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Why Clients Don’t Refer ?!!

It is common belief that when it comes to growing a business, to obtain referral from existing clients is the best way to go. In this context, I have heard several people say that obtaining a referral from an existing client is approximately 5 times easier than finding a business ourselves. Whatever the beliefs or the numbers, the underlying point here is that ‘referrals work better’ from which we can safely conclude that we should be focusing on getting the referrals and who better to refer us than our existing clients because they already trust us.

With that being said, do our clients really refer us?

Referrals

In my experience, the answer is yes for a very few of us. In this blog we
are going to look at the reasons for the same.

The reason for our clients referring or not referring us can be divided into two categories:

  1. Technical Reason of Referability
  2. Behavioral Reasons of Referability

From the two the blog’s main focus area is the Behavioural Reasons. We will spend just a little time on the Technical Reasons to put things in perspective and then move on to the Behavioural Reasons.

Technical Reason of Referability :

Some of us tend to be in businesses that are naturally referable. It the nature of these businesses that make then easy to refer. Few characteristics of the such businesses are

  • Usually low average ticket value, that is we need to spend relatively lesser sums of money to buy the products and service.
  • Low risk factor, that is if we bought a product of service and it did not deliver on the expectation, the implications are fairly low risk.

Examples of such business are Gifting solutions, chocolatiers etc. An above average quality of the product and an above average service go a long way in making such businesses referable.

On the other side, businesses such has Chartered Accountant, Financial Planner, etc. are naturally difficult to refer. They tend to have a higher average ticket value and even higher risk factor. In such cases, exceptionally high level of delivery is required to build trust that makes business referable.

It is important to understand that there isn’t much we can do about the Technical Reasons of Referability, our businesses are where they are. There is however a lot we can do about the Behavioural Reasons.

Behavioural Reason of Referability :

Behavioural Reasons, as the name suggests are our behaviours that impact our clients ability and willingness to refer us. And  this includes two key reasons why our clients don’t really refer us:

  1. We Don’t Build Referable Relationships

As much as we may not like to believe, there is something called referable relationships and the onus to build them falls on us. So many of us are busy everyday in delivering our product / service with an ever growing focus on constantly improving our service standards and in doing so we completely lose focus of building referable relationship with our client(s).

Sadly enough, it commonly believed that a great product combined with great service is enough. Sorry to be bursting your bubble but these days ‘great product packed with a great service’ is minimum expectation of our clients. And for this referring us ahead is not a priority for them because they believe that they are paying for it.

In order to get our clients to refer us ahead, we need to build referable relationships with them. Building of Referable Relationships start with building relationship that are above the transaction of we offering a product / service and our clients paying us for the same. We need to get our client to know us, like us and trust us as individuals too and just as a vendor / service provider

  1. We Don’t Ask

Many a times, we have built good relationships with our clients but feel hesitant when it comes to asking for referrals or just don’t even think about asking for referrals. Because we don’t ask, we don’t receive. It is important that before we ask our clients for referrals, we must build relationships where a client would want to honour our request for referrals.

In my research, I have often asked business people if they think about referring their suppliers and if not then why? While the answer is hardly ever one reason, what is interesting to note is that more often than not there is a common response “we didn’t know we were supposed to” or “they never ask for referrals”.

Please note that creating a referral for someone takes time and most people would end up not doing so because of the time involvement. Combine this with us not asking for them, we can’t really blame our clients for not being inclined to refer us ahead.

Conclusion

While the nature of our business will play its role, it’s important that we factor building referable relationships in our networking strategy (again making a case for having a networking strategy). It is important to remember that client when happy would want to refer us, it is on us to build referable relationships and earn the right to be referred.

 ABOUT THE AUTHOR

Paritosh is a Strategic Networking Expert who coaches individuals and businesses in adapting networking as a strategic activity at both personal and professional level. He has trained hundereds of business owners and senior executives and is behind the sucess of multiple networking initiatives and platforms, including FarmersOnly, a networking platform for business owners and CXOs from across industries to come together and build strong networks, Paritosh is also writing his first book on networking and has plans to develop 3 more networking platforms.

CONTACT

www.paritoshpathak.com

contact@paritoshpathak.com

+91-9810975133

Contributed By- Paritosh Pathak

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