Why You Should NEVER Ask Clients For Referrals
Yes, every business book I’ve ever read has advocated asking your satisfied clients for referrals. Yes, every sales guru I’ve ever heard of will advocate closing a sale and asking this very same customer to recommend a few associates who might also have a need for your widget.
And yes, I take a completely opposite position…and for three good reasons:
- Asking for clients for referrals isn’t a good use of your time
- Asking for referrals doesn’t result in….referrals
- Asking for referrals endangers your client relationships
Here’s where I agree with most business gurus. I agree that referrals are the lifeblood of any business; without them, you’re sunk. I also agree that you need a system for generating referrals; preferably one that doesn’t result in the dismal outcomes suggested in my bullet points above. Finally, I agree that your best clients -the ones who’d gladly recommend you based on their experience with you and your services- are the very best candidates for generating referrals.
“But if asking for referrals doesn’t work, what am I to do?” Good question. I’ll answer that in another post. But for now, let’s the three most negative outcomes or requesting referrals from your clients as listed above.
Asking for clients for referrals isn’t a good use of your time
Of course it isn’t. Unless you’re a fan of cold-calling and other one-on-one time wasting activities, you’ll immediately recognize the similarity to selling. You’ve got to engage one client at a time, convince them it’s in their interest to give you additional prospects names, and good ones at that.
How much time do you think this would take if you wanted to generate just 10 referrals each month. Assuming a closing rate of 50% (most salespeople would kill for that conversion rate), you’d need to be having this conversation with 20 clients. That’s twenty meetings, lunches, dinners, etc. If you followed this route, when would get any other work done? There’s marketing, sales, promotion, performing your services, updating your products, and the list, as you know, can be endless.
As you can see, asking clients for referrals isn’t a good use of your time. But there’s another reason why you should reject the advice of most gurus…
Asking for referrals doesn’t result in….referrals
Simply approaching clients, even your best ones, and asking them for a referral will most likely result in two main outcomes: 1) your client will feel somewhat betrayed, and 2) your client relationship will never be the same. Let’s look at the first outcome.
You’re sitting in a café with your best client. You’ve nurtured this relationship over the last year and both of you have benefited from it.
Over coffee, you slide over five of your business cards with a blank side facing your client. You also supply her with a pen.
“Joan, you business has really helped me succeed. Is there anyone in your personal or professional network you can think of that would also benefit from my services? Would you mind just jotting down a few names that come to mind?”
But think about Joan - what’s going on for her right now? Is she suddenly put on the spot to come up with five qualified leads? Yes, she is. How qualified do you think these leads are going to be? Will Joan, who likes you and is one of your best clients, suddenly feel it’s OK to gve you the names of her best clients? Uh..nope. Not under these circumstances. You’ve backed her into a corner with this request. Suddenly she feels blindsided by someone she trusts.
And now Joan is experiencing the final outcome associated with asking for referrals…
Asking for referrals endangers your client relationships
Does Joan feel pressured by this unanticipated request? Yes. Is she likely to accept a future lunch invitation if she fears this might happen again? Probably not. Is Joan rethinking her relationship with you? Again, probably so. Do you come off seeming a bit desperate? Yep.
Your client relationship is the most important piece in your business puzzle. When you willingly engage in any activity that places this relationship at risk, your client will have good reason to look and go elsewhere for similar services. No right-thinking, ethical business owner I know would ever willingly do that. And that’s where I draw the line in asking for referrals.
The popular referral and sales gurus has sold you (and the rest of us) a load of %#$&. They’ve convinced the business populace that asking their best clients in the only way to reliable generate referrals. They’ve also convinced the popular publishing houses that this is true. Of course, most publishers will print anything they believe will sell, but still, who knew so many gurus could be this wrong?
In the next post, we’ll discuss the flip side of the referral generation phenomenon and prove once and for all why… you should NEVER ask for referrals.
As always, your comments and feedback (even blatant disagreement) is welcome. 
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Comments
Thanks for your comment, Michael. The solution to this sticky problem is easy and fun and it positions you further as a vendor of choice. I know that’s a teaser for Part II, but hey…a little promotion can’t hurt.
After spending some years as an insurance agent, car sales rep, and in direct marketing sales situations, I agree with you 100%. Although my supervisors/mentors in these sales positions would pound and pound on us to get referrals in the manner you described above, I felt uncomfortable about doing so for the same reasons you described–so, I wouldn’t ask for referrals (to the extreme frustration of my supervisor/mentors). I got enough sales from other methods to keep them from canning me.
However, I would make it *easy* for my customers to send folks in my direction if they desired. I’d leave extra business cards in the cars’ glove compartments. I’d leave extra business cards in their insurance portfolio packages. I’d leave extra business cards in their product packages. If my customers/clients were business people, I’d ask them what kind of clients they were looking for… and if I could send any business in their direction, would they mind? They were usually so happy that they might be getting extra referrals from me, that the possibility that they could reciprocate would be their idea. For my editing/writing business, I do this all the time at the Chamber of Commerce mixers and other functions. I ask fellow business colleagues how I can help them drive traffic to their businesses. And, I don’t ask for referrals at all.
It’s going to be tough waiting for the gem you are going to provide with your next installment!
Oh, by the way, what kind of customers are you looking for?
Dave (aka “EditorDave”)
One of my Blogs
It would never occur to me to get in a customer’s face and ask for a name and number. And maybe there are some gurus out there who do get it too, because while I do hear that the best advertising is word-of-mouth, I’ve never run into the recommendation myself that I ask a customer for a name and number. What I have done is simply include a few extra business cards when shipping/delivering a product, or including a “tell-a-friend” e-mail link on my web sites. Likewise, a “forward this e-mail” suggestion at the bottom of a mail-out. That gives the customer the initiative, if they want to take it.
Thanks for the interesting piece, Barry! Relationships with our current clients are some of the most precious we have so we must take care of them. Putting them in awkward situations where they feel put on the spot can never be good. I do try to make my clients feel like I’ve taken care of them by giving great service, and that it has been so good that they want their friends to experience the very same thing! … hence referrals.
Looking forward to the next post on the subject.
If my customers/clients were business people, I’d ask them what kind of clients they were looking for… and if I could send any business in their direction, would they mind? They were usually so happy that they might be getting extra referrals from me, that the possibility that they could reciprocate would be their idea.
Dave,
You’re on to Part II! I’ll leave it at that.
Suzanne,
You, too, have the right idea. You list of best practices is a good one. In Part II I’ll spill the beans about the best strategy to use for predicting referrals.
I do try to make my clients feel like I’ve taken care of them by giving great service, and that it has been so good that they want their friends to experience the very same thing!
Monica,
It’s the initial first step. Without great service we stand little chance of receiving many referrals. Stay tuned for Part II.
[...] OK, so his disagreement wasn’t that blatant with my blog post, but nearly. You see, I ran the last post on my consulting blog and received a comment from a user that totally disagreed with my position. [...]
I’ve never asked for referrals, but I’ve gotten them. I feel that referrals should come naturally, and are something you earn, not request.
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I’m glad to hear you say it out loud. I’ve always felt that asking a client (unless they were a client-bordering-on-friend type client) to put their reputation on the line for me by referring me to someone who probably is their friend was awkward at best. My answer so far is to ask them to refer me but without giving me the names, so I’m looking forward to the post, part II.
Michael