Referral Psychology

The Best Marketing Method
Every business owner likes referrals. Why? Because they are the easiest, cheapest, most effective form of marketing. The most difficult challenge in sales is cold-calling. The best way to cold-call is not to cold-call. Cold-calling is the last refuge of the incompetent. It’s what you do when all else failed because you failed to generate warm-calls and leads. Your alternative is to sit there and go broke.

Perceived Risk
The primary issue that stops referrals is fear. If I mention you, and you turn out to be an incompetent crook, I am toast. I will lose my customers and my reputation in the area, which prevents from recovering by getting new customers. This is the nightmare scenario. Do I want to bet my entire business and livelihood on you?

Sure, I may get a few more customers in return but unless I am desperate, is it worth the risk?

There are two primary motivation factors:
1. Desire for gain
2. Fear of loss
Motivation means causing action as in “when my ass caught on fire I was highly motivated to jump in a cold icy lake.” Which coincidentally is about how enjoyable cold-calling is.

Fear of loss is 80% and desire for gain 20% overall for most people. For every exception (I want to be a billionaire by age 30) there are 4 more that simply want to pay the bills and go fishing.

Here are the decision factors for providing referrals:
Do I like you?
Are you trustworthy?
Are you sane and sober?
How long have I known you?
Do I know any of your happy customers?
Are you competent and skilled at your craft?
Are you part of a larger organization that can in effect vouch for you?
Would I hire you myself or refer you to my friends and family?
This is a high bar and for good reasons. If you think you can just wander around and schmooze, or charm people, you are 20% right and 80% wrong. If you have the personality of a fire hydrant you are 99.9% wrong. If you are ugly too, you are 100% wrong.

A risk-reward calculation will be done subconsciously and only when it is clearly in your favor will you get referrals. Your task is now defined. You want to give the answers to all of the questions they have, before and without them having to ask you.

Instant Rapport
Don’t jump in and start blabbing about you. Nobody cares about you….. yet. The only reliable way to have somebody care about you is for you to care about them first. But what if you don’t? It’s irrelevant as long as you appear to care and the way this happens is for you to shut up and get them to talk first. The topics that are most like sweet music to their ears are stories about THEM.

After a while, with you attentively listening, and making little noises indicating you are awake, and making eye contact, and asking clarification questions, a strange, yet familiar, phenomenon will occur. The other person will start asking about you. If you want to have some fun, resist the urge to jump right in and instead hesitate. the more you hesitate the more agitated the person will become. They will begin subtly, and then blatantly insisting that you talk about you. This has been called the Law of Reciprocity. It’s as real as gravity and as unforgiving of non-believers.

1 Minute to Trust
Your story, if in a suitable situation to talk about business, should be kept absolutely simple. In fact of the hundreds of things you could ramble on about, only a select few are critical and can be communicated in the 1 minute you should allow. Even if she went on and on for an hour (likely exaggerated in your mind), keep it to 1 minute. Assume that the other person is so far merely being polite and is no more interested in you as you were of her.

Here is your one-minute story:
Closer: I love what I do… I make people happy by making their home or business beautiful…

That should take less than 10 seconds. You could go on for 50 more seconds but you will resist the temptation. Instead of you trying to make people listen, let’s get them to ask you to go on with the story. The most effective way to do this is to do the 1,2,3 shuffle. You make a brief statement. Then you make a second which is crafted to purposely leave the image you were painting hanging out there unfinished. This makes people crazy. They must hear the rest. If you don’t offer it they will ask. If they ask, they are inviting you to tell your story which is the opposite of you trying to force them to listen.

People do what they want to do.

Just make them want what you want.

Possible Referrer: How do you do that?

Here is where you will may start to lose it. You think they are now as interested in what you do as you are. They are not. They merely are reacting to the psychologically engineered sales process. Keep you cool and stay with the process.

Closer: Have you ever noticed how boring and ugly a flat expanse of concrete driveway can be?

Instead of making a statement which will always sound like a sales pitch, you ask a question. When you ask questions you invite the other person to talk which forces you not to pitch like a telemarketer on meth after his tenth coffee.

Possible Referrer:Now that you mention it, driveways are boring. I have a friend with a very expensive house and it looks like it is drowning in a sea of concrete.

Closer: Check this out…. it a picture of a driveway I did before and after. Perhaps you know the school board chairman Ellie Jackson?

Why talk when you can show a photo? Do you have one in your wallet right now? Drop and give me 20….

Possible Referrer: Sure, I know Ellie…This is really nice…. I can think of a lot of people I know that would love this.

Closer: Could you pass out a few cards? I have been doing driveways, pools, retails stores and other jobs around for about a year. I am trying to build up my business and would really appreciate your help.

That’s it.

4 brief statements

The process can be modified for use in a cold-call approach as you introduce yourself around town. It covers all the factors for building trust mostly by your presence and photos. If you can drop some names along the way it will be even more effective. In any case, start with what you have and go forward. Everyday you will start with more than the day before.