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Do you want to know the best way to motivate referral sources? Well, perhaps you’ve guessed it’s not money or for that matter direct compensation of any form. There will certainly be exceptions to this, but the perfect referral motivation is to tap our deep seated human need for community. People get great pleasure from offering help and knowing they can be called upon as a source of reliable information.
When referral sources are motivated, intentionally or unintentionally, out of a desire to help, they will often go to great lengths to do so. On the other hand, when the motivation is monetary, they will view it as market transaction and the motivation is often significantly lower or certainly different - ranging from indifference to distaste depending upon the industry.
In a fabulous book, Predictably Irrational by Dan Ariely, the author conducts numerous experiments around the idea of social vs. market norms that shed some very tangible proof on this idea. (Dan will appear on an upcoming episode of the Duct Tape Marketing podcast.)
As Margaret Clark, Judson Mills, and Alan Fiske suggested a long time ago, the answer is that we live simultaneously in two different worlds-one where social norms prevail, and the other where market norms make the rules. The social norms include the friendly requests that people make of one another. Could you help me move this couch? Could you help me change this tire? Social norms are wrapped up in our social nature and our need for community.
The second world, the one governed by market norms, is very different. There’s nothing warm and fuzzy about it. The exchanges are sharp- edged: wages, prices, rents, interest, and costs- and- benefits.
So, as a marketer I believe the message is this - can you design a referral program that taps into people’s desire to help? Can you give them, in a systematic way, the ability to use their influence to add value to the relationship they have with you or with their network?
Well, yes, and here’s the simplest way to do that - give without keeping score. Make referrals, make people thrilled, make time to help others get what they want and they will be motivated beyond belief to help you get the same.
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This entry was posted on Wednesday, June 25th, 2008 at Jun 25, 08 | 9:39 am and is filed under Referral Marketing. You can follow any responses to this entry through the RSS 2.0 feed. You can skip to the end and leave a response. Pinging is currently not allowed.
John We touched on this very subject a while back when we did a podcast together.
I am big believer if you help someone with something that is important to them, the odds of you receiving a referral go way up.
If there passion is golf, and you score them tickets to a tough event, that will be deposited into the relationship bank account.
If their children are trying to get into a certain private school, and you offer up to make a nice recommendation, that will be added to the relationship bank account.
If you go above and beyond the call of duty by providing incredible service or remember to call someone on their birthday or anniversary, it is these little gestures that add up over time to a great environment making it likely you will more referrals from your customers.
Larry Benet
The Connector
Hi John,
I totally agree. Ultimately, my ability to generate a referral will depend upon the quality of my relationship with the client. However, asking for help is always a good idea.
And, “give without keeping score”, absolutely. Simply be valuable to others, and they’ll one day reciprocate.
Thanks for putting it so succinctly.
So true!
Why do we so often think we can so easily buy someone’s professional “plug” with mere money or stuff?!
Hello. Long time listener, first time caller. haha
“I am big believer if you help someone with something that is important to them, the odds of you receiving a referral go way up.”
I am such a big believer as well. Case in point, just this past week, I met with another business owner in our market that targets a little different segment. Because I am passionate about marketing and what we do, I set him up with a way to better tap into a niche that was slipping from him and how to track the results. He now has a thousand referrals waiting for us which he is personally requesting they do business with us.
I believe doing something good for someone is a great motivation but I also think when it’s clear you are helping because you are so passionate about it, they feel comfortable returning the favor ten fold. They know you won’t let them or their customers down.
Great topic here!
This topic was recently addressed in one of the publications sponsored by the Journal of Financial Planning. Here is a quote:
“The data suggests that the reason clients refer is to do their friend or colleague a favor, not to do thier advier a favor. Id that is the case, it substantially changes (or should change) our approach.”
One thing I believe - is that we need to truly understand what “referrable” means. This includes leveraging the reasons clients / customers choose to refer.
I believe that associates who know and trust you are good candidates for unmonetized referrals. Yet even within business to business referral relationships, you must maintain balance and reciprocity to ensure a healthy relationship.
I think customer referrals can be monetized with some sort of a promotional campaign. Check out http://www.referralkey.com/ to see how people are building balanced referral networks.
Relationships have been and always will be number one. We are prone to forget it in this high tech world. There was a day when networking meant Kiwanis and Rotary, now it is Linkedin and Facebook. Yet it is the relationships that bring real referrals not the online profile.
You got it right!
Terry Christopherson
Developing The Complete Professional
http://www.tlcseminars