A mainstay to business development for many is receiving referrals from existing clients, or centres of influence. A referral gives a company, professional or independent validation that the service they’re providing is stellar, while also helping to build business with a warm lead. People like to do business with people they know, or know of, after all.

Although every business is different, many service-based businesses that truly thrive on referrals for steady growth can find themselves in a predicament: getting the wrong kind of referrals.

Are you sitting back wondering how could you get a bad or wrong kind of referral? How could someone who knows your business, has experienced your product or services themselves, refer the wrong type of client to you? It’s easier than you might think! Often times, we will chat with friends or colleagues about the surface of a problem we have, and boy, do THEY have the solution for US! We all want to help, so we’re going to suggest a solution to the problem, and refer someone we know so it becomes a win-win! Out comes the referral! People also generally want to tell the world about a great experience so that their friends and colleagues can share that same experience, and without any pre-qualification they start referring everyone they meet to your business. Sure, this is great for building your brand awareness, but now it’s up to you as the business owner to do some smart sifting.

So what constitutes a “bad referral” if I have the type of service everyone needs? Ask yourself, is your business really for EVERYONE though? You should have a detailed “ideal client” makeup so don’t be afraid to share what that looks like with others. Many knowledge-based, service-driven businesses have a difficult time with those ideal referrals.

For example, if you’re a website developer, odds are every business owner understands the need for an online presence. You develop websites, and did this outstanding job for this not-for-profit. You took that client because you know the Executive Director and wanted to be able to “help them out”. They rave all around the not-for-profit world about what a great job you did, for such a discount price compared to other quotes they’d received. Now, you’re fielding phone calls from other not-for-profits asking for the same great service and fair price. YAY! right?  Not really…… your firm is actually specialized as a high-end developer in the medium-sized for-profit private sector with a minimum project budget of $20,000. Now you’re losing all this time having to refer these phone calls to other more appropriate firms, or risk taking on projects at a financial loss.

Be clear and don’t be afraid to ask. A business that is specialized can hone certain skills to become niche experts, however it’s also a responsibility that if they’re going to ask for and expect referrals, they are clear as to the type of person/organization they work with and what an “ideal referral” looks like. Alternatively, if you’re going to be AWESOME and refer someone to a business you know, be clear on who their ideal client is. Are you a client? Think about what products or services you get from them and find someone like you. When in doubt, ASK what their ideal client looks like, or if there’s some individual or organization that you can specifically connect them with.

Last words… don’t stop giving referrals! They’re the life blood of so many small businesses. Just be sure you’re making a right fit and not wasting anyone’s time. This will not only increase your credibility and reputation, but make some pretty appreciative people refer quality clients to you. Getting referrals? Think of innovative ways to thank those advocates of yours! You’ll be sure to stand out.

Looking for referrals? Some things to remember here.

Giving referrals? Some things to think about here.

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