What to do when you get a referral.-2

What to do AFTER you get a referral (to guarantee you’ll get more).

(And how most service businesses screw it up).

This week’s process is about referrals. They are the easiest ways to make sales and get paid.  We’ve all covered that.

The problem is, most service businesses screw up referrals pretty badly. There are a lot of great posts on  “how to get referrals.”  But, let’s say you’ve done that.  So what next?

We’re going to drill down on exactly what to do every time you get a referral and cover:

  • How To Think About Referrals (So You Can Get More)
  • What’s Really At Stake With Referrals (And What You Get Wrong)
  • The Steps to Take When You Get A Referral
  • What to do When you don’t make the sale.
  • What to do after the sale.
  • Your Steps (aka: The Business Recipe)

As we deliver this, we’re going to share how to do this.

How To Think About Referrals:

How Junior Saved Grandma!

When you get a referral, it’s not just a favor.

It’s a story.  And when you think about it that way, it creates more options for your business.

What’s really happening is that the referrer is looking to become the hero.  They are putting themselves at the center of a really fun business story.


Well, let’s say that Grandma’s plumbing broke. Water is leaking and she just can’t make it stop.  Her last plumber went out of business.

Luckily, grandma’s grandson Junior knows that you do plumbing. By calling you and making that connection, when it works out, Junior helps:

  • Your business.
  • Grandma’s pipes.
  • His relationship with you.
  • His relationship with Grandma

That’s pretty great!  Junior gets to be a hero in the “Story of Grandma’s Pipes.” He’s not a plumber, but he knew one. That plumber helped Grandma. Junior got to access your skills. Everyone owes Junior now!

That’s why Junior became part of this story. He wants to be a hero. The whole idea here is that you let Junior be the hero he wanted to be when he made the connection.

The easiest way to build a process around this is through Junior’s point of view. He’s the hero. Make him feel that way without having him ask.

What’s At Stake With A Referral

Relationships are the most important thing in business. Nothing in business really comes close to the importance of relationships. That trust that the marketplace has in your business is vested in each little relationship you have. Add those up, and that’s your brand.

When you get a referral, your business is put to the test: Does my business deserve the trust it has?

Never forget: when someone refers your business they are risking their reputation on your business. When you do a bad job, you hurt not just your own business but also your referral source.  

Getting back to Junior and Grandma, what would have happened if you hadn’t returned Grandma’s phone call?

Junior looks like a jerk in front of Grandma.

Of course, grandma will forgive him and love him, but she may not trust his next referral. It bums everyone out.

When you get a referral, you have the opportunity to:

  • Help your business grow.
  • Strengthen your relationship with the referrer.
  • Strengthen the referrer’s relationship with the client.

That’s a lot of opportunity for you.  To harvest this opportunity, you just need a little bit of a process behind it.

What To Do Every Time You Get an Inbound Referral

Tiny, Free Gestures Can Make a Huge Difference.

Whenever you get a referral, the first thing you do is thank and inform your referring partner that this person called.

They are often fellow business owners, or cheerleaders and a big part of the reward is to know that what they are doing is working out.

The next thing you should do is update your referring partner at the key milestones. Obviously, they will be different for each industry. But, when you give your partners an update, they are incentivized to continue to help you because they get to be part of the story.

The “final” thing you should do is thank your referring partner publicly. On social media, at their meetings, and anytime you see them, thank them for their referrals.

. The public thank you will incentivize other people to refer you business. Create social proof that it’s happening.

That channel will grow if you just water it.

What To Do When You Don’t Make Your Sale

This is going to seem a little bit contrarian, but even when you don’t make the referral sale, you should still follow the playbook and act as if the sale happened.

If someone refers a  client te to you, and it’s not a fit for some reason, that’s not necessarily their fault. It could be that you didn’t make the sale, or have the schedule.

But in either case, lead with massive, sincere gratitude is the way to go.

Now, there’s a special case: when the referring partner sends you someone that’s simply not a fit, you want to instruct them along with the gratitude that this isn’t a fit and exactly why.

This way, you’re rewarding the generosity. It’s still fun to be an attempted hero.

That script might go something like this:

“Hey, Junior, I noticed that you referred grandma to us. Thanks so much! I really appreciate you. Her irrigation system was out of whack, and I don’t handle those right now. Would it be alright if I referred her to Jane at Jane’s Irrigation Systems? She’s a better fit and I’ve referred to her before and gotten great results for my clients.”

This way, you’re not a “dead end.” It’s still rewarding to call you. Junior will call with any plumbing need in the future. He still gets to be the central hero in the Story of Grandma’s Pipes and will think of you.

What To Do After Your Referral Sale:

The next thing that you should do is to keep Junior’s story alive. People love to feel like heroes. So let’s figure out how to do that.

In your CRM, Junior should get a “Hero” designation. And every so often, you should follow up with him so that he knows he’s important to your business.

There’s no “ask” to people that are already heroes. A simple occasional call or text, saying something like:

“Hey, I just remembered the time I got to help with grandma’s pipes. Thanks for the opportunity, it meant a lot. How are you? What can I do for you?”

…will go a long way towards your relationship. You’re not selling.

You are simply following up to thank them for what they’ve already done.

A big win would be an annual gift-or fancy dinner- to your referral heroes. This way you can celebrate and share in the success of your business together, and keep your story going.

The Process Of…Receiving a Referral

So now let’s look at the process.

So here’s the process to add to your workflow for getting a referral.

  1. The first thing you do is thank your referral partner for every single referral.
  2. Remember: you are telling a story where the referral partner is the hero. So: follow up with the referral source without having them ask.   
  3. Mark the job in your CRM as a referred job. This should create a few extra tasks that you can do that can loop the referral partner in. At every major milestone, please send this “up the chain.”  You are talking about the “beginning, middle and end” of the story.
  4. Thank your referring partner publicly. Make sure everyone knows they are an important source of business to you.
  5. Give them a gift worth 5-10% of the profit realized from your referral.
  6. Mark them in a category in your CRM with a follow-up sequence. Execute your follow-up sequence whenever you do your work. Contact referral partners at least twice a year just to thank them.
  7. Thank all of this year’s referral partners annually with an unexpected gift or an invite to a VIP dinner or something equally great.
  8. Commit. Make this part of your business.

Some other things to do.

  • Create a referral page on your site for people to refer to you via webform. This is easy with most major CRMS.
  • Create a more formal program to track and tank referring partners.

Referrals are the lifeblood of service businesses. So many businesses get this low hanging fruit wrong and make it so that they don’t incentivize their customers to refer them.

But not you. You’re going to make a process to do this and you’ll execute it every day. Of course, we can help with this program, if you want to contact us.


  • Think of referrals as stories. Where your referring partner is the hero. The person who refers is doing it to be the hero of a story. Let them.
  • Always thank publicly – even if the gig doesn’t work out. They have supported your business, and any good attempt makes this possible.  If you can, invite them to your VIP event/dinner.
  • If you want, create a page on your site like VIP
  • Compliance laws permitting, spend 5-15% of the profit you earn on surprise gifts for your referral partners.
  • Always include referring partners in a VIP process.

For further reference:

A few books on this.

  • Giftology: John Ruhlin: This book is the primer on how to give the gifts that are going to drive this program.
  • The Referral Engine: John Jantsch- This is more about “getting” referrals than creating an overall “what to do when you get a referral” kind of vibe.
  • Talk Triggers: Jay Baer and Daniel Lemin.  This isn’t a book specifically about helping your referrals, but you can grab some of the ideas here.

Need some help with this? It’s part of what we do when we help our clients put a full-scope sales process into their business. We make a custom referral program so that you can do the right thing, every time. To get started Contact Us.

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Phil Gerbyshak

Phil Gerbyshak knows sales. He’s a sales speaker, a sales executive, a sales expert, a sales leader mentor, a sales podcaster and a sales coach. Phil has written 5 books, more than 3000 articles, and has been quoted in the Wall Street Journal, Daily Globe and Mail, Financial Times, Investor's Business Daily, Inc. and many other publications, including earning 3 covers: Speaker Magazine, Marketing Media and Money, and Social Selling Made Easy. Recently he was recognized as one of 25 Sales Leaders to follow by Crunchbase. Phil is currently the chief revenue officer and partner at Process and Results, LLC where he and his team help tech agencies and SaaS businesses sell more. They specialize in sales and SalesOps so that teams can stay focused on what they do best.