By Andrew Brown, Bridgemaker Referral Programs
Who doesn’t love referred business? After all, studies from across industries demonstrate leveraging referral sources is the fastest — and least expensive way — for software companies to find and close profitable new business.
What frustrates software executives, however, is they’re not getting an increasingly steady stream of referred business despite having launched a high-performing and innovative product. That’s because to effectively tap into the power of referrals, you also need to demonstrate your company is truly deserving of being referred.
The good news is you can take five steps to get your company referral-ready and achieve the increased speed and volume of referred business that catapults you ahead of competitors.
Getting Referral-Ready Step 1: Quantify And Openly Share Your Reputation
In referring your company, referral sources can take a wide range of action. Of course, you want them to act in ways that lead to you securing higher volumes of new and profitable business. But for them to consistently exhibit high impact referral behaviors they must do more than like you or your offering; they must truly trust your company.
The reality is your referral sources’ understanding of your company’s reputation is typically wrong. Sure, depending on your relationship with them, they could have some first-hand experience with your offerings, your customer support, or your management team. But, most often, they have an incomplete (and inaccurate) picture of how your company is thought of by the stakeholders that collectively shape your reputation in the market.
To get referral-ready, you should provide potential referral sources with a ‘snap shot’ of your company’s actual reputation. On a regular basis, you need to capture and succinctly summarize the outcomes of the following activities for them:
Only by synthesizing the data from all these activities and sharing it with your referral sources will you provide a more complete and accurate picture of your actual reputation. Doing so means your referral sources are far better equipped to refer you. At the same time, you significantly build the trust your referral source has in your company.
Living and breathing transparency with referral sources is put into practice at GIMME3600 which has built an Augmented Reality (AR) platform that serves Fortune 500 companies in the healthcare and real estate sectors. As Co-founder Daniel Bokun states, “We regularly share with key referral sources — be they customers, investors, or other enthusiastic supporters — our wins, wants, and wars. This kind of openness is critical to referral sources trusting us. And without them, it would be impossible for us to be as successful as we are.”
Getting Referral-Ready Step 2: Address Capacity Challenges
Timing is everything and getting your company referral-ready is no different. Consider for a moment if you instantly had all the referral business you wanted. Would you be able to handle it, or would such an influx of new customers reveal “cracks” in some of your processes? Of course, every business leader walks a “tightrope”, balancing when to build capacity (i.e. hire more staff, invest in more technology, enhance product offerings, expand into new geographic regions, etc.) with the actual influx of revenue (and other capital).
The point is you must be able to serve the new customers coming via referral sources as well as — if not better than — customers coming from your other sales/marketing efforts. That’s because your referral sources have placed their personal and/or professional reputations on the line by actively and repeatedly endorsing you. Furthermore, if somehow you “drop the ball” on serving the customers coming via referral sources, you not only jeopardize these new customers, you torpedo your credibility with your referral sources.
To get referral-ready your company must be able to effectively manage the wave of new business that will come to you when you harness your referral sources. Here are a few tasks to increase your company’s capacity to take on this new business:
Getting Referral-Ready Step 3: Keep Track Of Evolving Motivations
There are several reasons why referral sources choose to endorse and/or promote your company. Furthermore, those reasons change over time depending on your referral sources’ professional and personal circumstances. At the same time, each referral source has their own reasons for referring. The result: You run the risk of being out of step with the evolving motivations of your referral sources. When that happens, they simply won’t refer business to you.
To combat this challenge, business leaders often implement a well-meaning, but damaging, policy. Specifically, they create a “one size fits all” rewards program built on the faulty assumption that referral sources share one common motivation: money. However, in practice, referral programs that pigeonhole their referral sources as taking a “pay as you play” approach see their results take a nosedive and crash.
To get referral-ready, you need to stay on top of referral sources’ evolving motivations. To that end, you should:
Getting Referral-Ready Step 4: Make It Easy For Referral Sources To Succeed At Referring Business To You
Like you, your referral sources are busy doing other important tasks in addition to qualifying new opportunities and bringing them to you. That means you must make a concerted effort to ensure referral sources find it very easy to refer opportunities to you. To get referral-ready, you should take the following steps:
A good example of a company succinctly defining the kinds of behaviors that are expected from referral sources is found at Daisy Intelligence. The company has built Artificial Intelligence (AI) powered solutions to make sense of the massive amounts of data gathered by large retailers and insurance carriers. According to its CEO Gary Saarenvirtam, “We focus on breaking down barriers for our referral sources by giving them a very specific mandate: Open doors for us. By precisely defining the actions that we want, it helps them be more successful and it allows us to review and report on their successes.”
Getting Referral-Ready Step 5: Reinforce A Value On Referred Business And Referral Sources Throughout Your Company
Your company’s culture contributes to your referral sources’ short- and long-term success. To get your company’s culture referral-ready, take the following steps:
About The Author
Andrew Brown is Founder and Chief Innovation Officer of Bridgemaker Referral Programs. He is the lead author of the “How to Grow Your Business Through Better Relationships” series — which includes books on getting the most from referral sources, channel partners, and strategic alliances.