Small Business Referrals Gone Wrong And Done Right

| 3 min read

Small Business Referrals Gone Wrong And Done Right

Nothing is more gratifying than when a referral goes perfect, no matter which end of the referral you are on.  However, nothing is more frustrating to me than when a referral goes wrong, again, no matter which side of the referral I am on.  I recently referred the same client to two different companies.  While both did hit some road blocks along the way one succeeded and one failed in my eyes.  I can't blame everything on the service providers.  The client in question is maybe not the most business savvy group that you have ever met.  However, when I send you a referral I expect the world out of you.  I expect you to adjust or to refuse the business because it is not a good fit.  Here is my story of a business referral gone wrong and done right.

Bad Referral

Without disclosing too much information here is what I can tell you.  A client asks me if I know someone that does so and so? I say yes I do and they have always done good work would you like me to introduce you to them?  The client replies yes so I introduce them.  It seems like a great fit.  The client and service provider come to terms for the delivery of service.  The service provider informs us all of the expected delivery of service, everyone is happy.

Weeks go by and service is still not provided per terms discussed.  I have to step back into the situation and follow through with everyone.  The service provider is unresponsive and I have to create the communication between the client and service provider that I referred.  To this date neither the client nor I are fully happy that the service has been carried out per terms.

Why am I upset? It comes down to basically one thing; communication.  If the service was going to be delayed for some reason no big deal; just communicate with myself and the client.  Is anyone going to care if things are delayed as long as you have a valid reason? Absolutely not.  Additionally when I give a referral I expect things to be handled.  I do not expect to have to step in as a liaison between the service provider and the client.  Epic fail of a referral, I will not make the same mistake again.   

Good Referral

Now let me explain what I consider the good referral even though they experienced similar issues with the client. Same story: a client needs something and I know someone that is really good at that service.  I introduce them and they are off to the races.  A few months in the service provider contacts me letting me know that they are experiencing difficulties with the client.  It is determined that not everything is the fault of the service provider.  Additionally the service provider approached me and informed me that there was an issue.  The service provider then said something that stuck with me, "Matt we are currently losing money on this client but I'm sticking it out because it is a referral from you.  Eventually we will make money and I don't want to ruin our relationship."  That is a company and referral partner that I can stand by and will always stand by.  When there was an issue he opened up the conversation with me, he didn't hide it.  Additionally he let me know that he would fix the issue no matter what.

I don't need to tell you who will continue to get referrals from us and who will not.  Here is a summary of what you need to know about receiving referrals.

How To Properly Handle A Referral

Be Honest - If the referral made to you does not fit your product or service then admit that.  Let the potential client know that it doesn't fit your profile.  Additionally thank the referrer for thinking of you but that it didn't work out.  Let them know why so they won't make a bad referral to you again.

Communicate - You need to communicate.  This is important not only in referrals but in life and in your business in general.  Nothing is more frustrating than radio silence.  When I leave a voicemail or send an email and don't get a response within a reasonable time I get frustrated.  When I send a follow up to that silence and still don't get a response I get pissed.  If things are not going according to plan just communicate that to both the client and the person that made the referral.  Most people are very understanding as long as you communicate with them what is going on.

Make it right no matter what - If you do decide to do business with the client that was referred to you then you need to deliver to that client no matter what.  It has nothing to do with the money you are making or losing; it has everything to do with your relationship with the person that sent you the referral.  Who knows the next time they will send you a huge client.  Maybe they will send you a client that will allow you to retire.  No matter what the circumstances are you need to over deliver to clients that are referred to you in order to maintain the relationship with the referrer.

Referrals are important to all types of businesses.  It is important that you understand how to properly handle all referrals given to you.  If you don't handle referrals correctly eventually there won't be any for you to screw up.

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