How To Use The Referral Multiplier
Written by Dave Lorenzo on July 18, 2016 / Podcasts / Referrals
Discover how to effectively use the referral multiplier to grow your business.
This is the second episode of The 60 Second Sale Show. In case you missed episode one you can follow this link to listen: How To Build Valuable Relationships with Your Clients
Hey there work place warriors, it’s Dave Lorenzo and this is the 60 Second Sale Show, and today’s show is about the referral multiplier. Today, I’m going to share with you the secrets of the referral multiplier. If you want to grow your business quickly, it doesn’t matter if you are an entrepreneur, or you are a sales professional, or if you run a super big company the best way to grow your company fast is through referral. Think about it this way, if you had 50 clients, just 50 clients and you were able to convince each of them to give you one new referral four times a year, and you only closed 50% of those people who would be able to more than double, in fact, you’d be able to triple the size of your company in just 6-1/2 months.
That’s right, you’d be able to triple the size of your company by just having a closing ratio of about 50% of the people who are referred to you by the folks who know you, like you, and trust you the most your clients. Today, you are going to discover the secrets of the referral multiplier. This is one of the most powerful strategies you can implement. The referral multiplier was born out of necessity.
There’s the old expression necessity of the mother of invention, and the referral multiplier came about when I was sitting across from one of my best clients. In fact, my first client who was in the legal profession, my first attorney client was sitting across from me, and we were resigning. She was signing up for a second year of work with me. I was thrilled because she was the very first lawyer I had ever worked with, and we were having a discussion, and she said to me, “Dave, I can’t tell you how happy I am. In the first seven months that we’ve worked together my business has doubled, and I was absolutely thrilled with the way I did it. I didn’t have to do it in a way that made me feel like I was out selling vacuums door-to-door. I am beside myself with joy that we were able to grow, and work together for a year, and I’m happy to sign up for a second year.”
As she was signing the paperwork, I said to her, “Anna, thank you so much. I can’t tell you how much it fills my bucket to hear you say that. It makes me feel like I’m on top of the world. I have to ask you one question. Why is it that since you are so happy with me you’ve never sent me to someone else? Why is it that you’ve never introduced me to someone with whom I can do business? You’ve never given me one referral in the entire year we’ve worked together?”
At that point, she put the pen down, and she looked at me, tilted her head and said, “You know, I don’t have a good answer to that question,” and together we brainstormed, and what we came up with was the fact that number one, Anna didn’t know that I wanted referrals. Sounds silly, right. She didn’t know that I actually wanted her to introduce me to other people who were just like her good, high quality attorneys who are looking to grow their business.
The second thing was she didn’t know who could she refer me to. She didn’t know to whom I would like to be introduced. She didn’t have an idea in her mind. She didn’t have a mental picture of who the right person was to connect me with, and then the third thing she discovered was she didn’t know how to introduce me. She didn’t know that I wanted referrals. She didn’t know who to introduce me to, and she didn’t know how I wanted to be connected with these people.
That really got me thinking, and I developed a process that would help me attract more referrals from my best clients, and in turn, it will now help you attract more referrals from your best clients. Think about it this way. If you are currently out there spending 3, 4, 5, 6 hours a day knocking on doors, looking to meet people who can do business with you, and you’re doing this in high volume, and you have a closing rate that’s really good, maybe 30%, 40%, even 50%. Imagine if the groundwork has been laid ahead of you, and you connect with people who already think of you as an expert because you’ve been introduced by someone they’ve already placed their trust in. This is what a referral can do for you.
Without any further ado, I’m going to introduce you to the three step process you can use to attract more referrals in your business immediately. Now, I know what you are thinking. You are thinking to yourself, sure Dave. If I were that easy, if I could go out, and get all my clients to give me four referrals a year, and then I could close two of those four, life would be great. I know. I know but it’s easier said than done Dave. I’ve tried asking for referrals. People look with a deer and the headlights look. That’s what you are thinking. I know that.
I used to think that to. Here’s how we combat that. Step number one, starting up a referral conversation. Usually, I start a referral conversation by asking the other person how he finds his business. I just ask them point blank, tell me about your best client, and they tell me the story about their best client, and I say, how did that client come to you? How did you attract that client? After they tell that story, it’s natural, 90% of the time they’ll say, Dave, tell me how do you find your best clients? I say, well, you know what? I’m really glad you asked that. I find my best clients most often through referrals.
They look at me, and they go, really, and I say, yeah. Would you like to hear how I can attract more referrals in a day than most people attract in a month? They say, of course, I would like to hear that, and that leads me to step two, and step two is getting that person into a referral mindset. Now, the key is getting that person to shift from thinking about his clients to thinking about people he may know and he can introduce me to.
Our brains are just like computers. I want you to picture right now your brain looking just like the desktop on your computer. You have file folders on there, and when you click on the file folder it opens up, and it reveals inside, ta-da. Files. Your brain works just like that. You have to get the person with whom you are speaking to open up those mental files that reveal the people they know to whom they can make an introduction. The people they know they can introduce you to.
Here’s how we do it. The way to do that is to bypass all skepticism, to bypass the critical thinking section of the brain by telling a story. To get the other person into a referral mindset what I do is I say to them, well, Joe, let me ask you? Have you ever met anyone who is famous? You ever met anyone who you admire, and Joe will say, sure. I say, do you remember the story, the circumstances, the situation under which you met them, and sometimes they’ll look at me a little funny. They may not remember all the details of the situation in which they met the person. So I tell them a story of how I met someone famous.
The story that I always use in this situation is one of the moments that will standout in my life forever. In 1989, I was a bellman in a hotel, and I was in my senior year of college, and I’m standing in the front desk of this really busy hotel in New York. I’m looking across the lobby thinking about what I’m going to do after my shift that night. I see two people walking across the lobby. One is a beautiful, striking woman. A woman who looked like a model. She looked like an actress. She’s holding the arm of a taller, stalky man who’s kind of hunched over, shuffling his feet, and they are both pulling luggage.
My bellman money making instinct kicks in. I run over to them, and I notice as I get within four feet of them that it is Muhammad Ali, and his beautiful wife. I say to them, good evening. Welcome to … It was the Winchester Marriott. Good evening, welcome to the Winchester Marriott Hotel. My name is Dave, would you like some help with your luggage? Mrs. Ali, actually her name is Williams. It’s Yolanda Williams. She goes by Lonnie. She says, absolutely. Will you help us, and show us where we can check in.
I take them to the front desk. They check in. After checking they get into the elevator. We are riding up to the room, and I look and I say, champ. It’s an honor to meet you. You are my favorite boxer of all time, and Ali looks over at me. He gives me a little bit of a smile. At this point, it had been probably about seven years since he had revealed that he had Parkinson’s Disease, and he didn’t speak very much, and there were obvious signs that he was suffering from the disease.
We get to the room, and I put their luggage on the luggage stand. I offered to get them ice. I showed them how to work the air conditioning. When I come back, I set the bucket of ice on the table. I shake Mrs. Williams hand, and she gives me a very nice tip, and I look over at Muhammad Ali, and I say, champ. It has been an absolute honor to walk you up to your room. This has been the thrill of a laugh time. I said, last year I got to meet Mike Tyson, and I had a conversation with him, and he’s a great champion but you are far and away the best of the best.
At that point, I noticed Ali take his hand, and tap his wife on the side, and Mrs. Williams at me and said, before you go, would you mind telling us the story about how you met Mike Tyson? Would you share that with us? I said of course. Tyson was standing in the hotel, and he did not want to be in the public space. He didn’t want to be recognized by people so every time he would go to leave his room, one of us would have to escort him through the service area, through the employee area so he could get in and out of the hotel unnoticed.
I was selected to do this one time. I rode down with him in the service elevator, and we went through the kitchen. We had a Polynesian restaurant in the hotel, and we had brought the staff over from the Far East to cook in the kitchen, and I was walking with Tyson through the kitchen, and he said, I can’t believe none of these people in this kitchen recognize me. I thought that was kind of funny since he didn’t want to be recognized yet he was struck by the fact that nobody int he Polynesian kitchen recognized him because they didn’t know anyone. They had just come over from South East Asia.
At any rate, we exit the building, and I said before he got into his car, I said, champ. I just have one question for you. I’m a huge boxing fan. Tell me, when you were growing up, who did you admire? He said, hands down, easily Muhammad Ali. He was the greatest fighter of all time. I told the story, and that’s how I ended the story with Ali, and his wife, and as I said that Ali motioned to me to come closer to him. He took very halting steps forward, and with all the strength he could muster he got into a fighting stance, and in slow motion, the slowest of slow motion threw a left cross, which gently connected with my jaw, and he followed it up with a right upper cut that ended in giving me a huge hug.
That moment, in that moment I felt like was on top of the world. Why? Here I am, a bellman, a nobody, someone who most people wouldn’t even recognize when they pass them in the lobby yet this public figure who was arguably the most recognizable person on the planet made me feel like I was the most important person in the world in that moment.
That’s the story I tell. What I want to get people into a referral mindset. I finish the story, and I pause, and I say to them, you have to have a story somewhere along the line similar like that, similar to that where someone made you feel special. The person always has some sort of story just like that. They share it with me, and now, they are their mind is open to not only telling me about famous people they know but the can easily recall everyone they know if I give them the right clues.
That takes us into step three in the secrets of the referral multiplier, and that’s what I call the memory jogger. At that point, after you’ve got that final folder open in their mind, all you need to do is reach in, and pluck out the exact referral you want. You finish telling the story. They tell you their story, and you say, wow, that’s a great story. I love hearing about how people meet other famous people. A great referral for me would be someone who is the head of a large company, and focused on sales. Joe Smith the director of sales for XYZ Pharmaceutical Company. They have 130,000 sales people out there. That would be a great referral for me. Do you happen to know that person?
When I ask for a referral, I’m doing some specific things. I’m asking for the exact person I want to meet but I’m also giving the title of that person vice president, executive vice president of sales. I’m saying what company he works for, and I’m also saying what industry he’s in. You give the exact name, the title, the company, and the industry. Very, very important. Why? Because they may not know that exact person but they may know somebody who works in that company. I’d be happy to be connected with some senior in that company because I can ask them for an introduction.
They may not know the person, or the person in the company but they may know somebody in a competitor’s company. They may not the person or anyone in that company but they may know the exact person in different industry. What you’re doing is you are giving them different things that will trigger in their memory, that will jog in their memory an ideal person, an ideal referral for you. Those are the three steps in the referral multiplier.
Step one, getting to a referral conversation. Step two, get the other party into a referral mindset by telling a story, and then getting them to tell you a story about their introduction to a famous person, and then step three, use a memory jogger to ask specifically for the ideal referral for your business. Use this referral multiplier immediately. Go out and practice it today if you have to. Jump on the phone, and use it with a client immediately because everyday you wait to use the referral multiplier is a day you are not making money. This will make you money right now. Go out and use it immediately.
All right. It’s time for the mail bag segment of our show, and today, we have email, and the email comes from Mike who’s a sale executive in an electrical supply company. Mike’s question is a really powerful one. He says, how do I ask a corporate executive for referrals. Usually, they are highly competitive, and they don’t want to share me their competitive advantage with somebody else. How do I ask them to refer me to someone?
Mike, here’s what I’ll tell you. I get this question all the time, and I find in my business that people use me as competitive advantage and they don’t want to introduce me to their competitors. I totally get it. You have to respect that. You have to respect that in them. Here’s what we do. We use the referral multiplier that I just outlined but we use it to get an introduction to someone in a trade association who can book us as a speaking gig for example. If you attract your clients initially through speaking you can ask the person what trade associations they belong, and ask for an introduction to the person who’s the leader in the trade association.
If this person is not a member of a trade association, you can ask them what articles they read, what journals they subscribe to, what blogs they go to, and you can get an introduction to the editor there perhaps so that you can write articles, and post them in those journals or on those blogs. The key is to find out who these folks know, and figure out how you can make the best use of their contacts. Don’t necessarily think of it as immediate business. You can also think of it in a more strategic way that they can introduce you to people who will help you advance your business.
Mike, I’ll tell you. I get what you are saying. I understand completely, and you can ask for introductions to specific people trade associations, and people will be happy to do that. That won’t violate their competitive instincts. They’ll b e referring you to a trade association, or something that they view as a more collegial environment.
Folks, as we wrap up today show, I want to remind you that everything that we introduce on the show should be implemented immediately. The name of the show is 60 Seconds to the Sale, and our business is about speed. The faster you implement the things that we introduce, the faster you will make more money.
Our goal as always is to help you make a great living, and live a great life. Until next time, I’m Dave Lorenzo and we’ll see you here at 60 Second Sale.