Why you Don’t Get the Customer Referrals you Should

Most companies think that doing good work is what gets referrals from their clients and customers. Yet they say they do good work, but don’t get many referrals. Even when their high customer satisfaction ratings are validated by surveys like Net Promoter Score (NPS), they don’t get the referrals they should. What’s the real underlying issue?

Conventional sales wisdom says the reason you don’t get referrals is that you don’t ask for them. It’s true that if you ask for them, you might get a few, but you won’t get nearly as many as you could and should. The real issue is found in why sales and business development professionals don’t ask for them in the first place. It’s because it really does make your customer uncomfortable, and after all the work you’ve put into making them comfortable with working with you, the last thing you want is to ruin that. Asking for referrals is working the wrong end of the problem. The right problem to solve is understanding how to make them want to refer you and feel comfortable doing it.

There are two root cause issues. One is simply a language problem. For example, customer satisfaction surveys ask if they would “recommend” you to others. The customer thinks that means to act as a “reference” for you and say good things about your when asked. Sales and marketing people think “recommending” means making proactive “referrals,” or introductions, to prospective customers. To the customer/client that’s a very different thing, and they are uncomfortable with that. If you do nothing else, that’s the end of the story.

The bigger issue lies in the fundamental relationship you have with your client. By definition, it’s a Customer-Vendor relationship. You provide products and services as promised, and they pay you as promised. If you do exceptional work, they happily pay you, but they still just pay you. That’s the nature of the relationship. There is nothing in the scope of that relationship that says they proactively send prospects your direction. This means that it is your client management goal is to expand the scope of the relationship and do it in a way that makes them want to refer business to you and feel comfortable doing it.

The first objective in solving this problem is to re-define the boundaries of the relationship beyond the customer-vendor Relationship. That means you must do things for the customer that are outside the scope of that framework. Those can be professional and/or personal. This has happened to you with a few of your clients, because you both developed an unusual connection, and your relationship naturally grew beyond the scope of the usual customer-vendor relationship. But instead of relying on the few times that set of circumstances naturally unfolds, you need to systematically make that happen with all your customers.

If you stop just listening for the “buying signs” that all sales training tells you to do, you will be surprised how many opportunities you’ll hear about in every conversation to do something for your client that’s outside of the customer-vendor relationship. For example, if they’re considering a new software migration, or integrating an acquisition, you probably know someone who has already done that and would be happy to share lessons learned. On a more personal level, if their kids are in college, you can offer to introduce them and their resumes to others in your network for potential jobs and internships.

The opportunities are endless, but the common denominator for those activities must be that you cannot get paid for them. Those offers will redefine the relationship and stretch the boundaries to include actions that benefit each other that are outside of the contractual relationship. All of your clients will certainly be grateful, but more importantly, most will want to reciprocate. Obviously, the best form of reciprocation would be to introduce you to prospects.

Once have a customer that is motivated to help you outside of your professional relationship, your second objective is to make it easier for them to refer you. The primary resistance to referring you is that they don’t want to be seen by their colleagues as “selling” you. That’s why if someone asks them if they know someone like you, they don’t hesitate to refer you, because they’re simply being helpful to their colleague. But, if nobody asks and they’re proactively referring you, they feel they’re selling you.

Although there are a number of ways to help them, the simplest approach is to give them a “trojan horse”, or coupon, that they can offer to colleagues. The key is that it has to be valuable or helpful, and the more that it is, the more they’ll circulate the offer. This might take the form of a no-fee assessment or review, discounted or additional service, invitation to a special event, etc. To make even easier, be sure to tell them the most effective way to make the offer to their colleagues. You can learn more about that by clicking Help your Network See more Opportunities to Refer You.

There are dozens of powerful psychological dynamics taking place in all your client and prospect meetings, whether you’re aware of them or not. If you aren’t making them work for you, they’re probably working against you. Are you ready to begin operating at another level?


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