Podcast

How to Leverage the Power of Referrals for Exponential Growth—with Bill Cates

By , May 25, 2020

Client satisfaction and loyalty are critical to the stability of your business. But it’s client leverage that turns incremental growth into exponential growth. Client acquisition expert Bill Cates tells us how in today's episode.

How do you get more people to identify with and build a relationship with your brand? Is it great marketing, a memorable visual brand, talented salespeople? The truth is, none of those are enough. You must create a “culture of referrals”—a reliable referral and introduction system that allows you to get more referrals and introductions from your existing clients. But how do you create this system, and how do you become “referrable”? This week’s guest, Bill Cates, is an internationally renowned client acquisition expert and the author of Radical Relevance. Bill and Meny drill down into these questions in today’s episode. Get ready for practical tips for how you can get more clients through word of mouth, referrals, and personal introductions, so you can increase your revenue without increasing your marketing expenses.

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How to Leverage the Power of Referrals for Exponential Growth—with Bill Cates

Thanks for having me. It’s a pleasure to finally meet with you. I’ve enjoyed reading your blogs and a lot of things that you send out.

The pleasure is all mine. Before we get into the question of the no-nonsense advice that I want our audience to learn, I want to share it with you. When we first got to know each other, you sent me some of your books and I was sitting at my desk and almost every person that came to my office asked me, “What do you mean Bill Gates gave out a book?” I want to know, am I the only person that sees that similarity or is this a regular occurrence for you?

It’s very common. Sometimes people say, “If you put a little line there on the C, you’d be Bill Gates.” I always use this when I give speeches and workshops because as you might imagine, you were a little bit in the business of people remembering our names. I’ll say, “How many of you thought that Bill Gates was speaking?” The hands go up and there’s laughter. I said, “Bill Gates has a lot of money. I have a little less. Bill Cates, that’s me. I’m going to help you make a lot of money.” I get it quite a bit and it’s fine with me.

That’s exactly what we’re going to do in this episode is to try to help people make a lot of money from those ideas that we’ll be discussing. Before we dive into the company that you came from, let’s learn a little bit about yourself. Tell our audience a little bit about what you have done and where you came to be an author on this topic.

For many years, I’ve been working with businesses of various sizes and their sales staff sometimes to help them generate more referrals and more introductions. There was a time when it was easier to reach people. Your client could say, “Call George, use my name,” and that was enough. Now, they don’t answer their phone. They are wondering why their friend gave your name out. These days, we’d been focusing on introductions and how to create more introductions for our business. With my book, Radical Relevance, it is about how we talk about our value when we meet new people, be it through an introduction or some other methods. Before this business, I built and sold two book publishing companies. That’s where I learned the world of business and how to build and sell a business. After that, my friends encouraged me to share what I’ve learned in building businesses with others. I’ve been doing that for many years now.

The topic that you speak about is referrals. I want to elaborate, dig deeper into understanding the philosophy and what it does, why it is the real way of gaining more business and why it’s the better way of doing it. To speak from my own experience, most people when they do business, the main issue is sales. I have to get more clients. We are a marketing agency and those are the calls that we always get. Those are the emails, “Let’s schedule a call. Let’s schedule a meeting.” The first thing in the meeting is, “We’ve got to do marketing,” and I ask them why. They say, “We need more business. We can handle more business.” Before we dive deeper into how to do it and how not to do it, what is it that somehow people know referrals work? People know that that’s a great form of getting no clients. Why is it that it’s always the last in the list?

It’s for a few reasons. The main reason is they haven’t fully made the commitment and perhaps a mistaken assumption meaning a lot of businesses see the referrals, they get referrals and repeat business. You hear that a lot as a barometer of doing a good job, which it is. It means you’re referrable and you’re worthy of spreading the word. The problem is most people see this as more icing on the cake rather than the cake. If you think about how would someone prefer to meet you and learn about your business, in most cases and businesses, it is through a recommendation from someone else they already trust. That’s why we know that social proof is so important. Referral as a form of social proof. My little adage is the way of the world is meeting people through other people, the referral and the introduction is the warm way we get into their lives.

It starts at the top of making a commitment to building a business through that methodology. If I can give you one example, one of my clients, a medium size insurance company had about a $450,000 commitment every year to a call center trying to generate leads for their sales reps. They brought me in to help instill a referral culture where they were meeting more and more people through referrals so the cost of opportunity would go down over time. What happened is they were able to stop working with the call center. I’m sorry to put a call center and you lose a contract but their profitability went up. After that, they had their best year of sales ever. Their best year sales and profits all because of making a commitment to meeting people the way that those people wanted to meet them through referral and introduction.

LTB 43 | Culture Of Referrals
Culture Of Referrals: Meeting people through other people – the referral and the introduction – is a warm way to get into their lives.

 

For a person who’s reading this and trying to feel like, “I know my salespeople are not generating enough sales and I want to create what you said, a culture of referrals,” what are the steps? What is the infrastructure that needs to be set up and how do we go about it?

It’s going to depend on the size of the company, but there are three main things that need to be done. First of all, the company as a whole and then the salespeople individually need to become more referrable. In other words, you need to make sure that you’re doing what you need to do so that you earn the right to these referrals and you get more referrals, more introductions without asking. If you do ask then you have people that are more receptive. The bottom line for that is turning satisfied customers or clients to engage clients or customers. Julie Littlechild in Toronto, Canada did a great study that showed a low correlation between satisfied clients or customers and the giving of referrals. In her study, only about 20% of satisfied folks participated in the referral process and she identified a higher level which is engaged clients or customers.

What’s an engaged client or customer? It’s someone number one who makes a valuable connection with you. They see the value, they like the things you teach, they like the questions you ask, they like your whole process of doing business and your responsive service, all the value aspects but they also appreciate the human connection. Be it with the sales rep, customer service rep or other people in the firm. There is a human connection that gets created there and that’s important. People do business with people they like even if all things aren’t equal. People often do business with people they like and recommend people they like. Both of those have to be in place. The minute you meet someone, whether it’s an internet lead or a referral or however that person comes into your world, throughout the entire ongoing relationship, how do we keep connecting with value and with the human connection? That’s what engaged client or customer is.

From there, you have to think in terms of leverage, meaning how do we ask appropriately? How do we do it in a way that isn’t aggressive, pushy, needy or feeling unsuccessful? A lot of your audience is familiar with the Net Promoter Score. If you have a Net Promoter Score of eight or better, it means you have clients or customers who are willing to recommend you. The problem I see with a lot of people is they don’t have a system in place to leverage that willingness to introduce or recommend. That’s all about putting systems in place to do that. Finally, make sure you get connected. Making sure that it’s not just word of mouth and you’re getting connected to these new prospects for your business. There are lots of different ways to do that and it depends on the business a little bit, but making sure that it’s not, “Call George, use my name.” It’s not word of mouth, it’s a connection. With engagement, leverage and connection, you can create a continual flow of good quality referrals and introductions.

Even on the first step at which going from a satisfied client to an engaged client, it ties in with the Net Promoter Score. A lot of companies have those metrics that they want to meet and they will say, “Once a quarter, we send out the Net Promoter Score survey and we’ll see what people feel about us.” At the end of the day, you could get great ratings. You could get some success on the project. You could even have, “Would you recommend somebody to use our services?” They’re still at a satisfied client level. You mentioned that engaged means that they humanize your transaction, you work with them on a human personalization where automatically it’s a deeper relationship.

I remember once we had a large client of ours and somebody said, “Maybe you send me the invoices. I would like to try to see if I could save you some money.” The client said, “You don’t see between the two lines. You only see what’s happening in the relationship other than the lines on the QuickBooks invoice.” When I heard that back, not only I understood the difference between a satisfied client and an engaged client, I also started appreciating to understand that this is where the focus needs to be. At the end of the day, if somebody is comparing invoice-to-invoice, if that person wants to save money, they’ll be able to save money. If there’s something else that you bring to the table, which you have an engaged client, they are feeling a lot about, “I love doing business with this company.” Automatically, you bring to the table something else than just delivering the service.

I suspect that your audience is already doing this to a certain degree. Most people do that naturally and it’s in different ways because it’s the sales rep and customer service people. Companies develop a personality if you try to. There are a lot of businesses out there that people like doing business with the business because there’s something about the business that has a personality, whether they’re giving back to the community or whatever it is that creates that personality. It’s that personal connection that makes a difference. To create advocates for your business, people who are out there advocating for what you do, that’s where that personal connection is so important. Because they not only want people to experience your value, but they want you to be successful. That’s the best of both worlds. When people see your value, they want others to experience it, but they also care about your success. That comes from that personal connection that you create with customers or clients.

Let’s speak about number two, which is leveraging the engaged clients into getting referrals. You mentioned something that sometimes people have the first step, but they’re not leveraging it in a way that they don’t have the systems in place to be able to get those referrals. What would be some practical tips you could share with our audience as far as how to go about it?

Most people see referrals more as the icing on the cake rather than the cake. Click To Tweet

The most logical and the basic level would be to ask and to do it in a way that isn’t pushy and aggressive. A lot of people don’t ask because they don’t want to feel needy or unsuccessful. Some people carry around the mistaken belief that asking for help is a sign of weakness when we know it isn’t. Sometimes they haven’t been taught in a way to do it. One client I worked with, they brought me in to train a very large sales force around this. I never forget, a lot of people came up to me and said, “Bill, they’ve been telling us to get referrals forever, but they never taught us how to do it. Now, I know how to do it.” A lot of it comes from a lack of confidence and not having a methodology. The core of asking is to make sure that you’ve earned the right. It’s to do what I would label a value check-in or a value discussion and some people say communication review. Take that time out. Everybody knows the concept of working in your business versus working on your business, reading this blog is working on the business.

A parallel to that would be working in your relationships and working on your relationships. Most of the time you’re working with customers or clients, that’s working in the relationship, working in the business, but now and then, you want to take a time out to reflect on, “How is this relationship going? How is this business relationship going? Are we meeting your expectations? Has anyone dropped the ball along the way?” I’m encouraging everyone in your organization to not just train people how to handle the problems, which is very important but also to train them to look for the problems. If you get the sense that a client or customer is a little bit disgruntled or not happy, don’t walk away from the conversation. Don’t hang up the phone hoping the problem will go away because it will along with the customer.

This culture of checking in and making sure that we’re having transparent communication with our clients or customers creates more engagement, just in doing that. That’s the first step in asking for the possibility of introductions which is tell me the value you feel you’re getting from the relationship. Has anyone dropped the ball that we should know about? There are different ways to do this. On a scale of 1 to 10, where are we with you now? If you know they filled out the Net Promoter Score survey and they gave you an 8, 9 and 10, you thank them for the survey and then you say, “It sounds we’ve got a happy customer. Can we talk a little bit about who else should know about us, who else we can bring this great service to?” That’s the gist of what that asking looks for.

Depending on the company, some companies like to do promotions where they reward clients. More of a commoditized business, then you can do coupons and certain types of promotions to encourage people. You see lots of different companies rewarding customers for sending people their way. It depends on the business. That doesn’t fit every business but it can fit some businesses. If we’re trying to create this culture, you want everyone in the company to know that we’re trying to grow the business, build the business and attract more people through referrals and introductions. Everyone has a role in that. To make sure what the goal is and what every person’s role is in accomplishing that goal, whether they’re serving a customer directly or serving someone who is serving a customer, everyone has a role in making the firm more referrable as well as the appropriate ways to be proactive.

This reminds me of a story that I have. We have an IT provider doing great work with us. He had these check-ins and he scheduled a 45-minute quick meeting discussing what they’ve accomplished. We discussed a couple of add-ons, what we could spend more money with the IT provider. At the last minute, he says, “Do you trust us? Did you get the value?” It’s similar to what you mentioned, then they asked me for a referral. I said, “I have to think who the right company I could introduce you to.” For most people, this is already too far for them and the good part is he followed up with me, a recap of the meeting and then he said, “I’ll give you a couple of days to think about our introduction and I’ll follow up again with you.”

When he followed up, I had to have that name and I made an introduction. For having the meeting, he sent me a gift card even if he didn’t close the sale. I felt that I learned from that experience a couple of pointers, which is first of all, the added value which means the meeting was scheduled to review your account. Even from a marketing perspective, I know that this is scripted. This is part of that meeting but I appreciate it that he showed appreciation just for setting a meeting with somebody, even if it’s still early in the stages of getting that client.

You could become referrable without doing business with someone, depending on the nature of the business. If you helped someone get clear on their situation related to the work you do, that’s very valuable for them. To get them to stop and think about something that maybe they’ve been putting off, that’s valuable to them. You might be able to introduce them to another resource, related or unrelated to the work you do. That’s also bringing value. There are a lot of ways that one can become referrable before you do business with them.

LTB 43 | Culture Of Referrals
Culture Of Referrals: An email handshake can be a great way to be introduced.

 

What’s the line you use, referrable and introductions?

You’re hearing me using the word referrals and introductions interchangeably. Old habits die hard and it’s easier to say referrals and referrable than introducible. When we’re with a prospect, a client, a customer, a center of influence or a strategic alliance, we want to use the word introductions. We want to say, “Let’s talk about who you might be able to introduce me to. How do you feel about introducing me to Joel?” Coming with specific and looking for introductions, that’s the word you want to use. That’s what we want. Some people have a funny reaction to the word referrals as well. I’m not sure why. Maybe they had a bad experience or something. They see referrals as too salesy but they enjoy making introductions. We err on the side of using the word introductions.

When they hear the word referral, they almost take responsibility for that relationship going forward. If I do an introduction, my conversations started and ended through that introduction. I like the introduction part. From your experience, how do you teach companies to do it? As you mentioned, the people within a company, they need to learn how to do it. Are there dos and don’ts about being pushy or not being pushy? Some people will say, “How much could I ask my client to do for me? He finished a large project and paid for it. He was happy, but I get a name and run with it.” What is your opinion about getting a name and running with it or the clients or that person making the introduction?

Getting a name and running with it doesn’t work as well as it used to. There was a time when people answered their phone. You might be able to reach out to someone with an email and say, “David recommended we talk.” It’s not as effective as it used to be. In my case, in my own business and what I teach people to do is to try not to settle for that, let your referral source know, “They would probably prefer to hear from you before he hears from me, don’t you think?” “Yes.” “Let’s talk about how you introduced me so everyone feels comfortable.” What we’re trying to do here is two things. There’s the way about an introduction. When the Food and Drug Administration is approving a drug for the market, it wants the drug to be safe and effective. That’s what we want for introductions.

We want them to feel safe for everybody. We want people to feel comfortable and it would have to be effective. Meaning, we’d like at least to pique the interest of this new prospect of ours. That’s what we’re trying to create. “Let’s talk about how you introduced me to David. My guess is he’d like to hear from you before he hears from me. What do you think you need to say to him? How do you think they’ll react to this?” We talked through this a little bit and we show our referral source the importance of doing it this way. We’re going to help them protect their relationship and feel more comfortable. We’re likely to get a better connection because of that. Getting introduced in person is great. If you can make it happen, whether it’s breaking bread together or if you do any client or customer appreciation events in a social setting, that’s always great.

What we have to be careful of is sometimes it takes time to create the logistics for that and we don’t want to get to a point with the enthusiasm for making the introduction is diminished. If people are used to connecting in person if they break bread together on a regular basis, if we can find a way to do that, then great. By all means, get introduced in person. On the other hand, for most people and most businesses, an email introduction, I sometimes call it an email handshake, is a great way to get introduced. Now you’re connected with a new prospect, the referral source has done their job. They might even say some very nice things about you and you stand a much better chance of getting that person’s attention, setting up a quick phone call and going from there.

Let me ask you one final question on the referral partner. I want to move on to a little bit about your book. One of the objections we hear when companies speak about referrals is how scalable is it? If we put ads, if we spend on marketing, we have that call center funneling leads into our system. We could project referrals are ultimately not somebody you project because first, the person needs the referral and then you have to have the introduction. From your perspective, you have an opinion about it. Is it a scalable model?

It is a scalable model. The whole idea of measuring and predicting takes a little time. You have to figure out what the numbers are for you. A lot of businesses who have been doing this for a long time can make some predictions, but initially, you won’t be able to. The numbers and the predictions are going to depend a lot on a type of business, the type of relationships that you form with customers or clients. The more transactional your business, the less referrable you become and the tougher it is. It depends a little bit on the average or the general personality of the people you meet with. For instance, I do a lot of work in the financial services sector and I saw a lot of financial advisors. If they’re asking engineers for referrals, if they’re asking analytical type of people, you’re not going to get as many from people like that as you are if you’re asking marketing types and business owners who are used to doing this sort of thing.

People often recommend and do business with people they like. Click To Tweet

There are a lot of variables that go into this, but eventually, over time you can start getting some numbers, you can start predicting and scaling from this. For some businesses, you can be referral only, you can build a business just that way and there’s enough activity and it’s the right activity. In other businesses, it’s not enough. I was brought into a company to do a program where they do a lot of internet leads. They have a call center and they set appointments but they don’t have enough of those to go around to feed their sales force. They make more money. The sales are bigger and more profitable when they come from referrals so they want that as well. By adding the referral component, they’re lowering their cost for opportunities. It doesn’t cost as much to get into. This is an in-home sale so it doesn’t cost as much to get into the home. For most businesses and this is for the one particular, the average sale is larger when it’s from a referral and the close-ratio is much higher when it’s from a referral. They’re using referrals to be a big part of it, but it’s not the only part.

I appreciate you sharing those tidbits of knowledge on the referral side. I want to turn the conversation into your book, Radical Relevance: Sharpen Your Marketing Message – Cut Through The Noise – Win More Ideal Clients. When I see the word radical and then sharpen, it is a very powerful message in there. What inspired you to write? Let’s dive in a little bit about the book itself.

What inspired me to write it is a couple of things. I think just about every business person, business salesperson, marketer, you name it, faces, the two main enemies or villains out there that we’re trying to battle against is number one, marketing message overload. Everybody is inundated in this information world of ours where it’s so easy to put stuff out and broadcast. I did a lot of research on neuroscience and there’s a chapter in a book on the Neuroscience of Relevance is the brain, because it’s main job is to keep the body alive. It doesn’t like to get overwhelmed. It’s doesn’t like to get confused. It wants to know, “Where am I? Am I safe?” It automatically shuts down to anything irrelevant. It pays attention. You are walking through an airport. You’re barraged by messages everywhere, even on the floor these days. If you see a photograph of someone, product, or you hear someone talking about and you have some interest in that, then your awareness goes right to it because it’s relevant to you.

Because of that marketing message overload, we have to create better marketing messages. We have to sharpen, target, narrow and become more precise with our marketing message. That’s one part of it. The other is one of the things that we battle with a lot of our prospects is inertia meaning depending on the business, that either your prospects are stuck doing nothing. Maybe they’re in pain, but the pain isn’t big enough to get them to do something, they don’t realize that there’s a tumor growing in their business and they’re not aware of it or getting them to change directions. Sometimes we have to fight the incumbent, who they’re using now. That’s why I wrote the book because it’s to help us attract more of the right people and repel the wrong people. We only want to attract the people that are perfect for our business and we’re perfect for it. I call it right to fit clients or customers. The book is to be able to cut through all that noise with the best possible messaging and some ways to compel and move people to take action that’s in their best interest.

People could sometimes hire a marketing agency to get to the core of what the business stands for, but somebody reading this blog is trying to figure that out, what is it that they need to look at to get that information?

LTB 43 | Culture Of Referrals
Radical Relevance: Sharpen Your Marketing Message – Cut Through the Noise – Win More Ideal Clients

The first thing we have that any business has to do is figure out what the target is. You can have more than one target, but you can’t be all things to all people. I don’t care what your business is in most cases unless it’s a commodity of some sort. We have to get crystal clear and as narrow as possible as we can because the narrow we get, the more precise we get, the more powerful our messaging becomes. I’m sure as a marketing expert, you see this all the time that people make their messaging more inclusive, they open the tent a little bit larger when they should be making it smaller. The larger and more inclusive you make it, they’ll water down your message. If you’re going to have more than one target market, make sure that they’re very distinct, your marketing programs and messaging around that are specific to each specific target market.

If you have people coming to your website and they come from different places, they represent different personas or different markets, have them self-identify very quickly on your website, on your homepage, then click the link that’s going to take them to the information that’s relevant to them. You don’t want to have a website that tries to give everything to everybody and then it doesn’t make sense to anybody. That’s one of the most important things you can do. From there, once you have your target or multiple targets, then you narrow it down to the bullseye. The bullseye is again that right fit client. You’re very familiar, Meny, with the idea of a persona. Identifying and even naming this man, this woman, whoever your market is and it could be both. You can have more than one persona, but we get crystal clear on these people.

Most larger companies who have access to the big data, all the data mining, demographics and psychographics of their clients, they’ve done this, they know exactly who their ideal clients are and who they’re targeting their message to. Even if you’ll look at advertisements on television, print, radio or whatever you can see the good ones. You know they’re targeting the people they want and not worrying about the rest. That’s what we want to do. We want it in our messaging, we want to attract the right people to us and we want to not worry about the rest. They go and they get served by somebody else. Ultimately, we want to help them take action, that’s in their best interest. That’s the essence of the book is being more precise with our message.

I encourage you to get a copy of the book, Radical Relevance. This is a great book if you want to get a little bit deeper into understanding how to go about it. Let’s go through the four rapid-fire questions. Number one, a book that changed your life.

Other than the ones that I wrote because they changed my life.

That qualifies.

I’ll give you one more and this is a long time ago. This is my favorite author when I was at college. He was Hermann Hesse and Siddhartha is the book he wrote. All his books that had a very spiritual bent to them got my mind growing up and alive. Anything by Hermann Hesse, I read everything by him and Siddhartha was his most popular one.

Number two, a piece of advice you got that you’ll never forget.

I would say number one or the biggest one and everyone knows this but it leads my life in a lot of ways and that is, “What you put your attention on, grows stronger in your life.” Earl Nightingale said a long time ago, “What you think about, you become,” but it’s more than just what your thoughts, it’s your attention to your being. When you put your attention on negative stuff, then that starts to grow and vice versa. When I catch myself getting down in a negative thought pattern or getting resentful around someone, I catch myself and I stop and I shift because I don’t want to put my attention onto that.

Number three, anything you wish you could go back and do differently?

I used to be a drummer in a rock and roll band. Part of me wishes that I had worked harder and was more dedicated. I got good and I worked as a professional musician for a while. I did a talent assessment and I realized I’d be working Holiday Inns for the rest of my life so I didn’t want to do that. That’s one thing. I’ve maybe although I’m very happy with what I’m doing now. That’s certainly one thing I wish I could do differently.

Last and final question, what’s still on your bucket list to achieve?

I’m an adventure traveler. I love to do adventures. I’ve reached the summit of Kilimanjaro. I’ve done weather camping in the New Arctic Circle. I want to go dog sledding. I want to go to Finland or Canada and I want a mush with the dogs and experience that whole scenery and being with the dogs and working hard.

The more transactional your business, the less referable you become. Click To Tweet

Bill, thank you so much for joining us. I know your time is valuable. That is why in the name of our audience, we will forever be grateful for sharing some of your time with us.

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About Bill Cates

LTB 43 | Culture Of ReferralsBill Cates is an internationally recognized client-acquisition expert, author, and speaker who motivates others to take action with proven strategies.

A successful entrepreneur, Bill started and sold two book publishing companies. Turning his attention to help other businesses grow, Bill has written four best-selling books: Get More Referrals Now, Don’t Keep Me a Secret, Beyond Referrals and Radical Relevance.

Bill has delivered his business-growth message to over 500,000 professionals, small business owners, and salespeople across 5 continents; helping them increase revenue without increasing their marketing budget.

Bill Cates’ client-acquisition system has been featured in such publications as Success Magazine, Entrepreneur Magazine, Selling Power, the Huffington Post and The Wall Street Journal. And his own business success has been featured in Money Magazine.

Bill is one of the founding members of the Million Dollar Speakers Group and was inducted into the Professional Speakers Hall of Fame in 2010 (182 living members worldwide).

Bill is also somewhat of an adventurer. He has trekked through the Himalayas of Nepal and the Andes of Peru. He has lived on a houseboat in Kashmir, India, climbed Machu Pichu, reached the summit of Mt. Kilimanjaro, camped in Arctic Circle… and Bill has toured the country as the drummer in a rock and roll band.

Meny Hoffman

Meny Hoffman

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