Too many business owners know that referrals is where the life blood of new business comes from. At the same time many of us, including me just hate to ask for referrals because we don’t have a system to do so.
Listen while Steve helps us learn that having a great referral process is within all of our grasp. Here is some of the things you learn today:
- how having a great referral process allows you to be a little bit lazy.
- a simple system that will allow you to create a steady flow of referrals.
- How to make the uncomfortable referral process less uncomfortable.
- How the secret to a great referral process is having a gift that you can give potential prospects.
Narrator: Welcome to the Sustainable Business Radio Show podcast where you’ll learn not only how to create a sustainable business but you’ll also learn the secrets of creating extraordinary value within your business and your life. In the Sustainable Business, we focus on what it’s going to take for you to take your successful business and make it economically and personally successful.
Your host, Josh Patrick, is going to help us through finding great thought leaders as well as providing insights he’s learned through his 40 years of owning, running, planning and thinking about what it takes to make a successful business sustainable.
Josh: Hi. Today, I am really excited about who’s joining us for our conversation. Today, we’re going to talk with Steve Gordon. I have to tell you that I’ve been in the business world for about 40 years now and for 40 years I’ve been talking about referrals and why referrals are important for you. They are absolutely crucial. If you’re going to develop a successful business, you have to have referrals. For 40 years, I’ve hated referrals.
Today, we’re really lucky we’ve got Steve Gordon who is the author of Unstoppable Referrals: 10x Referrals for Half the Effort. I’ve read his book. I’m in the middle of his course right now. I can tell you that after looking at probably 40 or 50 referral programs, over the years, this one is far and away the best. He’s the editor of three newsletters. He’s published hundreds of articles on marketing. He is an expert at selling high-ticket items so if that’s something you’re interested in, we want to talk about that. He started off at age 28. He was a CEO of an engineering consulting firm and he has my sympathies for doing that. Twelve years later, after growing the firm 10x, he started a second business which is Consulting 101 with businesses across 30 different industries.
You’ll find that when you know about a particular process such as referrals, it’s not an industry-specific thing. It’s more a process. The fact is 80% of our businesses are exactly the same. In industry, it’s only about 20% different. He’s been in all sorts of works for a long time. I’m really excited to talk with Steve this morning. Let’s bring him in.
Hey, Steve. How are you today?
Steve: Hey, Josh, great to be here. Thanks for inviting me.
Josh: Oh, it’s my pleasure. Man, I have to tell you, I’m in love with your referral process because I am basically, at heart, a lazy person.
Steve: Well, we share that then, I guess. Yeah, most of the things that I create come out of the fact that I’m fundamentally lazy and I don’t like doing hard work.
Josh: Well, then I’m glad I ran across you. I’ve got to tell you, I love your book and I love your program. It’s really good stuff. I’ve done hundreds and hundreds of programs over the years, not hundreds on referrals but all sorts of programs, and yours is probably up in the top 10. So, tell me, how did you become an expert on referral marketing? It’s kind of weird place to be an expert.
Steve: Well, first, thank you for all of the nice things you’ve said. We’ll make sure and get that check in the mail out to you.
How I became an expert at this – really, kind of out of necessity early on in our first business. I mean, we were part of the 80% of businesses that say they have no system or process for getting referrals. Thankfully, we got a fair amount of referrals and we used what I call the “over-the-moon” method for getting referrals. We thought, “Well, if we just do an over-the-moon job and really blow people’s socks off, they’ll refer.” Some did and some didn’t. Some days the phone rang like crazy and other days it didn’t ring at all.
We really had no idea what the cause and effect relationship was there. When I took over that first business, that was probably the most frightening thing. Thankfully, we were in a good market and it was growing and things went well for us there but that was really where I started to investigate some of the stuff. And then, I left that business and started working with other similar types of businesses, selling pretty high-ticket, mostly services but some products, and working with them on their marketing and their sales processes because we’d gotten fairly good at it in my first business.
Really, it all kind of came about. I was teaching some workshops on referral marketing. Leading up to those workshops, I did all the research. I read every book I could find on referral marketing. They all sort of said all the things that we’ve been doing for over a decade and it boiled down to two things – you’ve got to ask a lot more often and you need to follow up for a really long time once you get that introduction to turn that referred prospect into a client. I thought, “That was great, I’ll go and teach that at these workshops.”
We did six workshops. We had like 300 business owners come through the workshops. Everybody loved them. They gave us rave reviews. Everybody left supper happy. And so, I went on about my business for about six months.
Six months later, I decided, “Let me go see how they’re doing” so I went and had conversations with about 20 of the people who had been through those workshops. I’ve got to tell you, it was the most demoralizing, depressing, just disappointing series of conversations I’ve ever had because not one of them had done anything with the information that we shared with them in those workshops. So, none of them got any results. That was sort of the whole point of putting those on.
As I started to look at this and see this in conversation after conversation, after conversation, I started asking questions like, “Okay, well why aren’t you doing this?” because you’re in this conversation. Six months later, you’re admitting to me that you know that you need to do all the things that we talked about in those workshops. You know that it’s going to have an impact, in a positive way, on your business and solve this problem you have called getting clients but you’re not doing anything about it, so where’s the disconnect?” That’s really where our current approach to referrals that I read about in a book that I teach in our course and that we do one-on-one with clients. That’s really where it came from, was that kind of like, “Oh, you know, Gosh, we’ve taught what everybody thinks is the right method and nobody’s using it.” I guess, my technical background kicked in and we started realizing, “Well, if you’ve got a solution, even if it’s the right solution, if nobody will apply it, what good is it?”
Josh: Okay, so if the standard way of doing referrals doesn’t work, in a nutshell, what is your system?
Steve: The reason that the standard way—and it’s not that it doesn’t work, it works great if you do it. That was our experience leading up to that point because we were doing those things. We built the systems for asking our clients for referrals into sort of our regular processes and it does work. That’s why so many people write about it.
The disconnect is that it works really well if you’re part of the 4% of people on the planet that are sort of natural at sales. If you’re part of the other 96%, having a conversation with a client that is probably paying you a lot of money, who you feel like you’re grateful to have their business and then going back to that client and asking for yet something else from the relationship, that’s an uncomfortable conversation. It’s uncomfortable for you. It becomes uncomfortable for the client because they’re probably in the 96% of people that don’t like to have sales conversations.
What you’re asking them to do is really go out and be a salesperson for you and go out and prospect for you and at least sell to the point that someone will take a meeting with you. That’s a difficult conversation for them to go have – not to mention the fact that it is fraught with risk if you follow sort of our old fashioned model of referrals. You know, imagine you’re going to one of your clients and you’re asking them for referrals. The first person that they think of who maybe has a problem that you could solve is a client of theirs and that client is worth money to them. Maybe, they’ve been worth money for years in and the past and they know that they’re going to be a client for years in the future. And so, now, they’ve got to weigh, whatever that dollar amount is, that they could lose if you mess up when they make the referral. They’ve got to now weigh that against what’s the upside.
When somebody makes a referral, makes that introduction about all the upside that exists, is some increased social capital. You’re going to like them a lot more and the client that they refer to you is maybe going to like them a little bit more if they get the problem solved but that’s all the upside that there is. The down side is enormous. There’s damage to reputation. There’s certainly business risk if they’re risking people that they do business with. There’s all kinds of issues there that are preventing you from getting referrals.
And so, what we’ve started to figure out was that rather than going about it in that sort of contrived model, that we needed to change the dynamics so that the very first step that happens when you go and try and get a client to refer you, the first step shouldn’t be a sales meeting. In the old fashioned way, that’s really what it is, you’re asking for an introduction and you’re probably going to have some kind of a one-on-a-one interaction with that potential client, with that prospect. We call that a sales meeting and nobody wants to go into a sales meeting.
I mean, I sell for a living. You sell for a living. I don’t want to go into a sales meeting. I like to buy stuff. I mean, even when I go buy a car, I avoid talking to the car sales guy like the plague. If I could just order the thing on the internet with everything I wanted for a price, I’d probably do it every time.
What we found out was the solution is just to remove this barrier – the sales meeting, because it’s creating all kinds of pressure on all three people involved – particularly, pressure on the client that you’re asking to make the referral. It makes them freeze because you’re asking them to do something that makes them uncomfortable. Oftentimes, just the act of asking makes you uncomfortable. In its place, we replaced it with a lower commitment entry point. That’s really the solution to simplifying and unlocking the referral process.
Josh: When you say a lower commitment—by the way, I agree with everything you just said because although I’m a great connector and I love introducing people, I’m always really, really nervous when I do a referral because if they do a lousy job, not only is my reputation hurt but my client relationship with the person I’ve referred to could also be hurt. Even for somebody like me who loves doing this stuff, it’s fraught with all sorts of danger and you’re correct. So, how do you take that away?
Steve: Well, what we’ve figured out was, if we could change the dynamics so that we’re not going out and really proposing that we’re going to take something again from our client relationship and take this introduction and instead we come up with a way to give something through the client that we start to get some powerful forces aligned and working for us. And so, the thing that we came up with as this gift, through the client, is really to package up the information that you would normally give to a prospect, deliver to that prospect, in the sales process.
You talk with them about the problems that they have, all the sort of diagnostic stuff that you’d normally go through with a prospect – the problems that they have, the results that they want that they’re not able to achieve, the consequences of those problems, if they don’t act and fix them, what’s going to happen so that they’re educated on that. And then we also try and address a lot of the questions that would normally come up in the sales process.
We put all of that together and package that information up into what we call a referral kit. A referral kit might take the form of a short book. We’ve done them really short. Calling them a book is little bit generous. We’ve done them as short as 12 typed pages and we’ve called it a book. It’s worked really well.
We’ve done them as audio interviews. So, much like we’re having an interview here, you would get someone to interview you and it’s really easy to get somebody to interview you. I talk about how to do that in the book, and in the course, but you record that. And in that interview, you share a lot of really valuable information. For someone who would be a good prospect for you, they would listen and then go, “Wow, this like really addresses all problems that I’m worried about.” So, you package it up in any sort of different format like that. We often use webinars and seminars as sort of first steps to creating a referral kit. There are a lot of different formats you can put them into. And then, we deliver that through the client.
And inside the referral kit then is what we call “the next step offer”. With the next step offer, you’re simply just telling them, “Okay, if you’ve consumed this information and you identify with this information – in other words, you recognize that you have this problem and we’ve shown you a little bit of the solution in here and you recognize that the solution is desirable for you, here’s how you take the next step.” Well, that’s where we re-introduce the sales meeting. All we’re doing is really moving it from step one, in the referral process, to step two in the referral process. We’re sort of pulling it back a little bit. What that allows your client to do is it allows them to now do something that has no risk whatsoever.
Imagine the last time somebody gave you a book as a gift, no matter what topic it was on. Chances are, you were never offended by that act. Even if it’s a book you’re not interested in, you’re going to look at it as “Well, thanks so much for thinking of me.” You’re going to think to yourself, “Well, this is great. I’m not super interested in this but it was nice that the person thought of me.” And because passing on information that’s packaged up – especially if it’s packaged up in physical form like that whether it’s a book, or an audio CD, or any of the other formats that we teach, it carries with it this perception that it’s a valuable gift that you’re passing on to someone. It changes the whole dynamics.
Now, your clients go, “Great, I’ve got something. You know, I’ve wanted to help you all along, I just didn’t want to go have referral conversations the old fashioned way but you mean, I can just give this book out, or give this CD out and people will like me for giving them something. And if they hear it and it resonates and they want to do business with you, they’ll come back and find you.” And so, it’s a really easy way to remove that barrier.
It’s really funny to watch because we will see with our clients, they’ll go out to clients of theirs who have never before referred them and they’ll make this sort of offer of a gift to the client’s network and clients that have never referred them before will just instantly jump at the chance because they wanted to help, they just didn’t want to have to go through the hard process that we normally give them as an option to refer.
Josh: Interesting. This is kind of an off-topic question I’m going to ask now. It’s because many of our listeners are in the financial services world and part of what you recommend is, you have testimonials in your referral kit. In the financial services world, you can’t use testimonials. (a) Is that a problem? and (b) How do you get around it, if it is?
Steve: We work with a tremendous number of financial advisors so I’m really familiar with that world and the issues of compliance and all that go along with it. When we do this with financial advisors, we do not include testimonials or case studies because it’s forbidden. We find that it works just as well. That’s one of the most frequently asked questions that we get about the process.
It takes two forms. They’ll either say, “I’m in a highly-regulated industry and we’re not allowed to use them. And so, will that make this strategy ineffective.” We have seen and proven with our clients in financial services that it really doesn’t reduce the effectiveness of the process at all.
The other side of that question is, from people who are just sort of starting out and they may be are in an industry where they can use testimonials but they haven’t been in business long enough to get them. What we tell people is just, “If you can’t use them, don’t worry about it. Put the kit together. Put the other parts together – there are four parts—I kind of touched on them earlier, but put those parts together and run with it because you’re going to get results with that.” If you can use testimonials and go get them and add them in later, do that because it helps certainly to have them but we haven’t seen any kind of measurable difference with them in or out.”
Josh: Yeah, I can see where that would make sense. I mean, when I buy stuff myself, I almost never read the testimonials. I guess, for some people, they’re important. For me, not so much.
We have time for one more question, Steve. This thing about reverse prospecting, I mean, what the heck is that?
Steve: That is one of our secret weapons. And so, if I share it we have to all promise to hold hands and keep it in the family.
Josh: I’m bring the code of silence in right now.
Steve: Yeah. Reverse prospecting is a technique that I actually learned from one of my very first clients. He’s actually a financial advisor, had been an MDRT for 35 years, top of the table, all that kind of stuff. I actually learned it from him so I’ve got to him credit.
The way that it works is if you’re going to meet with a client, you probably know things about that client. You know what organizations may be they’re in, kind of who they hang around. And, if you can go and find the names of some of the people that they are likely to know and put it in front of them, then you’re going to instantly get many, many more referrals than if you just sit there and ask them, “Do you know anybody?” Or even if you get more specific than that and say, “Hey, who in your Rotary Club would be interested in something like this?”
Just to illustrate that, with an example, I had a client who was in the financial services. His target clients were doctors who were like at the end of their residency. He had a number of these clients. And so, on one of our coaching calls one day, he said, “I’ve got a call with one of my very best clients coming up after our call, how should I approach this?” And so, I said, “Well, here’s what you do.” He just finished his referral kit which was this short little book. I said, “Here’s what you do. You go—really quickly, we’re going hang up right now, so you can do it before your meeting. You go to the web site of the hospital where your doctor client works and whatever department he’s in. The guy happened to be an oncologist. You go to the Oncology Department and you print the list of the doctors that are in that department. Print two copies. When you have your meeting with your client, at the end of the meeting, say, “You know, doc, you’ve always thanked me for the work that we’ve done together and told me how grateful you are for protecting your finances and taking care of these issues for you. I know that there are people that you’re working with that haven’t addressed this. I’ve put together this little book that really will educate them on the challenges that they’re facing and tell them about the solutions. Some of them are the solutions that we’ve created for you and worked on together. What I’d like to do is I’d like to give this book to them as a gift from you. I’ve got this list here of the people that you work with in your department. Here’s a highlighter, who do you think on this list we should send this to together as a gift from you?”
This is a client that was his best client but had never referred him. I get an e-mail like an hour and a half later, the subject on his e-mail is 11 – just the number 11. I opened it up and I go, “What in the world is this?” First sentence, that’s how many referrals I just got doing what you said to do.
We see that again and again and again. He went on and continued doing that and ended up with 98 referrals in that first month doing that with his other doctor clients. Really, it was almost more referrals than he could handle. And so, some of them wanted to do business right away. Others weren’t ready yet but he established a very powerful relationship with them as the creator of this information. He appeared as an authority and then he got permission to then follow up with them over time. And so, so that’s what reverse prospecting is. It’s really just doing the leg work of prospecting for your clients and giving them the names, and then all you’ve got to do is say, “Here’s a highlighter, can you tell us who we should send this to?” That way, they don’t have to think. You’ve done all the leg work for them.
Josh: Cool. Steve, we’re out of time. Boy, I wish we could go longer. We might even have you back for another session with us some day. I know that people are going to want to know how to contact you and how to enroll in your courses. Can you tell us how that can happen?
Steve: Absolutely. The best thing that they can do is they can do to unstoppableceo.net. Right there on the home page, they will see a link to a free six-part course on referral marketing. I would recommend that they start there. And then a little bit further down on the homepage, there’s a link to get my book. You can get it on Amazon. It’s available on Amazon, both in hardcopy and in Kindle format. But if you want the hard copy, I highly recommend you get it from our site. It’s right there on the homepage. What we’ll do is, if you send us a penny and cover the cost of mailing it to you, we will go ahead and send you the book for a penny plus the cost of the shipping. And so, they can find out about that there.
Josh: Steve, thanks so much for being with us today. The information you gave is really important. To those who are listening, reverse prospecting is a magic bullet. Learn how to use it and use it well.
Thanks so much.
Steve: You’re welcome. Thanks, Josh.
Narrator: You’ve been listening to the Sustainable Business Podcast where we ask the question, “What would it take for your business to still be around 100 years from now?” If you like what you’ve heard and want more information, please contact Josh Patrick at 802‑846‑1264 ext 2 or visit us on our website at www.askjoshpatrick.com, or you can send Josh an e-mail at email@example.com.
Thanks for listening. We hope to see you at The Sustainable Business in the near future.