I get asked the question above plenty. The answer is really easy: People refer people, products, services and companies because they like to, it makes them feel good, it’s just 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 about the same way they make purchasing decisions. People decide something is the right price, fits, addresses their need – the logical part, and then, they determine they will look good, have more life, impress their friends – the emotional part.
Here’s the tough part – they usually do it in reverse order – they get hooked emotionally and back it up with logic.
So, in order to have your business considered as someone worthy of a referral, you need to tap the logic and emotion formula – maybe in equal parts. In other words, 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 firms that get lots of referrals have a good solution mixed with a fun or unique solution.
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 their and start offering any kind of incentive for referrals.
If you are not getting referrals naturally, you may need to focus a great deal of attention on cracking the logic and emotion code for your clients.
Now, you may be saying, this is a serious business, there’s nothing fun about this business, well, then think of the ways that your serious business can make a genuine emotional connection with your clients and make that one of core elements of your business.
Once you have these logic and emotion parts down, then make sure it’s easy to refer you – create tools, education, and follow-up systems and you are ready to rock the referral world.