How to Ask for Referrals (Part 1 of 2)

Thanks for the question on the previous blog about the right way to ask for referrals from clients. There are two parts to the answer, with part 2 coming on Wednesday.

Part 1 is important enough to stand on its own.

Most people think about referrals after the fact, as something to get after work is done. That’s backwards, and will cause you to miss out on many opportunities throughout an engagement and client relationship to get referrals.

The best way to get referrals from clients is to have them think about referrals right up front.

A powerful way to do that is to put a clause in your proposals/contracts that talks about referrals (and testimonials while you are at it):

“Upon successful completion of work, if not sooner, Client agrees to have a discussion with Consultant about possible referrals, and use best efforts to identify at least two potential business owners or executives that might benefit from Consultant’s services. Client also agrees to provide a testimonial and/or case study about the engagement that Consultant can use as part of marketing collateral.”

This clause does a couple of things for you.

First, it is a unique clause, and will get the prospect thinking that you are a unique service provider. The prospect will realize that you are in this for the long term. They will feel confident that you have more than a short-term financial interest in doing a quality job for them.

Second, it gets them thinking about referrals right away. By using this clause in my own contracts, I’m often pleasantly surprised how most clients come to me with referrals rather than my having to come to them.

Third, it saves you the awkwardness of asking for referrals as a favor. You can remind the client of your contract, and get right into a discussion.

How do you talk about this clause to prospects? It’s simple:
“This clause might seem odd, but like you, I rely on referrals to grow my business. By putting the clause in the contract up front, you know that I’m grateful for any referrals you can provide while we work together. And I’d be delighted to help you build your business with referrals, too. Maybe we can sit down once we get going and figure out how to best refer business to one another. At the same time, I’ve worded the clause so that we only have this conversation if you are satisfied with my work — which is both of our goals.”

If clients want to negotiate price for referrals, decline: “Well, that’s not really the purpose of this clause. I already have plenty of referrals. I include it in this contract so you know that I’m looking to delight you, not just for money, but so that you are confident enough in my abilities and results that you might tell some colleagues about me. Also, my goal is to become a referral-only business, and this is one way that helps me to do it. So it’s not really a price issue, and if you want me to take this clause out of the contract, I don’t mind at all.”

Even if you do remove the clause from the contract, they’ll still be thinking about referrals and you’ll have accomplished your goal.

This contract clause gets the whole thing going. Next time we cover when and how to have a referral conversation with your clients.

Try it! You’ll be impressed.

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  • http://www.thewebmonsters.com webmonster

    Thanks for taking the time to answer my question Andrew. What you say here makes a lot of sense. I will be sure to try this the next time I get together with a new client. I think my problem might be that in the industry we are focused on (Real Estate Companies) they are in direct competition to some degree with the people they would refer to me. So maybe that is scaring them away for referring them to our services? Not sure. But I will still definitely try this approach with a new client. Thanks again!

  • aneitlich

    [QUOTE=webmonster]Thanks for taking the time to answer my question Andrew. What you say here makes a lot of sense. I will be sure to try this the next time I get together with a new client. I think my problem might be that in the industry we are focused on (Real Estate Companies) they are in direct competition to some degree with the people they would refer to me. So maybe that is scaring them away for referring them to our services? Not sure. But I will still definitely try this approach with a new client. Thanks again![/QUOTE]

    You’ve inspired me to add a 3rd part to this previously 2 part blog series because in your case, your best approach might be to get referrrals from
    people in your sphere of influence who can get you to realtors. More to come…

  • http://elysiansystems.com/ leadegroot

    I like to put my money where my mouth is.
    In my contract I specify that clients will get 10% of the value of the referees’ first invoice taken off of their next invoice.
    I’ve had to put a couple of caveats on that; the 10% doesnt exceed the value of the invoice and it can only be applied to that one invoice.
    This works for me because I rely so much on repeat business – my clients have me updating their websites and analysing their logs.

  • David

    I don’t know if this could really work in my country (France).
    Here the prospect will always negociate to get a discount, even if the price is already low. It’s a cultural thing.

    So I’m wondering what will the customer get back from this clauses? OK, a discount, but they often get discount without that kind of clauses.

    What if my prospect is an IT Manager? As a simple employee, he won’t care about me giving referals back to his company. It’s not his job to handle leads, he’s paid to make the IT systems work smoothly.