Judy Murdoch
Referral-based marketing is one of best ways for a small business to promote its products and to attract new customers. It's how I've grown my business and it's how I help my clients grow their businesses. too.
But there is a "dark-side" to referral marketing and if you're committed to growing your business based on customer referrals, you need to be aware of potential problems that can occur. And how to handle them.
True story: The (very) unhappy client.
Before founding Highly Contagious Marketing, I worked as a technical writer and trainer. Like many technology experts, I worked awhile for a consulting company that would hire me on a contract basis to work on projects requiring my skills. During this time I earned a reputation for doing quality work and doing it quickly.
One day, they offered me a project, that from their description, sounded fantastic: The client was in the Fortune 100, we would be developing a new training system that would be deployed in locations throughout the U.S., and I was the project leader with a staff of three.
The client was very excited about working with us too because they were told that I was one of their best project leads and had never missed a deadline.
Unfortunately, it was a complete mess from almost Day One.
I could spend quite a bit of time recounting what went wrong but when you really got down to it, the conditions that helped me succeed in previous projects weren't present in the current project. In the previous engagements, the client genuinely appreciated my presence, I worked directly with the project sponsor, and had free access to subject matter experts.
I discovered too late that the conditions that contributed to my previous successes were largely missing in my current situation. There was a power struggle between the project sponsor's department and the project manager's department, the subject matter experts resented our presence because they wanted to create the training system, and system desired by the client was far more extensive and complex than what could be completed in the allotted six months.
And that is a good example of a referral gone wrong.
The people who referred me were telling the truth: I had done a great job for them under a specific set of conditions. We assumed this project would the same and didn't do enough research to surface the issues that made the engagement such a struggle.
As a small business owner, have you ever gotten a referral who comes to you excited about working with you but once you begin working together, it feels like a constant struggle?
If you have, it's a very slippery slope indeed because:
And you SHOULD be worried because when it comes to word of mouth communications, people are ten-times more likely to share a negative experience than a positive experience.
But, good news, you can handle these situations gracefully to neutralize unhappy feelings and to perhaps even create a win-win for you, your new customer, and your referral source.
SIX STEPS TO HANDLING A REFERRAL GONE WRONG
1. Assess what caused the problem
You need to objectively assess what caused the problem. More often than not, these problems occur because you and your customer didn't fully discuss assumptions and expectations. What assumptions did you make that turned out to be incorrect? What expectations did your customer or client have that you didn't know about or disregarded?
2. Fully own your part.
However unpleasant your customer or client may be, business relationships don't exist in a vacuum. In some way, however small, you contributed to the current situation.
I've found the best way to handle these situations is rather than look for blame (a waste of time and energy in my opinion), own your assumptions, expectations, and behaviors that contributed to the problem.
3. Apologize.
If you fully own your part, apologizing is a lot easier because you're no longer on the defense. When you're off the defense, there's simply nothing for your customer to react to. They may still be angry and disappointed but they will no longer see you as the adversary this opens up the opportunity for accord.
4. Offer redress if appropriate.
If part of your agreement included a guarantee, ask your client if they want to take you up on the guarantee. If you don't offer a guarantee, you need to work out an agreement fair to you both.
5. Tell your referral source what happened (without putting down the other party).
If you initiate the contact to share the news, you will be viewed by your referral source as honest and forthcoming.
If they hear it from the person they referred, they will wonder why you didn't let them know and possibly assume it's even worse than it sounds. To get referrals, your referral sources must trust that you will do good work for the prospects they send you. They must feel confident that giving you referrals will make them look good. When they feel uncertain about your business, they will not risk their credibility by sending you referrals.
That's why, however, uncomfortable it may feel, it's important that you be the bearer of the news.
6. Use what you learned to refine your Ideal Referral Profile and share the profile with your referral sources.
I cannot place enough emphasis on how important this step is. Creating and sharing an ideal referral profile makes it infinitely easier for referral sources to spot opportunities on your behalf, increases the odds of converting the referral to a satisfied customer, and . . .
. . .by explaining to your referral what and ideal referral is for your business, you also explain why the one they sent you didn't work out and helps them better select who they send you the next time around.
About the Author:
Judy Murdoch helps small business owners create low-cost, effective marketing campaigns using word-of-mouth referrals, guerrilla marketing activities, and five-star strategic alliances. To download a free copy of the workbook, "Where Does it Hurt? Marketing Solutions to the problems that Drive Your Customers Crazy!" go to http://www.judymurdoch.com/workbook.htm
You can contact Judy at 303-475-2015 or judy@judymurdoch.com
