You’re considered a nice person. You got kids, a mortgage, a car ‒ pretty much like everyone else. You do a good job, at least in your mind. Your customers all seem satisfied. So you’re probably wondering how come your customers don’t just automatically refer you to family, friends and business acquaintances.
There are two very broad reasons for this.
First of all, almost nothing happens automatically except for bad things. Think about that new car warranty you got. You know once it expires things will start to go wrong with your vehicle. It’s like clockwork. And, of course, these things all worked fine when the warranty was in place. But once the warranty expired, you had that car in the repairer on a regular basis. You probably got to know your mechanic real well. And he got to know you pretty well, too, considering you were helping to pay his mortgage and feed his kids.
The second reason is it’s not their job. Your customer is not your sales person. Their job is to give you money and they are fulfilling their end of the bargain. They’ve got other things to do.
Most business owners just don’t understand why their customers don’t automatically refer them. But giving a referral is a much higher threshold of risk and pain than it is to continue to patronise your business.
In fact, people will continue to patronise businesses even if they don’t do a very good job. It’s a matter of habit, and they figure the devil they know is better than the devil they don’t. It’s just plain inconvenient to seek out someone else, so they stay where they are even when they’re less than satisfied or pleased.
You probably have a favourite restaurant in your suburb. It’s not part of a chain ‒ more likely it’s owned by a family or someone who takes real pride in the place. You go there regularly. You and your wife both love it. You end up recommending it to some friends.
Time goes by and you haven’t seen your friends. But sure enough, the next time you do see them the first thing they bring up is that crummy, hole-in-the-wall dive of a restaurant you referred them to.
This is a loud-and-clear reminder to never make that mistake again.
Sometimes referrals happen only by request. “Hey, I’m new in the area. Where do you take your cleaning?”
That’s a question most of us will answer, but we’re not about to go around telling people about our dry cleaner. That’s a very high threshold.
Another reason why customers don’t refer is because there is no motivation in it for them. No reason for them to do this. Their feelings about your business are pretty neutral, ambivalent. They consider what you do for them to be “okay” or “fair”. Not exactly a ringing endorsement, but you’ll do.
You mistakenly think their continued patronage is a sign of ecstatic approval for which you are entitled some kind of extra reward ‒ like referrals.
You are kidding yourself. You are projecting something that really isn’t there at all.
Plus, there is no system or mechanism or process in place to refer someone. So even if I appreciate the services of my accountant, barber, landscaper there is nothing in place that I can act upon.
The last reason why you don’t automatically get referrals is expressed gratitude. Let’s say one of your customers actually overcomes all of the obstacles previously mentioned and actually sends you somebody.
What happens? They are not recognised and rewarded for this behaviour.
Or maybe they are recognised with a half-hearted thank you, or an email or some cheap, off-the-shelf “thank you” card.
So the person who provided the referral thinks “That business owner really doesn’t value this. Why should I bother?”
When you actually recognise and reward, you get more of the behaviour you recognise and reward.
Have you ever provided some referrals, not been recognised, and actually stopped patronising the place or person you recommended?
This can and does happen. Things can go bad quickly. When someone provides one or more referrals there is an expectation of some sort of expressed gratitude. When this doesn’t happen there is disappointment, sometimes even bitterness.
A prompt thank you is expected. Not something that happens weeks or even months later. If the thank you is delayed it either has no impact at all or it could spark bad feelings.
Every business person understands the need to spend money to get new customers off the street. But for some reason they think referrals should be free. What the !!
Sorry, but it doesn’t work that way.
What you need is a Referral Machine. It’s something that’s intentional. This means there is a process in place that happens the same way every time. It is an investment. Most businesses have no problem spending on external marketing but don’t believe in internal marketing. A Referral Machine costs money to build, and there’s an investment to be made in running it continuously. It’s also integrated meaning it is a regular part of a business. It’s integrated for both customers and staff. It’s a part of your culture.
If you would like to build a referral machine that actually delivers referrals, please get in touch to discuss.