A referral is a referral, right? Well, not so much. Once a referral source has given you the name of a person to call, what more could you hope for?
Actually, there’s quite a bit more you can expect from referrals that have been properly developed by their sources. Referrals come in several different shades. I’ve identified five types of referrals that vary in quality according to how much involvement your referral source has invested in preparing the referral for you. The more time and effort your source puts into qualifying, educating, and encouraging the prospect before you become involved, the higher the quality and level of that referral. Conversely, if your referral source only passes an interested prospect’s name to you, most of the work of converting that prospect into a customer falls on you, and the likelihood of a successful conversion diminishes significantly.
Now let’s cover the five levels of referrals, ranging from nothing but a name and contact information to the “Full Monty” (which despite the movie, actually means to do everything possible). We call this the Referral Continuum and we’ve ranked the levels of the continuum in order of ascending quality.
Please note that this is a “referral” continuum, not a “leads” continuum. All of these levels are true referrals not leads (including the first one). The person giving the referral knows both parties and is recommending the person providing the product or service to the person who is receiving the product or service.
Note that each level below builds upon the previous. So a Level 2 referral includes much of what is included in a Level 1 referral. A Level 3 referral includes much of what is in a Level 1 and 2 referral etc. etc.
Level 1: Name and contact information. Your referral source has recommended you to someone and given them your contact information. They have done just enough work to provide you with a phone number, address, email, or some other way of contacting the prospect and that prospect knows you might contact them. If the prospect is expecting your call, this is a legitimate referral, it’s just not a high-level referral. That said, we’d take this over a “cold-call” any day of the week!
Level 2: Supplementary material. In addition to the recommendation they gave, the referral source provided either your marketing literature, website information, or other content to the prospect for their review but nothing substantially more. This additional information can positively influence the prospect by providing more material for them to review in addition to their verbal reference.
Level 3: Share experience. In addition to some or all of the items above, the referral source gave a personal written testimonial or a strong verbal recommendation about you to the prospect. They spent time talking to the prospect about their experience working with you or their understanding of other people’s experience in working with you. This is the first level of referral that truly involves a modicum of effort on the part of your referral source. It usually
includes background information and a description of your product or service as filtered through the lens of the referral source.
Adding the element of promotion increases the effectiveness of your referral source’s effort on your behalf. Promotion is advocacy—an outright recommendation of your product or service with a description of its features and benefits.
Level 4: Introductory call and/or arrange a meeting. This is another level up in terms of effort from the referral source who makes a personal phone call on your behalf and/or arranges a phone or in-person meeting between you and the prospect (in addition to many of the things outlined above). When your referral source arranges a call or a meeting between the two of you, they move beyond the role of a promoter and move into the role of a connector or facilitator. This takes effort and is the sign of a committed referral partner who you should definitely support in return.
Level 5: In-person introduction and promotion. At this level, your referral source is making a serious commitment of time and energy in support of your business. They haven’t just arranged a meeting, they participate in the meeting. At this level, your referral source has done the work of assessing the need a prospect may have for your product or service and has gauged the prospect’s interest in learning more about it. They share this information with you which enables you to tailor your products or services to emphasize the specific benefits that the prospect is looking for.
This level is practically a “closed deal.” Generally, a level 5 referral means, the business is nearly closed before you even contact the prospect, solely on the strength of your referral source’s efforts. Not much is required from you except to answer some questions and deliver the product or service and collect the payment. People who give you Level 5 referrals are prized referral partners. Make sure to treat them as such. You should have a reciprocal relationship with these individuals. They are worth their weight in referral gold.
The Referral Continuum that shows the amount of work you must do to close a prospect, based on the level of the referral. If you’re given a Level 1 referral, you have to do 95 percent of the work to close; this is not much better than other marketing efforts. On the other hand, if you get a Level 4 or 5 referral, then the person giving you the referral has already done most of the work for you. It’s easier for your referral source to edify you than it is for you because your source already has a relationship of trust with your prospect. For this reason, it’s important for you to do a superb job in fulfilling that referral so your referrer will get great feedback and want to refer you again. The referral giver is, in essence, lending you his or her credibility; this is not something to be taken lightly.
Of course, the effectiveness of your referral network in providing you with quality referrals depends on the amount of work you do to develop your sources. There are many ways to encourage them to become active and enthusiastic members of your marketing team. The Networking Scorecard from Networking Like a Pro 2nd Edition will enable you to manually track the work you are doing to develop your network. However, you can also download a free app of The Networking Scorecard at www.IvanMisner.com/Scorecard. By using this scorecard to keep a weekly record of your networking efforts and the quality of referrals you receive, you’ll begin to see the relationship between the two.
Called the “father of modern networking” by CNN, Dr. Ivan Misner is a New York Times bestselling author. He is the Founder and Chief Visionary Officer of BNI (www.bni.com), the world’s largest business networking organization. His new book, Networking Like a Pro 2nd Edition can be viewed at Amazon.com.