This is the transcript of episode 4.
Click here to visit the full episode page and listen to the interview.
Andy, thanks for coming on the programme. I thought we’d talk this morning about your book which I have in front of me here. It’s called ‘Recommended,’ and the subtitle is ‘How to sell through networking and referrals.’
It’s published through FT Prentice Hall, which is the Financial Times’ publication.
I’d like to start first of all to understand what exactly inspired you to write the book?
‘Recommended’ is my third book. So it was something I had done before, but it’s not something that I do on a regular basis. It was the first unique book I’d written for five years when it originally came out.
That’s because I don’t believe in writing a book for the sake of it. I believe in writing a book when you’ve got something to share. I see so many organisations that treat referrals which a huge amount of complacency.
We invest time, resource, energy, effort and money into almost every form of new business generation – whether it be marketing or sales – so that’s whether you employ a PR consultant, you spend money on advertising, you have cold calling teams.
We strategise those areas of our business, but when it comes to the most effective source of new business for most organisations, which is word of mouth and referral, so many people leave it to chance.
So this was my opportunity to say, “Stop and Think. This is important to your growth. It’s important to your business. Isn’t it time you treated it seriously?’ A book is a great way to get those thoughts out.
Why do you think it is that people ‘leave referral to chance?’
I think that we’ve bred this complacency over the years. There’s a very lazy understanding or belief system that if I do a good job, people will refer me.
A lot of people in business think that’s all you need to do to get referrals. If you do a good job, you can expect your clients to pay you, but that doesn’t mean they’re going to refer you.
You don’t deliver your service and then your client goes away and ignores everything else they have to do to think proactively about how they can help you.
If you have a good haircut, you don’t go home and sit at your kitchen table and think, “Right, who else do I know who needs a good haircut? I need to tell them.”
If you eat a bad meal, you’ll tell everyone not to go there. If you eat a good meal, you might tell a couple of people in passing, but you’re not going to be proactive looking to refer that restaurant.
So it’s a very complacent, arrogant belief system that gets people off the hook. Besides, we don’t like investing in getting results.
We like short term results that involve as little work as possible. Referrals require investment and patience and time.
When it comes to sales, people go for low hanging fruit – “Can I make a couple of quick calls, get a couple of sales and I get that super boost, I feel good about myself.”
It’s not a long term strategy, but we get a short term high. Referrals don’t give a short term high. You actually have to invest in them and they take time, but it feels great once they start flowing.
You quote a 2010 study which suggests that ‘customers who come to your business through a referral, spend more, remain longer as customers and have a higher life time sales value than those who come through other routes.’ Why do you think that’s actually true?
I should say that’s a 2010 study, because the book was published in 2011. The same would still be true now though.
If someone comes to you through referral, they carry with them what I call ‘associated trust.’
If you have been referred to them by someone they trust, they carry an element of that trust into that relationship with you.
If we source a supplier through our network, we’re less likely to shop around if we need anything else that that supplier provides again.
We don’t like shopping cold. People don’t like to find a plumber on Google. They like to find a plumber through their neighbours and that’s because we want reassurance.
Once we’ve got that reassurance, that’s bankable. People will stick with you even if you do a moderately good job.
I would hope you would do more and do better, but even if you do a moderately good job they’re less likely to leave. They need a bigger reason to start that shopping process all over again.
They’re also more likely to refer you because they come to you by referral. Therefore, by their nature they’re more open and amenable to the referral process and it’s a little bit of paying it forward.
They got referred to you. You did a good job for them. Therefore they might be more likely to do so again.
I would stress, don’t rely on that. Don’t be complacent. That goes back to my previous answer, but certainly if you ask them for referrals, they’re more likely to respond positively.
I believe you, and this makes complete sense to me. I’m just still a little bit unclear – why if people know this to be true, if they know that it’s actually so fundamental, so important to their business, do people still have this fear factor?
Why do people still hold back and maybe just convince themselves that what they actually have is something more than a simple lead. It’s perhaps just a tip, as you referred to in your book?
What actually is the psychology of fear, in this instance?
I think, to be honest, a lot of it is that people aren’t thinking about it. That’s the purpose of writing a book.
People don’t think about this stuff. If you look at marketing text books from 10, 20 years ago, they weren’t talking about referrals or word of mouth.
It’s never been taught, it’s never been talked about in the mainstream until the last decade or so. It’s not on the radar for many people.
There is an element of fear there as well. There is an aversion to asking. We worry about looking vulnerable if we ask for help.
We worry about being a burden to other people. Two areas that are very easily overcome, but I think that psychologically they do hold people back.
We feel awkward asking people to help us. We feel awkward asking to referrals. I think that there is that aversion there, that wall, but equally it is just not on people’s radar.
Sales is a short term game. I’ve been in cold calling sales. You’re judged on your results every day. You’re not judged on the seeds you sew that might come in six months’ time.
That makes sense. On the basis of a plan, let’s say with trainers listening to this programme, just people like you and me who need to people to refer them, not just to recommend them – and I’m really struck by the differentiation between the two terms which you’ve outlined in your book.
If you and I were to put together a very simple plan right now for a trainer listening to this, where would a self-employed trainer or training consultant begin to take on your ideas and put something practical and simple together?
Put very simply, I would sit down with them and I would say, “Who do you most need to get in front of? Who do you need to meet?” Draw up what I call a ‘referral mix,’ the mix of the introductions you’re looking for.
I would then look at why would those people want to work with you? Get into their headspace. What is the challenge you’re solving? What is the need you’re satisfying?
I would then look from the other side of the equation and there’s two approaches. One, is what I call ‘Prospect to Champion.’ We would look at that referral mix, the people you want to meet.
We would take one of those people. Let’s say it’s the Head of Learning of Development for a major bank. I would say, “Who do you know who might know them?” We can look at LinkedIn to see where the connections lie.
The second approach is what I call ‘Champion to Prospect,’ and say, “Who do you know who has all the elements to place to refer you, is in a good position to refer you?
Now who do they know that they can introduce you to?”
So we’d look at the two different directions. And then we’d look at what it would take to motivate, to inspire, to ask that person to refer you. Is their trust high enough?
Are they ready to refer you? Do they understand what you do? And then, what’s the best way to approach them?
Let’s define ‘trust’ for a moment. It’s a very important word. What would you say is the definition of trust for referrals to actually work?
In terms of referrals, there are two elements to trust that people need to have. Trust in you as an individual and trust in your product or service.
So if you’re looking at people from your personal network, they may well have the former but not the latter.
If it’s people from your professional network, it may be the other way round.
You need to understand how much of each element needs to be in place for a good referral to take place.
In terms of defining what that trust is, it means pure trust. The strongest level of a trust in referrals is that they want to refer you because they know you’re going to do a good job and they know that you’re going to make them look good.
They’re confident in that fact. They’re absolutely assured of that fact. I think in terms of referrals that’s the best way I can define trust.
You also referred to something in your book called ‘The Referral Book,’ and I think you’ve trademarked that. Can you explain what that means?
‘The Referral Book’ is the approach I use and the approach I teach. My referral book for most of my clients will start with five champions – people who would refer you.
Then you score on the three elements I touched on in the last answer. We’ve talked about trust. The other elements are understanding and opportunity.
So how willing are they to refer you, how able are they to refer you and how much of a position are they in to refer you?
You then look at what you need to do next to get them ready to refer. You’re scoring each of those three elements out of ten.
If it’s ten, ten and ten, they’re ready to refer. If it’s six, five and ten, they’ve got the opportunity but you need to build the relationship more and educate them better.
It’s all about taking them on that journey to where they’re ready to refer you.
Once they’re in that position, you ask yourself who do they know and how can they help? So you can start seeing the referrals you’re going to ask for – the support you’re going to ask for from them.
The other half of ‘The Referral Book’ is tracking the activity. What have they promised? What have you asked for? When does it come in? What have you done about it? What’s your follow up been? Have you said ‘thank you’?
You’ve outlined the whole template in the book on ‘The Referral Book’ method which is towards the second part of the end of the book. So in terms of trust, what would make someone change from being a passive bystander – someone who is perhaps just recommending you, to someone who’s actively referring you?
It’s a very individual thing. A lot of my work is not giving a drop down list of actions to take and this journey will take you to trust or to referrals.
Everyone is different, so their motivation is different. There are people who you can simply motivate purely by offering them a financial reward.
That’s not the approach I recommend, but it does have its place with certain people. A lot of people rush too quickly to that as a motivating factor.
With others, who are at the end of the scale, it’s about developing a relationship. Really building the relationship, getting to know them, getting them to want to help you.
In between, there are various things you can do, such as refer them. It doesn’t mean you put a quid pro quo on it. You’re not expecting something in return, but you know it’s going to grease the wheels.
I should stress you’re not doing it with expectation of return.
Taking them for lunch, taking them for dinner, getting to know them better, showing an interest in them, educating them about what you do.
If they are a client, it may be the quality of service that you deliver. Not just delivering a good service, but really surpassing their expectations and ultimately giving people a story.
We like sharing stories. If you give people something to share, that in itself turns into a referral.
The other thing that makes it really easy for people to refer you is to put it into context for them. Give them a clear idea of who you want to meet and why that person would want to meet you.
If you talk in generalisations the whole time, it’s hard for them to picture individuals and their network and make it relevant to them, but if you’re really specific and they see someone they know in their mind’s eye, then they’re halfway there.
I agree with you completely. One of the things that struck me in the last two weeks is the number of people who’ve been contacting me for a range of reasons.
I’ve been following some people on LinkedIn and I’m quite taken aback by the amount of effort which people put into dropping social media posts on LinkedIn on a daily basis.
I think to myself, if people have the time to do this – posting something on LinkedIn with the appropriate picture and links isn’t exactly something which can be done under five minutes – why do people put so much time into that and not enough time into actually lifting the phone and building the relationship – which as I think we both agree, is going to be more productive than spending a couple of hours a week putting posts and pictures on LinkedIn.
Why do you think people are still not doing this?
It’s a difficult one because actually a strong LinkedIn strategy can support your referral strategy. Posting interesting, engaging information is all part of that understanding element.
The referral strategy is educating your network about what you do and who you do it for, showing your expertise, building credibility and staying in mind.
So, I think as part of a strong networking or referral strategy, it can have a great deal of relevance. The question is, is it part of a strategic approach or is it people just doing something that feels right to them?
I think the answer to this question constantly is – are people doing it with intent and focus and a clear vision of what they’re trying to achieve and how they’re going to get there? Or are they just following the herd?
Another part of the book which I quite liked was the chapter on networking. In a very practical sense, if someone is going along to an event, they want to work the room.
They may not know anyone in the room. They may know a few people. Where would be a good place to start, to literally work the room, make contacts in such a way that you could perhaps bring to mind a relationship you have and use that as a basis for a referral?
The first thing to stress there is that you’re looking to sell through the room, not to the room. So, lose the sales mindset. Don’t look for people who are directly relevant to you.
You might meet them, people may buy from you at events, but don’t make that your reason for being there. Look for people you can build trusted relationships with over the long term.
So don’t worry what their job title is, just go, relax, be yourself, enjoy yourself and find people with whom you have something in common with, you have rapport. Once you’ve found those people, follow up and build the relationship over a period of time.
This is a long term strategy. It’s not short term, and that’s why a lot of people in sales are uncomfortable with it. It is a long term strategy, that’s the most effective referrals approach.
If you’re going to networking events, make it with a view to building your network and from that network getting referrals in the long term, not with a view to hunting.
I go because that’s my community. That’s my tribe and I learn from them and I get support from them.
I’ve got so much support for my business from the PSA over the 15 years I’ve been involved. It’s been the best investment for my business. I follow other organisations like the Learning Performance Institute as well.
I don’t go seeking to get referrals, but I do get referrals. I might get one or two referrals from people in the room who see me speak.
I spoke yesterday at an event for aspiring speakers and over dinner after, two people offered me referrals straightaway. It’s not the core reason I go there.
When I speak at something such as the PSA it’s giving back to the community that’s given me so much.
I’m just struck by what you’ve just said about people liking you. It’s funny how it comes back to motivation.
If people perhaps don’t like you, they’re not going to recommend you or refer you. How much does that rely upon the psychology?
I think this is what Robert Cialdini called one of the ‘principles of persuasion’ – which is the principle of liking?
How important is it to get people to like you before they feel that they want to refer you and basically put their name to your success?
I’ve had some interesting discussions in my workshops on this topic. There are some very divided schools of thought.
There are some people that say they would never refer someone they don’t like, but others have disagreed vehemently.
I think you’d be hard pushed to get referrals from people who dislike you, particularly if they dislike you intensely, but we have to understand the motivations to refer.
If you want people to support you and refer you and you want to reach out to them for referrals, the stronger the relationship, the more they want to do it.
So liking you is a key element of that, but people also refer because you’re the right solution to someone else they like. They might be referring for the other party in the equation, the prospect.
If there was someone I wanted to support and I knew the right person for them and I had a feel for who the right person to help them was, even if I didn’t particularly like that person but I was confident they could provide the best solution, I may well refer.
Do you set aside time in your working week to proactively refer people? Do you just decide off the bat to refer people on the basis that you may or may not get something back in the future or do you find yourself waiting for people to actually ask you to be referred before doing so?
There’s two parts to that question. The first part is do I set time aside? No, I don’t because I have a very strong referral reflex, so I constantly recognise opportunities to refer and I’m doing it all the time.
If that’s not natural to you, you need to exercise the muscle. You need to build the reflex. So setting time aside to refer and think about it, will help you do that.
It’s not something I do because I do it all the time, but for other people that may well help.
The other part of that is do I refer with a view to getting back, and the answer’s no. There’s no quid pro quo here.
My favourite saying is from a lady called Elizabeth Asquith Bibesco who is the daughter of the former British Prime Minister, Lord Asquith, who said, “Blessed are they who give without remembering and receive without forgetting.’
Give without remembering – receive without forgetting. That has to be the attitude.
If you can imagine a simple graph where on one axis you have the effort you put in to giving the referral, and on the other axis you have the value to the other person of that referral.
You split that graph into four quadrants. In one of them it’s high effort to you, low value to them. You put a big cross in that. There’s no point putting all that effort in if there’s no value to the other person.
If it’s of high effort to you and high value to them, then you might have a conversation about compensation. If it’s low effort to you and low value to them, I would let them decide.
So I’d put a question mark into that quadrant. But if it’s of low effort to me and high value to them, just do it.
My attitude is if I see an opportunity to make a connection, it’s going to take me a couple of minutes to ‘tee it up’ and put people in touch with each other, I’ll just do it.
The reason I asked that question partially, and your book answers this actually, is the principle of reciprocity, which is ‘do unto others as you would have done unto yourself,’ or quite simply put, ‘seek first to be the giver and then to be given.’
In other words, if you don’t actually give people things first, you could be waiting a long time to get anything back.
What you’ve just said – that quote which I’m actually going to write down and recall – I think it encapsulates the sentiment beautifully.
Yet, there is a temptation – and I’m sure people would agree – to somehow keep track of these things. I know that the human principle is that you perhaps shouldn’t, but is it not somehow idealistic?
Do you not agree that some people would nonetheless do things with the expressed purpose of somehow cultivating the reciprocal favour at some point in the future and maybe on that basis be conscious of things that have not been done when they’ve done something for someone else?
Yes, and there’s a very simple change to the mindset that can make it valuable. That is when you give, don’t just look at the person you’ve given to.
Look at that person as part of your network and when you look for reciprocity, look for reciprocity from your network not necessarily from an individual within the network.
Stephen Covey talked about emotional bank accounts. You build up a balance of support. Now, it doesn’t have to equal out, but as long as you know that if you continually invest into your network, you can turn to your network and ask for help.
That’s key, but it’s not because I scratched your back, now it’s your turn to scratch mine. It’s because you know that you’ve earned the right to ask for help and you know the people who would be willing to help you.
It may well be that I give to one person, they give to someone else and that other person gives to me – so it’s the whole network that gives back rather than the individual.
Having said that, you will become aware quite quickly if there are people who you support on a regular basis but they don’t give any support back – whether it’s to you, or whether it’s to anyone else.
They are just one of nature’s ‘takers’, and I think that if they are just one of nature’s takers and they’re not going to give back to anyone else, you would be fully justified in questioning the support you’re giving them.
As a final thought, what one tip would you give to listeners today? Let me just paint the picture here – someone is a training consultant or a coach.
They’re probably self-employed and they’re thinking, what one pearl of wisdom could I take today from this conversation and apply to see results pretty quickly?
Take this stuff seriously! Don’t expect it just to happen. You’ve got to have a strategy. You’ve got to dedicate time to it and you’ve got to invest that time wisely.
Don’t think just because you’re busy now that it can wait till later, because it’s not about quick results. You want quick results, pick up the phone and cold call. So however busy you are now, start your referral strategy today.
Are you in your business for one week, one year, five years, ten years, twenty years or more? Stop worrying about short term results, or if you are worried about short term, then there’s other routes to market.
Networks and referrals can be blown if you’re too focused on the short term.
That’s a fantastic tip. I think that’s worth repeating. Networks and referrals can be blown if you are focused on short term results.
This is a bit like a garden – you have to remove the weeds, you’ve got to look after the soil, fertilise it properly and only then when you’ve planted the right seeds can you expect growth. How does that sound?
Finally, turning to the praise given to you from people who have recommended the book – just to quote one, this is from Colin Wright, Snr Vice President Global Sales Development for Mastercard – “The learnings from this book are practical and portable to all areas relating to the science of engineering, executing and maintaining a referral strategy. I took away a mountain of pearls of wisdom. Thank you.”
I thought it would be a nice thing today to end on the note of what we can do for the audience listening to this programme.
We’ve agreed that we’re going to give away three copies of this book.
Details will follow in the accompanying post on the website, but I’d like to thank Andy for agreeing to personally dedicate three copies of this book to people who win the prize.
My pleasure, and I really hope that it goes to people that will use it the advice because I am a great believer that it can make a huge impact on your business.