The "Transfer of Trust" That Comes with Referrals

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Question for you…

What do you do when you are looking for a plumber… or a new doctor… or an auto mechanic??

Let me guess…

Ask your friends?

Have you ever thought about why that works? If you get referred to someone from a friend or colleague, that there is an automatic layer of trust with that person…even though you really know nothing about them?

But if someone you know and trust vouches for something, it’s like a transfer of trust. It just works.

When was the last time someone referred a new customer to you?

You can get that same “transfer of trust” to you and your business with the right referral system.

Today, I’m sharing an interview with my long-time friend, Virginia Muzquiz, who has been using a referral process for over 20 years to grow multiple businesses to 6 figures… and she’s sharing a bit about how you can use a referral system in your business too!

But before we get started, I want to make sure you know that Virginia is hosting a 30-min session on all of this, tomorrow (Oct 19 at 11am Pacific / 2pm Eastern). It’s called the Referral Alchemy? Secret infosession and you can register for it here.

Now let’s get to it…

Virginia, can you explain why referrals are so important?

Referrals are the most cost-effective strategy for coaches, consultants, early-stage course creators, and commissioned sales professionals to find clients. Referred clients are exceedingly more valuable than clients who find us through other marketing channels.??

Because they come recommended by someone they already know, like and trust, they already believe in us before they walk in the door! And a great referral partner will do most of the selling and pre-address objections before a referred prospect comes through our door which means the sales process becomes more of a “decision-making process.”??

The prospect is just curious about how to become a client. Referrals put us on the same side of the desk, if you will when it comes to the conversion conversation.? In addition, referred clients purchase more, stay with us an average of 37% longer, and are 8 times more likely to refer than other clients who come to us through other means.??

For the solo-entrepreneur who is “doing it all” in their business, developing a process for generating a steady stream of referrals can be the difference between staying stuck on the revenue roller coaster and achieving the time and money freedom they want.

You talk about devaluing your services when you give away free coaching sessions, etc. Why does it hurt to give away your services?

I’m all about being a giver. Giving freely is a BIG part of what it takes to turn a network into a Referral Nexus that generates meaningful revenue for a solo-entrepreneur.??

That said, I don’t believe that we should be giving away our services to people in hopes that they will choose to invest with us. I love the idea of having a conversation with someone that helps them get clarity around what they really want to create, the obstacles they feel that are in their way and what “help” really looks like for them.??

Those “free sessions” are enormously valuable and 20% of them (or more) will result in onboarding a new client.? BUT, if we give away our secret sauce in a free session, people will be satisfied with that information, but they rarely implement. And that doesn’t serve them!??

People leave those conversations with a sense of having “done something” to solve their problem when in reality we’ve just lulled them into a space of false hope. Beyond that, when we give away our services for free, well, we get referrals that want services for free!? And that hurts our business and our brand. We serve people best when we stand confidently in our expertise and require them to invest in their transformation.

What is the biggest way to get your current customers to refer you?

There are a couple of things. First is to be super clear about the transformation you offer, the process you use to get people there, how you deliver your service, and your pricing.?Most people are really fuzzy about that and it makes it really difficult to refer them.?Second, is to really understand the mechanisms of reciprocity. Otherwise, you end up over-giving with nothing to show for it.?

And third…join me to learn more about my referral strategy from my Referral Alchemy? Secret infosession happening tomorrow.

Why do we need a system for getting referrals? Can’t we just get customers and then rely on them to refer their friends??

?Referral marketing requires insight and strategy just like any other form of marketing! It’s not about handing out business cards and hoping someone will ring your phone. You’ve got to know who your ideal prospects are and who are the people who serve them in ways that you don’t.??

Then it’s about connecting and cultivating meaningful, authentic, honest, reciprocal relationships. Partners need tools they can use to market to you and it’s up to you to provide them with that tool kit.?

Then you’ve got to be able to train your partners as if they were members of your company’s sales force, track their results, and invest in the partnerships that are most lucrative for you. When you have a system, it’s simple. That’s what Referral Alchemy is all about!

Seriously, if you want to learn more, just join Virginia tomorrow on her Referral Alchemy? Secret infosession. I’ve learned a ton from her over the years and still plan on being there to soak up more of her genius.