Legendary Marketing Guru
Dan Kennedy’s
Secrets to Incredibly High Referral Rates
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Fourteen Top Secrets For Incredibly High Referral Rates by Dan Kennedy
“I come from the advertising business, love advertising, believe in
advertising and certainly know how to get you all lathered up about
advertising, get you down to the newspaper, the radio station or the crooked
pen company tomorrow morning, checkbook in hand, frothing to advertise.
But the truth of the matter is that most real estate agents could afford to do
less rather than more advertising, because they are not yet doing the superb
job possible in developing new clients through referrals. I think you know
why it makes sense to emphasize growth through referrals. There are two
good reasons:
1. You simply get your best overall clients this way.
2. Most importantly, you get a client who is predisposed to refer.
Now that's worth thinking about. The client who comes to you from
advertising has to reorient themselves to refer, but the client who comes to
you as a referral naturally assumes everybody gets there that way; and then
the next natural assumption is that everybody refers.
Endless Chain of Referrals
In the early days of my sales career, I heard Paul J. Meyer, on a CD called
Prospect Your Way To Millions, using the term "endless chain of referrals"
and I'll tell you I got excited about that concept. If each client produces
another one in an endless chain of referrals, you need to start just a few
chains and you never run out of new clients. But even though we know all of
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these good reasons to stimulate referrals, we really don't do a very good job
at it.
There is considerable research to support the idea that the typical adult
consumer has significant influence over the purchasing behavior of as many
as 52 other adults. I'd like to suggest reading Joe Gerald's book How To Sell
Anything To Anybody for a better understanding of the principle of 52 (It
put Joe in the Guiness Book of World records). We might define the referral
potential of each client at 52, meaning that each client can bring you 52
more, but I bet you are not batting 52. You may not even know what your
batting average is.
How many new clients per active clients per calendar year do you get?
And, if you don't track that statistic, why not?
I can tell you that this profession's overall batting average is low.
Surely we ought to get one for one. Now I prefer to view this as a hugely
positive, as a wonderful window of opportunity you could drive a truck
through.
Check the Winners
So I set aside a day and I went through all of my own written and recorded
materials, all of my reference materials and made some phone calls to
several professionals I know with outstanding referral rates. I compiled
every best method I knew of for stimulating referrals, and the result is the
following checklist.
Big steps to take to dramatically and substantially increase the rate of
referrals in your business.
It so happens that this is important whether you advertise much or not. If you
don't do much advertising, then your only good source of new clients is
referrals and you have to do everything you can to achieve maximum
effectiveness in this area. On the other hand, even if you do a lot of
advertising, the big payoff will come from referrals you get from the
advertising generated clients. So you need a super effective stimulation
system to make your ad dollars pay off
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It's also my opinion that you can use your success in stimulating referrals as
a very true, accurate and unbiased reading of how good a job you are doing
in helping and satisfying your clients. People may smile, may even lie to be
polite, but they won't refer just to be polite. The equivalent of this, in what I
do as the speaker, is a standing ovation versus a cassette purchase. It's
actually pretty easy to get a standing ovation. Most audiences can easily be
manipulated into that. But whether or not they see enough value in what I've
said to reach into their pockets and spend their money to take my cassettes
home with them, that's the acid test. For you, your referral rate represents the
acid test.
The
Steps
Step 1: Decision
Decision is a powerful force. There may be nothing quite as strong as the
power of a truly made up mind. Napoleon Hill found this to be true in the
hundreds of super achievers he interviewed for Think and Grow Rich. And
he illustrates it in that book with a remarkable story about the sharecropper's
daughter. Rereading this story is a great source of appreciation for what we
can get done when we make up our minds. In this case, it's up to you to
make up your mind that you are going to improve for that purpose. It's not
enough to say in a vague, general way that you're going to do better. You
need to set up some definite objectives. Clarity is important. We live in a
noncommital time -- so, commit.
Step 2: Measurement
You've got to determine exactly how well or how poorly you are doing now,
so you can set up and pursue new objectives intelligently. Then you need to
measure constantly, your progress as you watch for and focus on those
objectives. And if you do, you will begin to note many ratios by batting
averages developing. For example, there's a ratio of x-referrals to y-new
clients in a month, quarter or year.
There is a ratio of x-referrals to y-conversations with clients about referrals
and so on. You'll be able, first, to establish these ratios as they are, then
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second, work to improve them. Measurement and accountability,
incidentally, automatically improve performance. Pro athletes keep records
of all sorts of individual statistics that the public isn't even aware of. A
defensive line guy in football measures the number of yards he gives up, the
number of times he blocks his opponent successfully, sacks, hurries, and a
dozen other private individual stats. Without these challenges, his
performance would level off.
In sales organizations, the more accountability the better with their clients,
solely because of having to complete a weekly report, and I've used that in
my own private and small Inner Circle group consulting. You shouldn't need
someone else to impose measurement and accountability on you, if you are a
mature, serious individual. You can do it for yourself. Ultimately, your
accountability should come down to daily activity measurements.
Step 3: The Office Environment
You are not going to create a high level of referrals in a low-energy office or
company. The decor, the lighting, the cleanliness, the staff -- everything
going on in the office combines to give a sense of energy on a subconscious
level. We aren't exactly sure how to explain all of this in purely logical
terms, but there's no doubt it goes on.
Step 4: Excellence
You can keep clients if you are good, but it takes a level that's better than
good to motivate and deserve referrals. There's a Disney definition of
excellence:
Doing what you do so well that people can't resist telling others about you.
Give this some serious thought.
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Step 5: The WOW Experience
You know, I travel a great deal. Most hotels and motels are, frankly, lousy
and price doesn't seem to matter. When I was traveling, doing seminars
every night, we worked from 7-10 p.m. Many hotels close their restaurants
at 10 p.m., as did this one Marriott Courtyard that I was in -- but let me tell
you about this particular Marriott Courtyard.
First of all, check-in went smoothly and perfectly.
Second, a staff person was waiting for me at 6 p.m. at the meeting room to
be sure everything was the way I wanted it.
Third, at 10:30 p.m., after the seminar, I drug my tired rear end up front and
said, "I know you're restaurant's closed, where's the closest place I could get
a sandwich and a drink? Here's what the guy said. "Well there are several
good places, but because we saw you weren't finishing until 10 p. m., we did
go ahead and make you a couple of ham, turkey, and cheese sandwiches and
we saved you a good salad and we'd be happy to serve you in the bar if you'd
like."
What a shock! That was a WOW experience. How you replicate that kind of
experience, I can't dictate to you, but I can tell you that any client who has
that type of experience will automatically refer at a higher level than she or
he otherwise would have. Sometimes a courtesy call can have this effect. I
had a dentist call me the night after I'd been worked on just to see how I was
feeling, and I've never forgotten that.
Step 6: Team Commitment
The stimulation of referrals, the WOW experience, has to be every staff
member's Job #1. They have to be on the alert for any opportunity to make
the customers experience better.
In my seminars, I tell a story of the staff person, arms full of files, swept
past some new clients and a another staff person without stopping to smile or
say hello. What the guy told me was, "Barbara's not supposed to talk to
clients, she just does the paperwork." Hopefully, you can immediately
identify what's wrong with that. You see high referrals develop in an office
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that is referral-oriented.
Step 7: Training the Customer
There's a strategy in direct marketing called training of the customer. This
refers to the fact that the way a customer is obtained greatly influences all
the future opportunities and relationships with that customer.
For example, is a customer attracted initially by a free trial offer? If so, that
may very well prove to be the only way that customer will again buy from
the company. Does this apply to your business? I think so. I think the very
first processes you go through, the source of new clients, the first
consultation, all set the stage for everything to come. The clients likelihood
of referring and enthusiasm for referring is, I think, made or broken very
early in the game.
Some people think the client has to experience results before referring, but
this is contrary to known sales psychology and to the experiences of
businesses with high referral levels. Instead, the new client is most enthused
when everything is new to him, exciting to him, when the decision to choose
you is still fresh. This gives us an idea of how the new client is first sold and
how well the new client is first sold controls subsequent referrals.
Step 8: Education
The next huge step, a huge issue, is education. I'm here to tell you that you
cannot overeducate. Now you can be dull, and that's not good, but as long as
you make it interesting, you cannot overeducate
Referrals are directly related to the number of quality clients coming in to
your office.
Step 9: Convey Positive Expectations Through Print Media
Your client newsletter, for example, should include a thank-you list of those
who referred, a welcome list of new clients and a client of the month who
has gotten good results personally, has referred and preferably has an
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interesting story. These things, seen month after month in the newsletter,
establish referring as the appreciate norm.
Step 10: Those Who Refer Once Are Easier to Get to Refer Again
There are two very powerful tools at your disposal to increase referrals and
specifically repeat referrals dramatically -- second, third and fourth referrals
from the same client. This is very important for a simple reason: The client
who refers once is more likely to refer than the client who has never
referred. In other words, the path of least resistance for increasing referrals is
to get more productivity from the people who have proven to be productive
rather than new productivity from people who have been stubbornly
unproductive. By referring the first time, the client shows he has learned
what to do and how to do it, and now has the confidence to do it again.
Step 11: Recognition
Legendary female Entrepreneur Mary Kay Ash (of Mary Kay fame) said,
“The Two things people want more than money and sex are recognition and
praise.” You must recognize and reward (step 12) the behavior you want to
reinforce.
Clients have gone out on a limb to refer to you, putting their reputation, and
relationships on the line. If you want them to refer multiple times you must
treat that referral event like the big deal that it is.
Step 12: Reward
If you get each client who refers once to refer twice, what affect would that
have on your business during the course of a year. If you'll take a look at
these numbers, I think you'll be impressed. You can make this happen in
your company with just two basic tools. The first is recognition; the second
is reward. Praise and recognition make a big, big deal out of the first referral.
Here are some things might do:
1. Send a thank you letter, promptly.
2. Immediately follow with an unexpected gift.
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3. On the next visit, personally thank that person.
4. Put the referring clients name up on the thank-you board in the office.
5. Put the referring clients name in the thank-you list in the newsletter.
6. Enter him or her in the client of the month contest.
Step 13: Develop and provide good referral tools for your clients
Go take a look at your own materials. If you were the referring client, would
you be proud to give these to a relative, friend or co-worker? Would you feel
confident? If you are going to send somebody bear hunting, after all, it's a
good idea to give 'em some bullets. If you want clients to refer, it's a good
idea to equip them to do so, such as with a sales letter and other literature.
Step 14: Creation of event opportunities so clients can bring their family
members and friends to your office or to meet you. Many companies do a
good job each Thanksgiving and Christmas with food drives based out of
their offices. I know one who throws a huge annual barbecue every summer
open to all of his clients and anybody and everybody they want to bring
along. He meets hundreds of new people each year this way.”
I just wanted to close Dan’s report by saying that boy is this gold or what? I tell you in all
my years working one on one with people in the real estate business, getting referrals has
been and still is my #1 objective. Every time I meet someone that's an opportunity to start a
new chain of referrals. Being in the real estate business, I've sat down with people and
because of the good job I've done for them, and the great service, I've gotten introduced to
incredible buyers who I would have NEVER met if it wasn't for the referral process.
Nothing is better than Word-Of-Mouth-Advertising. Over the years, my goal with my
clients has become very clear, and is to make them my ADVOCATES. This means that
when the topic of real estate would be brought up with them, I would be the one they would
mention in the conversation. So, see what you can do to improve your referral process, so
that people start calling you, and wanting to do business with you.
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