Why Is It So Hard to Ask for a Referral?

My Take on the why something so easy and effective gets overlooked...

You've had lots of customers. Hundreds - even thousands of them, right? Whether you're a professional, a contractor or merchant, each of your clients is sharing their experience with their network of friends, neighbors and co-workers. Right now.

The "How To" books all say it. The sales experts in their seminars have told you over and over - "personal referrals are worth their weigh in gold". They also tell you the best time to get referrals is the moment you gain a new, satisfied customer.

Each new client is an opportunity to grow your business the smart way - by inserting yourself into their conversations with their permission.

So why's it so hard? Two reasons.

First reason - fear. The fear of losing a prospect is balanced with your knowledge that sales is a numbers game. "There will be lots more prospects. Besides, if they really knew me they'd have selected me." It would seem like landing a new account is a lot scarier than asking an existing customer for a referral.

The fear of rejection doesn't go away after you get the order. It deepens. So many business owners who congratulate themselves for their sales abilities are actually afraid to lay it on the line when it counts most.

Why is this so? Because once you've won their account you begin getting to know your client personally and vice versa. Their opinion of you is now formed from first hand experience.

So if your customer won't give you a referral the rejection is personal.

Second reason - pride. Some of us like giving the impression that we're all that. As a local business owner we enjoy an image of success. Sure - we advertise. And sure we accept referrals. But "asking" for referrals would make it look like we need more business.

Huh? Isn't that ludicrous?

Yep - it is as silly as it is widespread. In fact you probably know some second-generation businesses that fall into this category. Junior has done pretty well managing the good will and clientele carved out by his or her entrepreneurial forebear. But they are missing out on the personal touch and are not connecting with their customers like the ol' man did. They never had to ask, so they don't.

Whether due to fear of rejection or protecting your "image", I'll bet you a buck you aren't following a plan to:

1. Tell them they're valuable to your business

2. Let them know you'd like them to recommend you

3. Give them a way to do this

4. Follow an ongoing customer communications program

Each customer has been gained with much effort - and even more sweat has gone into making them happy with your services. They expect you to ask them to refer friends to you - and they even want to do this if you've provided good service.

Plus as each month passes, more and more of your customers are affiliating with their trusted businesses through customer loyalty programs, Web based services and friends who have home based businesses. So the longer you wait to start a loyalty program the farther behind you are slipping.

The good news is such a program is both easy and free to start. YouGottaCall.com was built to fill this need and allow you to connect with the clients and neighbors who refer business to you. Plus you can benefit the charitable organizations that your customers and friends support so everybody can benefit.

What's more, you can get started inviting your network in a matter of minutes.

Oh - if I owe you a buck, just let me know - and share your referral system techniques with your neighbors in the next issue of the YouGottaCall "Connect-gine^TM" newsletter.

My Take: Social Networking Vs. Search

Is Search Dying?

From "How Social Networking Could Kill Web Search as We Know It"

By Glenn Derene as published on April 16, 2008 in Popular Mechanics

Excerpts:

"Silicon Valley’s Big Three are fighting over the scraps of the last decade of innovation while there’s a sea change taking place in the way people use the Internet"

"with the rise of social networking sites such as Facebook, MySpace, Twitter, Second Life, LinkedIn and even Google’s own Orkut, the next generation of Web users may find what they want by using their social network rather than a search algorithm"

"The Web is, in a sense, maturing into a different medium than the one that search engines were originally designed to tackle."

"in the past few years, a bunch of sites have begun to pop up based on the philosophy of user-generated content—a phenomenon often referred to as “Web 2.0” "

"as we each carve out our individual niche on the Web, the logic of search may well flip inside out. Since we are essentially meta-tagging ourselves through our social networking memberships ... it’s conceivable that the information could attempt to find us "

even though Google, Yahoo, Facebook, Amazon and others all have elements of this new relationship with users, nobody owns this space the way Google “owns” search

My Take

Amen.

My Take on Recession-Proofing Your Business

"Recession Proof Your Business" as seen in Relativity

Excerpts

"businesses that are bogged down in traditional ways of thinking about advertising and marketing are losing out on the next great gold rush present on the internet today"

"those not able to communicate to their marketplace in a rapid and concise manner ... will shrink and lose traction in their marketplace while those that efficiently use the internet to broaden and enrich their current market share will thrive and continue to influence a larger market"

"successful and recession proof businesses will be those that engage in growing their market share by providing high quality content and effectively leveraging “e-word of mouth” to spread their information quickly and with impact. Those that do not succesfuly communicate will go the way of the dodo. The real power lies in the hands of the people."

My Take:

How to maintain a steady supply of high quality referrals? Look at the organic word-of-mouth cycle ...

• The most successful businesses offer the best value.
• Value creates buzz.
• Buzz drives word-of-mouth referrals.

Consequently successful businesses are the ones already receiving organic word-of-mouth referrals.

The question then becomes what new tools will allow businesses to more efficiently generate and capture these referrals to convert them to sales at a higher rate? This will determine which businesses can compete in a down market by conserving their ad budget while increasing their sales revenues.

The tools that will do this will be easy to use, be widely distributed, be cost-effective (in today's Internet age this means free - or "Better than free") and will provide rewards to consumers and to the community as a whole. Or at least that's "My Take" on it.

Word of Mouth - Your Best Strategy in a Tight Economy

Excerpted from
"Word-of-mouth may be the voice of a new era in marketing"

by Kerry Leonard Mar 12, 2008
Over ninety percent of consumers say the number one place they go to get information on products and services are friends, family members or trusted “influencers.” said Rand. Traditional advertising is moving farther and farther down the list.

“The ability to interrupt people into paying attention dwindles by the day,” he said

With sobering economic news streaming in almost daily, people will likely be spending less in coming months. Television advertising may reach a large number of people, but high costs and media fragmentation may not deliver the desired return on investment.

They’re looking for effective. And word-of-mouth, the proponents say, is the answer.

“Were not saying that traditional marketing is over with,” said Geno Church, word of mouth inspiration officer for Brains on Fire, a marketing firm in Greenville, S.C. “People pick and choose what they want to listen to.”

“And that’s where word-of-mouth can help a company in a recession,” he added.

Consumers are exposed to roughly 3,000 commercial messages a day, he said. “Word-of-mouth breaks through that clutter,” he said.

My Take

Do word-of-mouth referrals contribute significantly to your sales? Asking your customers is an excellent first step. Inviting them into your own referral network can begin a self regenerating stream of sales.

My Take on the "Birth of Socialommerce™"

Excerpted from "Social Media and Online Commerce: Birth of Socialommerce™"

By Erik Qualman, Search Engine Watch, Feb 21, 2008

Google's buying into social networking and social search in a big way even though monetization remains problematic.

Despite social network traffic increasing eightfold in 2007, social search engines still account for less than 1 percent of total Internet traffic, according to Hitwise. There's huge upside potential.

Google continues to struggle in its partnership with MySpace. Generating robust revenue streams from its $900 million deal with NewsCorp has been a challenge. Many insiders believe Google is losing money on the deal. Even Google co-founder Sergey Brin admitted, "I don't think we have the killer, best way to advertise and monetize social networks yet."

Some Web pundits aren't sold either. "What you have with social networks is the most overhyped scenario in online advertising," said Tim Vanderhook, CEO of Specific Media.

Socialommerce™ is the next big thing. Google product guru Marissa Mayer recently told The New York Times that social search would be a key component in the future of search.

Social commerce harnesses the simple idea that people value other people's opinions. Nielsen reports 78 percent of people trust their peers' opinions. This is neither a new concept, nor new to the Web (e.g., epinions.com).

What is new: social networks make so much easier to disseminate the information. And people want to disseminate information.

My Take

Thanks, Erik.

Social networks' business models rely on revenue generation from external sources - i.e. advertising. In this way they are like television and radio.

But when you think of TV or radio, what one thing do you dislike most? The ads!

With the revolutionary, participatory capabilities of the Web as a medium, is it not possible to form a social network model whose revenue generation - whose demonstrated economic worth - is intrinsic to its virality and thus its success? That rewards all members of the social network for their successful participation in it to stimulate commerce?

This is what we have been aiming at during the development and beta roll-out of YouGottaCall.com, a "Connect-gine(tm)" (Connection engine) which leverages the real world relationships of its members with each other and their trusted local businesses.

YouGottaCall.com Network Update

Stats: “Size doesn’t matter. Growth rate matters.”

Networks increase their effectiveness with growth. Since launching YouGottaCall.com - the "Connect-gine" we have seen a steady growth in new Members and Trusted Service Professionals (TSPs).

At this early stage we are seeing a rapid doubling in our membership. We hope to soon reach 100 Members and TSPs and look forward to adding new features you’ll be able to use, such as

• EFT to make your referral fees simple

• Reports to show you your referral and sales activity

• Not-for-profits

Thank you for all of your patience and feedback as we improve
our beta product. Please feel free to contact us at any
time with your valuable suggestions and critiques.

Word-of-Mouth in the News

The research of two UConn professors turned up in this article in the Fort Worth Business Press by Darwin Campbell. Please note the following excerpts and our editorial "My Take".

‘Word of mouth’ continues as valuable marketing tool

"Companies may be neglecting a valuable marketing tool: word of mouth. Marketing efforts well-designed toward eliciting referrals should see much greater returns from their advertising expenditures than do companies relying heavily on mass marketing.
"High-volume spenders and good referrers are not generally the same people, and the value of the best referrers can far exceed that of the good spenders.
"...return on investment of $13.60 for each dollar spent on the marketing campaign. ... standard return on marketing investments had previously been $4 to $6 for each dollar spent.
“Viral marketing spreads rapidly when satisfied customers share their positive experiences and bring referrals and business your way.”

My Take

Consumers want to cut through the static and clutter of advertising to find the local businesses their friends and neighbors trust. Local trusted service professionals need to somehow leverage their years spent satisfying their customers into a recurring source of qualified sales leads.

YouGottaCall believes that traditional advertising lacks the ability to distinguish a business's true quality or value. A new media which connects consumers to trusted services will better serve both local businesses and consumers. This new media will use the Web to create a connection engine.