When is a referral not a referral?

When it’s totally unqualified! I had a (long) conversation with a pretty persistent tele-sales rep yesterday who started by congratulating me on being nominated to become a member of their travel rewards club. Gee thanks.

Apparently, someone I know has become a member and the club asks every new member to nominate at least one other person they think may also benefit. Referral marketing in action – recommendation and ‘feel-good’ reinforcement:

“You’ve made a really good decision becoming a member – who else do you recommend we approach?”

This, of course, generates apparently semi-qualified leads for virtually no additional effort. Smart marketing – in theory. The tele-sales person’s opening line to me was:

“Such & Such has recommended I call you to outline the benefits of … as he thinks you’ll benefit too”.

Now, it’s much easier to say a straight ‘No thanks’ to a complete stranger, calling out of the blue, about something I may or may not have any interest in or need for. But they didn’t use this tactic. They gained a (slightly) warmer response from me initially as the first thought that went through my mind was “I know and trust Such & Such, therefore, maybe this is worth listening to.” There was also a momentary thought of “… and they recommended me! Gee that’s nice of them.”

Flattery goes a long way towards reducing purchase resistance. However, it started to go downhill from here-on-in as the tele-sales person failed to check whether I did, indeed, have a need or want for the product they were selling. Instead, she proceeded to list all the benefits and savings – at length.

The bottom line was I wasn’t in the market to purchase. I have no need or want for the product and no amount of telling me how fabulous it is, and what the member benefits are, is going to change this. When I explained this to her she kept repeating how only nominated members get these benefits (flattery again) and that she felt Such & Such wouldn’t have recommended me if I couldn’t benefit from them.

The psychological pressure to agree with her was pretty high. “How could I let Such & Such down? Will he think less of me if I don’t join him in this exclusive club? He’s a smart guy, maybe I will be missing out on something worth having etc. etc. etc?” Amazing how I found myself thinking these things and having to argue my case with someone trying to sell me a product I didn’t need or want.

Personal referrals and recommendations are a hugely powerful way of acquiring leads for possible future sales in an incredibly time and cost-effective way. However, that’s all they are – leads. The basics of establishing the propensity to purchase are crucial.

I found it interesting how important the issue of trust figured in the whole equation and how well the company used this to their advantage. I’m sure they convert many previously ‘cold’ prospects into shiny new members using exactly the process outlined.

Am I irritated by the call or think any less of Such & Such for passing on my contact details to them? For me personally – no. Clearly, asking existing members to nominate others is the primary way this company recruits new members and they can be pretty persuasive! However it didn’t work in my case – I’m not becoming a member. I wasn’t, for all intents and purposes, a good referral.

So how can we give great referrals?

1. Establish a need / want. Ensure the person you’re referring has a need or want in the first place.

2. Outline the possible solution. Explain how the provider’s product / services have benefited you in your own terms.

3. Gain permission to make the referral. Ensure the person you’re referring is happy for you to refer them to the possible provider.

4. ‘Rate’ the referral. Let the provider know the likely level of interest / propensity to engage the referree has so the provider can follow-up appropriately.

5. Confirm the referral’s been made. Let the person you’re referring know you’ve passed on the referral and can expect contact from the provider.

6. Follow up. Contact the person you’re referring several days or weeks later to ascertain whether they’ve been contacted by the company and find out what the outcome is.

By following these simple steps the person you’re referring is more likely to feel cared for and valued and the relationship between you is likely to be enhanced. It also makes the job of the company you referred them to easier as they can respond appropriately and spend precious time and resources on those most likely to purchase in order of priority.

If a referral’s worth doing, it’s worth doing well.