In the last post, we discussed why offering incentives (cash or other gifts) in exchange for referrals is not an effective strategy, but instead might very well be counterproductive.
So, the question is, what is a better and more effective alternative for expressing our appreciation to those who refer business to us? And, what will make it more likely that they will be motivated to continue to refer?
As noted by several comments from the last post, many of you already know the answer:
How? A variety of ways. It can be anything from a short, handwritten note to a gift certificate for dinner at their favorite restaurant (which you can find out) to many things in-between.
Important: Make sure this gift is something they would find to be of value.
Depending upon what you sell and the type of referrals you receive, you might begin with a simple note, and as they provide more referrals, the size of your thank you gifts begin to increase. Or, not. But, at least the handwritten thank you note. Acknowledgement is so important, both because it’s the right thing to do. And…
Remember: “Behavior that gets rewarded…gets repeated.”
Key: They don’t feel “bought” but they do feel appreciated.
How do you say thank you for referrals? There are so many examples, I’d love to hear some that you utilize.
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May I suggest a chocolate basket. 🙂
People do like to be thanked even if they tell you it’s not necessary. Bob, you are right about behavior that is rewarded get’s repeated. I always say, “Thank your client BEFORE someone else does.”
Bob, If geographically possible follow-up the gift of a handwritten note (see Margaret Shepherd’s classic THE ART OF THE HANDWRITTEN NOTE) with your physical presence at your referral person’s favorite location close to where she lives and at a time convenient to that person. My No. 1 referral person’s “branch office,” when he is not at a client location, is Panera Bread. His favorite store is like Cheers; “Where everyone knows his name.” As Woody Allen is alleged to have said, “85% of life is ‘showing up’!”
I use Send Out Cards to send personal, handwritten (ok, by computer, but it’s in my handwriting!) card. When I can I put a picture of something relevant to the transaction on it, or something I know they would enjoy.
Bigger, more referrals, then I move into gift mode. One caveat – like you said, make sure it’s something THEY will like. If you have to, call their secretary/spouse/mutual friend to find out what they are interested in. Or a perennial favorite, a Bob Burg book!!
The last thank you gift I received was a scented candle and bubble bath. While I did appreciate the thought, I don’t like scents of any kind and the last time I took a bath I was what, 3 years old? I ended up re-gifting them – after removing the clearance tag off the bottom of the candle .
Thanks for the reminder, Bob!!
Thank you, Stephen. Appreciate the thought. My only caviet is to first be sure that your showing up in that situation is something he/she would enjoy. Remember, it’s all about *them* 🙂
Beth, yes, SendOut Cards is an excellent tool. I’ve received many of them and am always very impressed with how they can be personalize. And, yes, great idea about calling someone who knows THEIR preferences (and thank you for the book plug) LOL. Great story about the last gift you received.
Jean, YES, you may suggest that. As the recipient of one of your chocolate baskets (and we gave them out to all our guest speakers at one of our conferences, and to rave reviews!) I can vouch for them!! 🙂 Seriously, for chocolate lovers not on a diet, that’s an excellent gift.
Yes! A great follow up – I was looking forward to it and delighted.
Bob, you set a great example of showing reinforcement and appreciation in the Social Media transaction realm.
Comments, likes, tweets, thoughtful engagement increase the social network bonds between people which would be lovely enough, but there’s more! The linking and engagement boost visibility and act as a form of referral – not an exchange of money for service or product – but definitely adding value.
Finding customers and people giving you referrals and watching for opportunities to give an appropriate Social Media boost or online review is a thank you that I value highly. (I play a little game called “Groundhog Day” where I set a time and see how many people I can connect and boost – big fun!)
Kathryn, thank you for your kind compliment. Very appreciated!
I actually was on the other end of receiving a referral gift once. They gave me a $25 gift card to a trendy dress shop, which I had never been, but loved & never forgot the gesture. It often comes to my mind when I see this person, as it left a great impression with me that he was so generous. I also received a gas card once for “thank you for business”, but the referral friend stood out in my mind just now. I guess because most people thank you for your business, few thank you in this way for a referral. Good lesson Bob!
Thank you, Sher. Appreciate you sharing from your perspective. Very nice!
A side question: Would it be okay to bump up the “thank you” in the case of referrals that result in a sale and cash from the customer? (Such a reward could even be formalized by prior agreement, as appropriate.) This way, referrals would be better targeted, and referred customers would more likely be satisfied with the interaction, which solves the original trust problem.
Hi Jim, thank you for writing. I’m not sure I’m understanding your question. If it’s a matter of pre-arranging a referral fee, I don’t believe that is generally a good idea, and actually tends to be counterproductive (see previous article, which I link to in first paragraph of today’s post). But, I may be misunderstand what you wrote. Please feel free to write back and let me know.
Thanks much, Bob, for the great article with wonderful, simple things we can do (What’s easier than “Thank you”?!) to express appreciation.
I like how the emphasis is on reinforcing the act of referring, which is independent of whether a sale actually occurs.
Thank you, Tshombe; much appreciated, my friend. And, you’re right; the same holds true regardless of whether the referral is from an existing customer or not.
I just listened to you on the call with Paul Castain and enjoyed it a great deal. Your blog article made me think of an individual to whom I have made several referrals. I have even suggested him as a supplier in response to a question on LinkedIn which got his name in front of quite a few potential clients. Not once has he ever said thank you. Even though we have met in person several times, he doesn’t remember me when we see one another at events. I bet you can see where this is going…I no longer recommend him. I no longer even talk to him at events. The lesson here: Don’t tick off someone who is helping you by ignoring them!
Great point, Rebecca. I’d say that salesperson has done an excellent job at snatching defeat right out of the mouth of victory. I’m sorry that happened.
I say, “Thank you.” 🙂
I have made charitable donations in the client’s name to a charity of their choice.
Bob: thanks for your response; I’ll try to restate my question more clearly. As I interpret it, your position is that paying directly for referrals creates a “referral mill” that grinds through lots of poorly vetted prospects, and the business ends up with a reputation as an untrustworthy meat-grinder. Which makes sense. But what about rewarding a referral (including formally paying for it) only when it results in a sale? That way, the referrer will search only for people who’d definitely benefit from our services, so prospects will feel appropriately treated, and trust will be maintained. Granted, most referrals don’t pan out, and referrers may suffer burnout unless they get some sort of interim reward. In that case, could we simply return the favor and send referrals to their business as our “thank you”?
An interesting dynamic in my field is the intimate relationship with most of my clients. It seems what they value most from me as a gift is my time, listening to them, and offering suggestions they can benefit from depending on what is going on in their lives. Of course giving them more time via conversation without charging them anything seems to be most appreciated. Occassionally a reduction in fees if they are struggling financially at the moment and of the course I send all clients a copy of the Go-Giver…seriously it is SOP. The more I can help my clients succeed the more successful my practice.
As always, you are appreciated Bob.
Jeff Haywood, CPA
Thanking someone for a referral seems obvious, but it’s probably the one basic rule many of us forget most often. Thanks for providing a much needed reminder.
The most useful and relevant thing you’ve taught me in Social Media, Bob, is to thank people. Without fail, any time I’ve mentioned you, RT’ed you, whatever- I’ve received a thank-you, and so quickly I can’t imagine how you do it. What a great example you set for everyone!
Karen, thank you. That’s very kind of you to say. And a huge thanks for referring to one of my recent posts in YOUR blog post. Greatly appreciated!
Not sure how I missed this yesterday (maybe it was because I was so busy connecting with people who YOU referred to my blog? THANK YOU!) but I’m almost glad I did, because now I get to read all the great comments too 🙂
Not to be a brown-noser, but I tend to give them a copy of “The Go-Giver” as I find it a great way to say Thank You. If the person has sent me a referral, chances are good they have displayed at least 2 of the 5 Laws, and giving them the book helps them with Law #5
Amy: That always works!
Laura: Always cool. Have done same and others have done same for me!
Jim: Thank you for explaining. And, I think I understand your question now. If I’m correct, then what you are talking about isn’t really “referrals” per se, as much as a business arrangement with people whom you are asking to find business for you in return for payment. I’m not saying that is right or wrong…only that it’s different from what we are discussing. I’ve heard what you are suggesting referred to in certain fields as “bird-dogging.” Again, no judgement made; my feeling (based on what I’ve heard from others) is that in certain businesses, and with certain people it works and with others it doesn’t. You basically have hired “part-time salespeople.” Again, no judgement here at all in terms of good or bad, right or wrong. It’s just a different animal than what this post is discussing. Thank you, my friend.
Oh, regarding your interpretation at the beginning of your comment. No, that’s not really what I was saying. Again, I think it’s more a function that we are talking about two different things.
Linda: That’s sweet of you. Always putting a smile on my face. Thank you!
Jeff: Thank you. Great job of determining what THEY would find to be of value!
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Kasey, thank you for your very kind compliment. Much appreciated!