“My customers are happy with my business, but I just don’t seem to get many referrals”. What a frustrating feeling! What a misunderstood topic. So let’s remove myths and focus on facts to develop a more comfortable, effective and rewarding referral process.

Referral Foundation #1: Most referrals occur when you are not with your customer.

Customer referrals occur in one of three situations. Are you able to rank them from greatest to least source of referrals?

1. A customer gives you a referral when you ask them for one.
2. A customer refers a friend when they specifically ask for a referral in your industry.
3. A customer refers a friend when they mention a problem you can solve.

The reverse order is the correct answer. Indeed, a recent survey of financial planning customers suggests that over 90% of customer referrals occur in situations 2 and 3 – times when you are not with your customer (Advisor Impact “Economics of Loyalty” 2008). This makes sense - to obtain a referral at the moment you ask a customer requires them to overcome two hurdles. First, they must actually know someone to refer. Second, they must be able to remember that person on the spot. Let’s consider both hurdles.

Who does your customer know?

The good news is your customers will be acquainted with people who are good referrals for you. This problem is that your customers have to be able to RECOGNISE those are good referrals among their friends. It’s easy for your customers to be surrounded by good referrals, but simply fail to recognise them.
So what can you do to help your customers spot referrals? Educate customers – in discussions, in newsletters, in seminar presentations, in handouts, on foyer signs…

• Give examples or case studies of possible customers
• Describe situations a possible customer might be in or undergoing
• List phrases possible customers might mention or talk about
• Describe a mixture of demographics, lifestyles, locations and objectives

Who can your customer remember?

Once you have educated customers to better identify referrals, they then must be able to remember them. This is harder than it seems. Most people struggle to recall details from their long-term memory when they are put on the spot.
So what can you do to help your customers remember? Use memory triggers.

• Use personable, non-technical language that jogs memories
• Slow down referral discussions to give customers time to think
• Create written materials to discuss referrals as memories are better triggered visually
• Click here for examples of referral memory triggers in your industry

When are you trying to get your referrals?

Are you pushing hard to obtain a referral on the spot? Are you viewing it as your only chance to obtain a referral? No wonder these discussions are uncomfortable and high pressure. Or are you educating your customers to be on the lookout for referrals on an ongoing basis? Are you depressurising the referral discussion as you know it will not be the only discussion you have?

Do you have great memory trigger ideas for describing ideal referrals for your industry? Send them to me at This e-mail address is being protected from spambots. You need JavaScript enabled to view it and I’ll share back with you some of the best I have heard in your industry.