How to Generate Referrals Without Asking

Debunking Myths and Understanding the Psychology

A few months ago the PICA community gathered for a webinar with Stacey Brown Randall, a leading light in business referrals strategy. She spoke about one of the biggest problems in solopreneurship: the feast-famine cycle. One minute, there’s an overabundance of work, and the next minute there’s none.

“I get a couple clients, I put my head down and do the work. I look up when the work is done, and there’s no more work to do. Now I gotta go hustle and get some more clients.”

How do we put a stop to that cycle? How do we bring more clients into the fold? How do we systematize the business development process? And how do we do it all without spending money and effort on digital advertising and direct marketing?

Stacey’s answer: focus on generating referrals.

Generally speaking, referred clients close faster, haggle less, contract you more, stick with you longer, and, most of all, they compound. Referrals beget referrals.

But not all referral strategies are created equal. In this two-part article series, we’ll take a look at some of the worst referral strategies out there. And then we’ll take a look at one of the best, discovering an approach to biz dev that Stacey says can double, triple, or even quadruple returns in a single year. 

The Worst Referral Strategies

Plenty of ink has been wasted about referral strategies, but Stacey’s skeptical of many popular “pro tips.” Here are a few of the most misguided pointers that you’ll find online, at mixers, and in seminars…

1. Just Ask

If you go out looking for referral-generating help, the first and worst piece of advice that you’ll hear is this: “Just ask.”

If you’ve ever worried that asking makes you look desperate or that asking might make your existing clients uncomfortable, Stacey’s says you’ve got good instincts. Asking does look desperate, and it does make clients uncomfortable.

2. Offer Compensation for Referrals

Another popular strategy is to offer some sort of kickback, bonus, or commission to clients who make successful referrals. This can indeed motivate existing clients to bring in new faces, but Stacey identifies two big problems with taking an incentive-based approach.

First, if the compensation arrangement is under the table, which it usually is, then it can lead to bad feelings down the road. What happens when your new client gets wind of your incentive program? How will they feel when they discover that the original referral they received was disingenuous? Will they feel exploited? Manipulated? 

Second, external incentives of this sort might raise the quantity of referrals you’re getting, but they’re also likely to lower the quality. As Stacey puts it, “You're not really paying for a referral anymore. You're paying for a lead.”

3. Launch Gimmicky Promotions

About fifteen years ago, a new trend swept through the solopreneur community: instead of avoiding the discomfort of asking for referrals, people started leaning into it. Consultants started going bigger, bolder, and cheesier with their shameless self-promotion.

Stacey recalls being handed a pack of branded EXTRA gum and a note that said “I’ll go the EXTRA mile for your referrals.” She also recalls seeing email signatures with quippy lines like “Don’t keep me a secret.” And she still sees them today.

But a decade and a half later, she says, this approach has gotten old. It has retained all of its original tackiness, but none of its original charm. Plus, it generates none of its intended results.

4. Network, Network, Network 

Perhaps one of the most insidious recommendations out there is to “Grow Your Network.” The usual line here is that signing new clients and generating new referrals requires being in the right place at the right time. But Stacey thinks that’s bogus

“Do you know what it really means to be in the right place at the right time?” she asks. “It means you’re in all the places, at all the times.”

There’s a mixer? You’re going. A chamber of commerce event? You’re going to that too. A committee? An expo? A conference? A garden party? You’re going, you're going, you’re going, you’re going.

Stacey adds that this strategy isn’t just unreasonably demanding. It’s also built on the false premise that you have to be seen in order to stay top of mind. We’ll soon discover just how untrue that is.

5. Hope

Finally, there’s the oldest, simplest, most ineffective strategy of all: hope. Namely, the hope that if you do good work, people will make referrals of their own accord.

Write this down: Hope is not a smart business strategy.

Ultimately, the best strategies will involve referrals happening naturally, without you explicitly asking, incentivizing, self-promoting, or networking. But they won’t happen because you hoped. They’ll happen because you took the right steps to nurture and grow your client relationships. And because you rooted your approach in the science of referrals.

The Science of Referrals

In Stacey’s experience, the best referral-generating strategies aren’t built on anecdotal observations or “common wisdom.” They’re built on observable science. To that end, she cites three major principles that guide her work.

1. The Happiness Trifecta

According to neuroscientific research, doing something altruistic doesn’t just make us feel better about ourselves emotionally. It also makes us feel better chemically. When we’re kind or helpful to others, our brains get blasted with three pleasure chemicals: oxytocin, dopamine, and serotonin—the so-called “Happiness Trifecta.”

The point? Referrals aren’t about you. When your client makes a referral, it’s because helping other people literally makes your client happier.

Also notable: most of the time, the person your client wants to help isn’t even you. Which brings us to…

2. The Sociology of Social Networks

Your clients aren’t interested in helping you. They’re interested in helping their friend, family member, or colleague. Someone in your client’s tribe has a problem, and an eon of cultural conditioning has taught your client to help people in their tribe.

The only reason they’re making a referral to you is because they trust you to deliver.

So again, Stacey says: Referrals aren’t about you. It’s about your client getting to be a hero by helping someone in their network.

This distinction is crucial because it illustrates the core failure of the five misguided referral strategies that we discussed earlier. Those strategies all make referrals about you: your needs, your incentives, your gimmicks, your networks, your work. Perhaps the reason why those strategies all feel so uncomfortable to operationalize is because we know, deep down, that we’re cutting against the grain of actual referral psychology. 

3. Behavioral Economics

The behavioral economics of reciprocity are simple: When you do something generous for your clients, social norms dictate that they will return the favor.

Be helpful. Be kind. Be thoughtful. Be generous. And you will get the same back in return.

It’s still not about you though. It’s about the space between you and your client. It’s about your relationship with them.

Growing Your Relationship With Existing Referrers

So how do we move past all the bad referral advice and start applying this science of referrals? Next month, we’ll take a deep dive into Stacy’s instantly-actionable advice. We’ll discover how to identify existing referrers and build systematized, low-effort campaigns to nurture them. We’ll learn how the right language paired with the right concept and the right rollout can keep you top of mind. In short, we’ll cover everything we need to know in order to generate new referrals without asking.

~~~ Additional Resources ~~~

●     Watch Stacey’s full webinar

●     Buy Stacey’s book, Generating Business Referrals Without Asking: A Simple Five Step Plan to a Referral Explosion

●     Check out PICA’s other free webinars 

●     Explore the PICA Community

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