Oops, I just got another referral...

By Jared Smith

When Henry started his oilfield services business in 1998, he called a few of his pals from the industry (Jack, George, and Bill), told them what he was up to, and suggested they consider him. By some fluke (because, he admits, he really didn't know what he was doing at the time), Bill hired him. Elated, somewhat surprised, and bound and determined to prove himself, Henry did the best job he could for Bill, and—guess what?!—a few weeks later, one of Bill's friends gave him a call. Henry was in business!

Almost every business seems to get started this way. If you do a good job for a client, the client tells a friend, and, before you know it, your business is growing by way of referral.

A US-based marketing firm recently asked over 1700 business owners and marketing managers whether or not they had a referral program in place in their business. All of them said, 'No'. And yet every one of them proudly and somewhat defiantly stated, "Referrals are the biggest source of our business!"

In other words, most referrals come as a complete mistake: "Oops, I just got another referral... Wonder how that happened?!"

If you're doing good work that may lead to referrals, you have two options. The first is to keep doing your job and just stumble upon referrals. The second is to make the most of the opportunity for growth by taking heed of a valuable tip offered by John Jantsch, author of top-selling Referral Flood: "The greatest marketing secret of the most successful business owners is that generating a flood of referrals takes a systematic approach."

Don't have a systematic approach? Here are some easy steps to build your own referral system:

1. Define your objective for new relationships. What does your business need—new clients, employees, suppliers, advisors?
   
   
2. Identify the specific definition of a good referral. (Tip: Practice presenting this definition.)
   
   
3. Identify who you are going to ask for referrals. (Tip: Look beyond your existing clients.)
   
   
4. Schedule in-person meetings with potential referral partners. (Tips: Don't delay. Ask for their help. Use humor.)
   
   
5. Present your definition of a good referral. (Tip: Be clear and concise but keep things informal and comfortable.)
   
   
6. Ask for three referrals during the meeting. (Tip: Asking for "some referrals sometime" won't get you anywhere!)
   
   
7. Thank the referral provider. (Tip: Don't bribe your contacts, just thank them!)
   
   
8. Keep your referral contacts in the loop. (Tip: People want to know how things turned out, good or bad!)
   
   

If you need some inspiration to get you going, imagine how your business could improve if 10 people each provided you with two excellent referrals over the next three months. What would that mean to your business?

Three months ago, we asked Henry that question. Today, he's kite surfing off the coast of the north shore in Maui, singing a traditional Hawaiian song called "Goin' to the Hukilah" (he's a terrible singer though...).