How to Win at Referrals

I worked for a short while for Met Life between my first and second bank jobs after college.  I have always enjoyed talking to people and thought since I had an uncle who was an insurance agent, how hard could it be?  There, I was first exposed to the concept of getting referrals from customers to build your business.  After a presentation to a client (and hopefully a sale, which did not occur at all for me), we were to ask the following:  “If what I have presented is of benefit to you, can you give me the names and phone numbers of three people you respect, and who respect you in turn, who would also benefit from this service?” 

Since I never reached a close on a life policy sale, I never had the opportunity to ask the question.  I often wondered what to do if someone gave me the name of a deceased person.  Clearly, those survivors could use the live proceeds!  I eventually left Met Life because I was accustomed to several necessities like eating and paying rent.

Several years later, I attended a seminar on sales that was hosted by the savings and loan that I worked for.  It was there the same idea of how to generate referral business was presented.  I thought this was a great idea and that this would generate so much business, I would be as happy as a pig in a mud puddle.

So I decided to try it.  My next closing was with a couple who was buying their first house.  I strategically positioned myself at the head of the table between them and the door.  There was no way that I was not going to get three referred names from them after the closing had finished.  I would just block them in until they gave me the names.

So the closing finished and I asked my golden question to get my referrals.  I was met with silence.  The couple shifted nervously in their chairs and the Realtors looked annoyed as there was no sound except for crickets chirping.  Finally, the couple half-heartedly gave me one name and told me that was all they could think of.  Then they asked to go as their moving van was waiting for them.

I gave up on the begging for referrals soon after that.  I thought the idea was stupid and each time I asked, I was met with silence.  I don’t think I ever received one good referral from those requests at the closing table.  So I concentrated on being the best at what I could at residential and personal loans, which were the main lines of business for our savings and loan.  I became an expert at figuring out how to get the loan to the customer while still managing the risk to the S&L. 

Before long, I was receiving unsolicited referrals.  I even closed over half of the real estate transactions for the largest real estate company in my hometown.  Our branch was swamped with new business.  Yet, I never stopped to figure out why so many referrals were coming to us.  It was not clear to me until I was visiting one of my Realtor friends at his office one day.  He presented me with a new referral and said, “Now I don’t want you to get a big head but do you know why we go out of our way to send you business?  It is because you are the best banker in town who gets the deal closed.” 

It was then I learned the first great principal of referrals.  To get a referral, you need to be someone worthy of getting a referral.  Think about when you recommend a movie, auto repair shop or vacation spot.  You are not doing it because you have “give a referral for___” on your to do list.  You do it because it is something that is worthy of a referral in your estimation.  Referrals are something we do every day, whether we realize it or not.  We only recommend those we believe in. 

The second principal of referrals I learned soon after learning the first, if you have a raving fan of your product or services, you sometimes get a referral by being strategically introduced by your fan to your prospect.  This is best done when it is unsolicited by you and it will not happen unless they believe in you.  The best place to start receiving referrals is to be someone worthy of getting them.