If you want to build your network, have lunch with someone you know … but not that well.