Local Entrepreneur Implements 7 Steps To Great Referrals

By Marc Gilenson

We have developed the Mybizuniverse.com (MBU) 7 Steps To Great Referrals white paper after interviewing hundreds of Entrepreneurs and attending numerous leads and networking groups throughout South Florida for the past 16 months.  We analyzed what the companies that generated the most referrals as well as the companies that had almost no referrals.  We looked at the root causes of the success and failure of these Entrepreneurs and developed the system outlined in this blog.  If you would like to receive a copy of the Mybizuniverse.com 7 Steps To Great Referrals white paper, please e-mail me at Marc@mybizuniverse.com and put in the subject line…Great Referrals!

Our blogs are meant to give you practical…affordable…effective…solutions that any Entrepreneur can implement.  We utilize real Entrepreneurs like Scott Davidson so you can see the advice in action. 

Here are seven steps that you must take on your path to generating great referrals:

1.      Ask yourself why do I refer the people that I do

2.      Identify who I want to get me referrals

3.      Decide what’s in it for the person making the referral

4.      Develop three features/benefits you want the referrer to stress

5.      Create the collateral support material (website, etc) they can use

6.      have a process to keep the referrer informed on the status

7.      Create an on-going education process

Step One – ask yourself why do I refer the people that I do

Scott answered the question this way, “I refer companies and people that I know and feel comfortable with, and in most cases have used or still use.  In addition, I refer people and companies to other members in ITEX”. 

Now let’s break it down;

Ø      Scott must know and feel comfortable with the people or companies he refers.  In his job as an ITEX Broker Scott will spend over an hour understanding a person’s business needs and potential unused capacity.  This gives him a good understanding of the businesses that become ITEX members through Scott’s organization.

Ø      Scott likes to recommend companies that he or someone he trusts has used or is still using.  As an ITEX Broker, Scott and his Trade Director are in constant communication with all his members, therefore they are aware of companies that are great at what they do and those that are not so good.

Ø      It should be obvious by now that Scott hands out a tremendous amount of referrals to his ITEX members.  This is a business group that he knows and believes in, this makes it easy to refer to other members

Ø      The more referrals Scott makes, the happier his clients are and the more referrals they bring to Scott.

Step Two – Identify who I want to get me referrals

This was a very interesting discussion.  Scott knows exactly who he wants to get referrals for ITEX… Current, active ITEX members.  He understands that the only way a person can explain a barter service is to understand that it is another form of currency.   ITEX corporate also understands the value of current members (more on this later in the article).

Step Three – decide what’s in it for the other person

This was easy to identify.  If a current ITEX member refers someone that they currently do business with, then they may be able to use barter dollars instead of cash.  Let me give you an example, a client referred a toner company (Tonerbob) to Scott.  Now the person that referred Tonerbob used to spend $200 per month cash on toner, now he can spend 200 barter dollars that were generated from unused capacity!  If a current ITEX member is speaking to a friend that has excess inventory that is costing money to maintain or has downtime that is not generating money, then the current member can refer them to Scott after using their situation as a reason for making the referral.

So as you can see, Scott has identified the following reasons why a current member should refer ITEX:

Ø      referring ITEX builds a strong network of members that means more products and services they can spend their ITEX dollars on

Ø      referring ITEX helps their friends and business associates turn unused capacity into business, this makes the person referring Scott a valuable resource to their friends and business associates

Ø      referring ITEX can allow you to spend ITEX dollars instead of cash with your vendors

Ø      referring three companies that become members means you don’t have any monthly dues for one year (saves you 390 dollars)

Step Four – develop three features/benefits you want the referrer to stress

Being able to have your referrer spew out up to three features/benefits is a critical part of MBU great referral system.  Scott retained the Sales & Management Group to conduct  round table discussions with his top referring clients as well as clients that are active an do not refer much at all.  There were many eye opening findings; however the one that was most amazing was that the top referrers would say why a company should get involved with ITEX and especially Scott in less than 45 seconds.  They were able to answer the one or two most frequently asked questions in their 45 second discussion. 

The discussion around ITEX was not a pitch, however it was a couple of questions with the follow-up statement “sounds like you and Scott have some potential synergies, I’ll have him call you this week.”  The following are the features that the group felt was most helpful in getting referrals for Scott:

Ø      Do you have any slow times that your staff is not working at capacity and yet you’re still paying them for the time or any slow moving inventory that is taking up valuable space and tying up cash?

Ø      In your business, If you could free up cash from buying things like advertising, toner, graphic design, pest control, and about 50 other areas, would that help your business be more profitable?

Ø      Would it help if you had someone promoting your business through e-mails to over 800 businesses and someone that was financially motivated to actively promote your business ?

You get the point; the benefits are putting unused capacity to work, and generating revenue from non-revenue producing inventory (most times it is costing to keep the inventory).  Let’s not forget paying for a myriad of products and services with ITEX dollars that you currently pay cash for.  Of course, last but not least is the infrastructure that Scott has put in place.  His operations staff is available every day to answer any and all of your questions, requests for help getting the products and services you need using ITEX dollars, and finding you business.

The purpose of the question format is to make it more conversational.  Your referrer is not there to give a complete presentation, just pique their interest enough to either call you or accept your call to them.

Step Five – create collateral and support material the referrer can use

It’s nice that you have beautiful brochures; however the referrer is not going to carry those around with them.  You need to give them something that will be easy to get to or small enough to hand out.  Scott is fortunate enough to be a local Entrepreneur with  mult-national company support.  The ITEX website contains all the information a company needs to make a positive buying decision.  This allows Scott’s referrers to just recommend that the person they are referring go to www.305292.itex.com for more detailed information.  This also helps Scott qualify the referral, if they have visited the website they and they want to meet, half the sales process is done!

Step Six – have a process to keep the referrer informed

Whatever the reason a person refers someone to you, they want to know the outcome.  People like to know the score, they want to be kept informed and they want to know that you know where the referral came from.  Once again, Scott utilizes the investment made by ITEX corporate.  There custom software will track all the referrals made by a current customer.  This is also required in order to effectively track their referral program of no monthly fees for up to one year after a third referral turns into an ITEX member.

Technology is not enough, Scott and his operations staff, led by Jasmine Poitier keeps all their referrers up to date by calling them to let them know that they have followed up.  If a referral does not want to meet with Scott or does not want to become an ITEX member, Scott and Jasmine will call the referrer back and let them know the status while thanking them for making the referral…Now that’s a system anyone can do and only a few implement!

Step Seven – create an on-going education process

This does not have to be formal training; it just has to be consistent and constant without being intrusive.  Scott currently reminds all his members about the referral program in every e-mail he sends out.  It is subtle, yet makes the point.  Scott is working with the Sales & Management Group on a series of how to refer statements that will go along with the e-mail message.

If you want to reach Scott to discuss his implementation of the MBU referral system, or are just interested in ITEX, call him at 954-337-2183.