The Referral Method
by Torstein Erdal
Introduction
If you are struggling to get clients, and you don't like to do direct mailing or cold calling,
then getting referrals is a good way to get new clients. It's simply about getting others to
get you meetings.
Your clients as referrals
If your clients feel good about buying your service, and if feel good about themselves for
buying it, they will give you referrals.
Because they feel good about it, they want to let others know about it. And they will do it
for their reasons, not for yours.
The way to do this is to follow up after a sale. Most people don't do this, because they
are afraid there is a problem, or if the client is unhappy.
A little while after a sale, follow up with telephone and ask your clients if they are
benefiting from your service. If they are, you honestly praise them for their buying
decision. If you can remember something specific they did in the meeting that helped
them make the decision to buy, you can remind them of it. If you remember details from
the meeting (which they might have forgotten), and you remind them of that, you will
feel a lot more personal than everyone else selling services. It's smart to keep a file on
your computer where you write down these details after every meeting.
After this, ask them if they got the gift you sent them, if they haven t already thanked
you for it right away in the conversation.
Then you can ask if they know other people or businesses who would appreciate your
help.
If there's BAD news after the sale, it's GOOD information for you and for your client. Any
information you get, gives you an opportunity to help. They might get surprised when
someone actually wants to help.
If your behavior towards your clients is this good, they become your best referrals later.
Friends as referrals
Tell your friends about your services, and ask them if they know anyone that might need
them. And then you offer them a deal. If they can get you a meeting, and it results in a
signed contract or a check, they get 10% of what the client pays you. This can be very
much.
Let's see: If your referral can get you a meeting, and you get a new client for a 12-
month contract, paying you $1500 every month, then you get $18,000 from that client
every year. When your client has paid you for the second month, you then pay the
referral 10% of what you earn from the WHOLE contract, which is $1,800.
Only pay your referral if the client stays for two months or more. Because then you can't
lose money this way. After two months you have already made $3,000 from the client.
And when your referral gets $1,800 for ONE client by simply spreading the word about
your services, and getting you a meeting, they will want to get you more clients.
Advice here is: Only pay your referrals a one-time fee on the FIRST contract the client
signs. If the client stays with you for more than 12 months, you keep all the money after
that. Only pay the referral for the FIRST contract.
So if you get a six-month contract, you only pay your referral 10% of the overall sum for
those six months. If the client pays you $2,000 every month for six months, then you
pay the referral 10%, which is $1,200. So if it's a six-month contract, you can choose to
pay them after the first month, because the money you get from the first month is bigger
than 10% of the whole sum.
Another advice: Don't let the client know that your referral gets 10%. They don't need
to know. The client trusts the referral because of their recommendation. If they knew the
referral was getting paid, they wouldn't trust their words as much, and might not trust
them any more than they would trust a seller's words.
Contract for referrals
If you have serious referrals, have contracts with them.
Here are some points you may want to consider including in your contract:
·ð Referral gets paid only if the clients stays for 2 months or more
·ð Referral gets paid AFTER the client has paid you
·ð Referral only gets paid if they can get the meeting (An actual appointment). Don't
pay them if they only get you a lead (contact information about someone who
might be interested, and you have to get the appointment)
·ð Referral only gets paid 10% of what you get paid from the client, for the whole
contract the client signs
·ð If the contract with your client auto-renew, the referral only gets paid by the
period stated in the contract between you and your client, and not after it is auto-
renewed
How to get contracts written?
As I mentioned in The Direct Mail Method, you can get contracts for your clients by
offering your services to a lawyer, and in return they pay you by writing contracts for
you. You can also do this when you want to get contracts with your serious referrals.