Is Asking for Referrals Right for You?

For professional services firms that are trying to increase business, referrals are the go-to source. In fact, our 2015 Marketing Priorities Study discovered that 62 percent of firms cite generating referrals as their highest marketing priority.

So how do you get more referrals?

The business development pundits give the impression that, if you simply ask for referrals, they’ll come tumbling in. But is this advice grounded in facts or teetering on the edge of faulty assumptions? It seems that many professionals are unsure of the answer to this question.

Despite all the advice, professionals are reluctant to ask for referrals. Often, they feel uncomfortable. It turns out, their gut feelings may be trying to tell them something. There are good reasons for their concerns.

Let’s take a look at both sides of the “Should you ask for referrals?” fence.

The Case for Asking for Referrals

It Makes Sense

There’s an adage, “Ask and ye shall receive.” It makes sense. How would your client know you want referrals unless you ask them? So ask.

No Harm Done

Okay, so not everyone you ask will make a referral, but it’s a numbers game. Right? If they do not want to make a referral, no harm done. After all, there’s another old saying etched in our minds—“It doesn’t hurt to ask.”

But, then again, there may be holes in this deep-rooted maxim too.

Referral Marketing Study

The Case Against Asking For Referrals

Professional Services Are Different

While it may be perfectly acceptable for many salespeople to ask for referrals, it is often inappropriate for professional services providers.

Think about it. Should a bankruptcy attorney ask for the names of people who are mired in financial difficulties? There are issues of trust and ethics to consider. In some situations, direct solicitation can even be illegal.

It Doesn’t Work That Well

When we dug into the data from our recent Referral Marketing Study, we discovered the “…ye shall receive” theory rarely applies to referral marketing. When we asked 1,100 professional referral sources whether they would be willing to make a referral if asked, only 2 percent  said they would.

Yikes, that is not very promising!

A 2 percent success rate may seem acceptable when you compare it to standards for a direct mail campaign. With direct mail, 1 percent is often seen as a success. But that’s because you’ve already calculated that response level will generate a decent return on investment. The only risk is the cost of the campaign.

It’s not as impressive, however, when asking for referrals because relationships are at risk. And relationships can be invaluable.

Asking for Referrals Can Damage a Relationship

When you ask for a referral, you’re requesting a favor. If they feel uncomfortable referring you, it can put a client in an awkward position. Also, while they might comply, by asking for the referral, you have shifted the lens through which they view you. In their eyes, you are now a “salesperson” rather than a professional with their best interests in mind.

Do you want to gamble with your relationships for a 2 percent chance of a referral?

Other Tactics Work Better

Here is the good news the gurus are not telling you. Asking for referrals is not the only way to get them. There are other techniques. Even better, these techniques produce much higher success rates.

Our latest Referral Marketing Study discovered that making your expertise visible plays the single most significant role in driving referrals. More than 80 percent of firms receive referrals from people they have not worked with in the past. Almost all of their referrals (94.5 percent) are based on a firm’s reputation and Visible Expertise.

You can become a Visible Expert by speaking, blogging and creating content in an array of formats. So, if you’re uncomfortable asking for referrals, you don’t have to do it. Simply show what you know.

SEE ALSO: Study Reveals the Role of Reputation and Relationships in Referral Marketing

Finding the Right Balance

As you seek equilibrium on the question of referrals, consider why people make referrals to professional services firms in the first place. First and foremost, they want to help a friend or colleague who needs a professional service.

They do it for the buyer, not the vendor.

So, by asking for referrals, we’re trying to go against the current of how referrals happen. It’s easier to flow with the current.

Understanding this dynamic is critical because it enables you to see how you need to do things differently to get referrals from clients—without asking. Of course, you need to have solid client relationships, but your clients also have to be aware of your firm’s expertise, what you do and how it applies to client problems.

Yes, even with your own clients it comes back to Visible Expertise. When they know the problems your firm can help to solve, you’ll naturally come to mind when a colleague asks, for example, “Do you know a company that can help me to hire a new chief information officer?” Then, they’ll be able to make the appropriate referral.

Despite all I’ve said that might tip the scales against asking for referrals, there are circumstances where you may be in a position to discuss your interest in gaining new clients. You can do this with clients as well as other professionals with whom you have a strong social relationship. Perhaps after you’ve wrapped up a meeting and are chatting about your respective businesses. Or over lunch.

In those situations, you can express your desire to get referrals without putting the client on the spot. It could even be appropriate to request a specific introduction to someone they know.

But the watchword is appropriateness. Go with your gut. If you do not feel comfortable, forget the pundits and the adages. Asking for a referral may well be the wrong thing to do.

Additional Resources

How Hinge Can Help

It’s time to rethink your referral marketing strategy. The Visible Firm℠ is the leading marketing program for delivering greater visibility, growth, and profits. This customized program will identify the most practical offline and online marketing tools your firm will need to gain new clients and reach new heights.

Referral Marketing Study