What Really Triggers a Referral?

Posted by: John Jantsch on May 19, 09
Wish we had said this...but John said it better than we ever could!

Referrals most naturally happen when two people are talking and one of the parties expresses a pain in the neck. If the other party just had her pain in the neck fixed, she may very well say something like, “ooh, you just gotta call Bob, he’s the best pain in the neck fixer on the planet.“

Right? We’ve all done some variation of that exchange in making or receiving a referral.

Problem is, we don’t spend enough time teaching our customers and referral sources the types of complaints, frustrations, challenges, and situations our customers generally espouse when they are actually in the act of qualifying themselves as a great referral

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Here’s what I mean. We ask our customers and referral sources if they know anyone who needs a fully optimized, solutions driven lawn manicure specialist, when we should probably be asking them if they know anyone whose dog keeps getting loose because their lawn service always leaves the gate open.

I believe any salesperson worth their salt has developed a list of phrases, situations, and verbal clues that, if heard during a sales presentation, signal it’s time to take the order.

The same idea is true of a qualified referral.

My belief is that the best way to make it easy for people to refer business your way is to develop a list of “trigger” phrases that experience tells you are the exact words your prospects utter when they need what you’ve got.

For example, if you sell accounting software, it’s rare that a prospect might walk up to a golf buddy and say, I sure wish I had some better accounting software.

But, he might say – “I have no idea how healthy my business is because we never have timely data”, or,”I feel like I’m being help hostage by my accounting firm,” or “we keep everything on spreadsheets and it’s a real hassle to update.”

In many cases these folks don’t have any idea that your accounting software is the answer, but you do, so these utterances are your invitation to save the day.

Spend a couple hours brainstorming with anyone in your organization who has customer contact of any kind or call up a dozen customers and ask them to identify the true value your firm brings them. Creating a top ten list of trigger phrases that everyone in your organization and anyone wishing to refer business could use as the perfect way to spot your ideal customer.

Then, clean this list up and create a document you can use in your marketing education processes. (This might end up being the best internal sales training tool you’ve ever created.)

Take it a step farther and publicize this content in your marketing materials because it’s likely that a prospect might be saying these exact things to themselves as well.

Close the loop on this process by also creating some tools, like gift certificates, special referral offers, or coupons, that your referral sources can use any time they hear a trigger phrase.

Prospect: “I’ve been waiting over a week for my lawyer to call me back.” – Referral Source: “Really, my attorney calls me back within 24 hours guaranteed – here’s her card, because I recommended you she’ll review your first contract for free.”


Image credit: dearbarbie

How to earn the money you are worth

Yesterday I spent an hour with a new client we’ll call Jasper who is uniquely qualified in his field, which is coaching up-and-comers in the music business. He provides fantastic value, but his potential clients are switching careers and he’s not sure what to charge. What can they afford at this precarious time in their professional lives?

He created a good, strong package of services, and priced it at $2500 payable over 3 months. Then we examined his approach using this series of questions:

1. How much do you need to earn this year to support your family? A: $100,000
2. How much does that work out to per hour, based on billing about 1,500 hours a year once you are up and running? A: $100,000 divided by 1,500 is $67 an hour
3. Does that cover your business expenses as well as your personal and family expenses? A: No. I’ll have to pay for my web site, ads, printing, travel…all that will add another $25,000 at least
4. So to just break even you need to earn $125,000 or $83 an hour? A: Yes
5. How many hours per client will it take to deliver the coaching package you’ve created? A: 60
6. So what do you have to charge for it? A: 60 hours x $83 = $4,980
7. How much more can your clients make on average per month after working with you? A: Minimum $2,500
8. So you are asking for less than 2 months of the incremental income you are going to create for them – does $4,980 feel “right”? A: Sure does!
9. How many clients will you need at that rate to earn $125,000? A: 1500 total billable hours divided by 60 hours per client is 25

Jasper was about to charge about 50% of what his program was worth! If he had gone forward with a program price of $2,500, he would have worked for $42 an hour, 50% below what he needs to bring home and way below the value he creates for his clients.

His only hope would be to double the number of clients he works with, a recipe for disappointment and ending up overworked, exhausted and broke.

Jasper cannot earn the living he needs to working with people who can’t afford to pay him what he’s worth. Neither can you.

Do the same calculations that Jasper did, and find out what you are really worth. Then focus on finding clients who value what you do and, very politely, decline to work for anyone else. It may be scary to contemplate, but there is really no option.

Expertise and the Curse of Knowledge Could Be Killing Your Lead Generation

Our coaching clients are pretty diversified. On the books right now we have a consultant who helps high tech companies get new products to market; a coach for wanna-be musicians; a small-business technology provider; and the team at a training and development company. They come from Atlantic Canada and New York City, big metropolises and small towns.

Aside from wanting to grow their marketing potential, these clients have one thing is common: they are experts in their fields.

And that's a pity, because the other thing they have in common is that their expertise is sabotaging their chances of success.

Why do we say that? Here's a case in point from a coaching session we had this morning. We asked our client (let's call him Jasper) why people would want not only to buy his products and services, but pay an above-average fee to get them.

Jasper gave us twenty-two reasons, almost a whole 8-1/2 x 11 sheet of paper.

One thing we know is that a prospect for Jasper's services will not only not read all twenty-two reasons, he or she will not read ANY of them. One glance at a page of closely-typed 12 point type will turn any prospect off, no matter how much they might ultimately benefit from the services.

To understand this, let's have a look at Chip and Dan Heath's Made to Stick. We are big fans, so much so that we incorporate their ideas into our work. They call this phenomenon the Curse of Knowledge.

Once we know something, we find it hard to imagine what it was like not to know it. Our knowledge has "cursed" us. And it becomes difficult for us to share our knowledge with others, because we can't readily re-create our listeners' state of mind.

CEOs and frontline employees, teachers and students, politicians and voters, marketers and customers, writers and readers rely on ongoing communication, but suffer from enormous information imbalances. When a CEO discusses "unlocking shareholder value," there is a tune playing in her head that the employees can't hear.

It's a hard problem to avoid — a CEO might have thirty years of daily immersion in the logic and conventions of business. Reversing the process is as impossible as un-ringing a bell. You can't unlearn what you already know.

There are, in fact, only two ways to beat the Curse of Knowledge reliably. The first is not to learn anything. The second is to take your ideas and transform them.

Right now, before the excitement wears off, go to Made to Stick and start reading. Buy the book. Tell us what you think.