How to Ask for a Referral and Build Your Business

Welcome to what we call recommendation nation. A few years ago, a man named Fred Reichhold, who works at Bain and Company, wrote a book called the Ultimate Question. I personally believe that this book and this question is one of the most important discoveries in all the history of management. What Reichold found with his counterparts and over the years is that the most important single question in all of business is, would you recommend us to others? It is the key to your success as a person. It's the key to the growth of a business. It's the key to everything, because a Referral is worth 10 to 15 times a cold call. And the only way that a business can grow today is if other people say the business is good. Theodore Levitt of the Harvard Business School said that the most valuable asset that a company has is its reputation. And its reputation is defined as how it is known to its customers. How do its customers think about it? How do customers think about your business, your product and your service? And how do they talk to you amongst themselves when you're not there? Because this determines your entire business future. So what Reichld found was the great question, the ultimate question. The question that determines your success and future is based on your experience with us. Would you recommend us to others? And his methodology was simple. After the customer had been served, they would ask outright, how was everything? People would say, fine. They always say, fine. They say, on a scale of 1 to 10, how would you rate your experience with us? If they got a grade of 9 or 10, what they found is that those people would come back and would tell their friends and even bring their friends. If they got a grade of 7 or 8 on a 1 to 10 scale, that means that they were satisfied, but they may or may not come back. And they wouldn't tell anybody. If they got a grade of one through six, they became what they called net detractors. Not only were they unhappy, but they would tell other people not to go and see it. Have you ever had an experience where someone says, did you see that movie? And you say, yes. What kind of a grade would you give it? Five or six. What does that mean? Don't go. If you say that about a restaurant, what kind of a grade would you give that restaurant? Five or six. That means don't go. So let's say somebody gives you a grade. It could be 6 or 7 or 8, and it's not a 9 or 10. What do you do? Obviously you ask, what could we do next time to earn a higher grade from you? What could we do next time to Earn a higher grade. And you know what customers will tell you? Do this and do that. If you do more of this and less of that, if you start doing this, stop doing that, then I'd give you a higher grade. And then what do you do? This is the discovery. You go and do it, and then you go back to the customer and say, thank you so much for your input. We did what you said and we're going to make it a part of our policy. And from now on, of course, whenever possible. Now, the most interesting thing is that customers will make you rich. If you ask your customers, what can we do to make you happy, they'll tell you. And if you do what makes them happy, they will buy from you again and tell their friends. So the great question is, would you recommend us to others? So after you've served a customer, ask them, how was everything? On a scale of 1 to 10, if they give you a grade of 9 or 10, you say, could you give us the names? Or would you recommend us to one or two other people who may be interested in our services as well? So always ask, were you happy? Scale of 1 to 10, if it's a 9 or a 10, could you give me the names of one or two other people who may be interested in our services as well? Very important thing. Never say, can you give me some names or some recommendations? Because nobody will do that. But if you ask for one or two referrals, very often they'll say, yes, I'll give you the name of this person and that person. But remember, when a person gives you the name of someone else, they are risking their own personal reputation by giving you the name. They are turning their friend over to you. If you don't take really good care of their friend, it's going to hurt them. Their friend will be mad or disappointed at them. I have had situations where somebody referred someone to me casually and the person they referred cheated me. And I never trusted that other person who sent me the referral again. I never wanted anything more to do with them, no matter how much he apologized. Well, I'm really sorry. I didn't realize that person was a crook. And he asked me for a name, so I gave him your name. Sorry, baby, I just really not interested in talking to you anymore. So the key is give really, really good service to your customers. Make the service quick and timely, and then ask, on a scale of 1 to 10, how did you like our service? If it's less than a nine, say, what could we do next time to get a higher grade and then do it. And once you get a higher grade, nine or 10, say, could you give me the names of one or two other people who may be interested as well? And if you ask this question, you'll start to get what we call a golden chain of referrals. Referral after referral after referral. But the most important thing is to take really, really good care of your customers in the first place.