I get asked the question often. The answer is really easy: People refer people, products, services and companies because they like to, it makes them feel good. It’s human nature. The problem with this question and its answer from a business building standpoint is that it’s not that helpful.
The far better question is “Who do people refer?” Answer that question and you will be more prepared to take advantage of this powerful marketing tactic.
People make referral decisions the same way they make purchasing decisions. They decide something is the right price, that it fits and addresses their need — the logical part. Then they determine that they will look good, have more of a life, impress their friends — the emotional part.
Here’s the interesting part: They usually do it in reverse order. People get hooked emotionally then back it up with logic.
So, in order to have your business considered worthy of a referral, you need to tap into the logic and emotion formula — maybe in equal parts. People have to believe you can help, have a great price, and will show up as promised (logic), but they must also feel good about helping you, trust that their friend will be treated well, and like the experience of doing business with you (emotion.) It’s not enough to have a good solution. The firm that gets referred often balances the emotional tug with the logical choice.
That’s why money offerings alone for referrals are poor motivators. (In fact, cash may only motivate less than ideal referral sources.) Far better to work on making your business more likable, more referable, more energetic — before you go out there and start offering any kind of incentive for referrals.
If you are not getting referrals naturally, you may need to focus your attention on cracking the logic:emotion ratio for your clients.
Now, you may think you have a serious business; there’s nothing fun about this business. Then the challenge is to think of the ways that your serious business can make a genuine emotional connection with your clients and make that one of your core business elements.
Once you have these logic and emotion parts down, make sure it’s easy to refer you — create tools, education, and follow-up systems and you will be ready to rock the referral world.