How to Get Massive Amounts of the Right Referrals

by Earl Kemper, ActionCOACH Business Coach | Oct. 20, 2011

During a recession, I coached a construction company from two million in annual revenue to $22 million in $18 months utilizing my referral system. In the previous 18 months they were a $4 million dollar company. They were losing ground. They ran several expensive marketing campaigns and weren't getting any business from them. Their greatest challenge was getting enough opportunities to do business that generated enough profit for them to grow.

I asked if they had any strong relationships that could refer business to them. They assumed that if someone wanted to refer business to them they would have done it by now. At one time, they had been asking for referrals by saying, "Who do you know that is about to do some new construction that you could refer us to?" This got no results, so they quit asking.

Through the process that I'm going to share with you, we were able to get 279 names of people that could refer them to opportunities for new business. We focused our attention on the top 16 most influential relationships and asked them to connect us with people who could benefit from their service. In just 6 months, they grew from $2 Million to $10 Million. And in 18 months, they had grown to $22 million annual revenue. But before I tell you how we did that, I'd like to tell you a little about my journey of learning how to get a massive amount of referrals for my own business.

Finding Common Ground

The greatest challenge for many businesses is they don't know the right way to ask for referrals. My first five years in business as a financial advisor, I had the same challenge. Just like the construction company, I would ask my clients, "Who do you know...?" This was met with many blank looks. It was such a broad question that no one knew how to answer it. They had a difficult time coming up with names.

The few times I had success getting referrals, the person who referred me to their friends did so because they had something in common those people. So, instead of "Who do you know," I began to ask these kinds of questions: "Where did you grow up? What kinds of organizations do you belong to? What are your favorite things to do for fun?" I found that if I asked questions in four categories, it always led to common ground. Those categories are hobbies, interests, lifestyle and values (family and community).

Harold and Clara Jane Johnson were a couple in their seventies and one of my favorite clients. When I asked, "What are your favorite things to do for fun?" They said, "We LOVE square dancing!" They told me how much fun they have when they go dancing and how they love the people in the group. I asked how many members there were in the square dancing club. He said, "311. Would you like to come to one of our square dance nights? Most of our members will be there." Knowing I would likely feel foolish at a square dance, I said, "Absolutely!"

Getting a Personal Introduction

At a break in the music at the dance, Harold took the microphone and from stage said, "I want to take just a minute and introduce you all to my amazing financial advisor. He's the reason why we're retired and we never have to worry about money. If you get a chance, you ought to sit down and see what he has to say." I couldn't have asked for a better endorsement!

During our next meeting, I asked Harold and Clara Jane what people I should work with from their square dance club. Harold took out the directory and marked 156 names that he would be happy to refer to me in person, either through a phone call or meeting. And that is when it really clicked. People will refer you to people that they have something in common with that many times has absolutely nothing to do with business. I asked Harold why he hadn't referred me to these people previously. He said, "I thought you were too busy to take on any more clients!"

Thinking in Categories

Building on what I learned about the power of finding common ground with individuals, I created a process for getting referrals from businesses. I call this exercise the "Wheel, Hub and Spokes." You can use this to get referrals from other businesses, whether they are your clients or not. And, you can use this exercise to show other business owners how to get referrals and get referrals yourself while doing it.

I want you to imagine for a minute that you were sitting down with a financial advisor and you are going to show them how to get referrals. Take a blank piece of paper and draw a big circle, like a wheel. In that circle, about a third of the size of the original circle in the middle, draw another circle. It should look like a doughnut. We're going to call this the hub. In the center of the hub, you'll write the type of business you want to get referrals for. So in this example, in the hub we'll write "financial advisor."

A financial advisor has many categories that they connect to on a pretty consistent basis. We want to think about some of the primary connections that a financial advisor has. For example, they might have a relationship with an estate attorney. So, between your hub and the wheel, draw a straight line that looks like a spoke. On that line, write the words "estate attorney." Then, draw another spoke and write CPA and another spoke, write a property and casualty insurance agency. We can continue around the wheel adding several spokes with many categories.

If this financial advisor works with business owners a lot, add spokes for business categories. For example, a business broker could be a good person for a financial advisor to work with. You could also add companies who specialize in staffing, web, technology, payroll, and property management.

Then we might switch gears a little bit. What are some associations they might be connected with? Are they connected to any chambers of commerce? Next, you might add a spoke for clients. Or add multiple spokes for clients, where you could write what type(s) of business clients that they work with.

Getting Names from Categories

If you were teaching a financial advisor how to get referrals, you first help them to think about possible categories where referrals might come from. As they're looking at various categories and you get clear about those, then you can dig into names. As an example, there's probably more than one insurance agent. They probably belong to more than one association. Work with them to write down the names of people representing the categories you wrote on the spokes.

This was the exercise I used when I was working with the construction company. We used "general contractor" in the middle and started thinking of subcontractors, advisors, various outsources and vendors. As a result of all those relationships, we came up with 81 categories for our spokes. We came up with 279 possible names for those spokes. If you started out with that many names, how many referrals do you think you could get?

Now do this exercise using your own company as the hub. You can use relationships that you work with as spokes, then go to each of those relationships and show them how to do this using their companies as the hub. As you help other business owners come up with sources for referrals, you can combine your lists of categories and names with other business owners and start working together. And when you help each other find common ground with people on your lists, imagine how many referrals that you could get!

Earl Kemper, two-time global coach of the year in the world's largest business coaching organization, ActionCOACH (2006 & 2009) is the authority on developing strategic alliances and getting referrals. Over the past 28 years, he has successfully coached more than 1,100 individuals who on average, double their business in less than nine months using techniques he developed. Referrals and teaching others how to get referrals continues to be his number one source of new business for his company, ActionCOACH Empowerment.


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