Best Practices for Giving and Receiving Referrals

Referrals are one of the most effective ways to grow a business, but they require careful handling to be successful. Whether you are giving or receiving a referral, the key is to ensure that both parties benefit from the connection. A well-placed referral can lead to lasting business relationships, while a poorly thought-out one can damage trust and reputations – of all three parties. In this post we’ll explore best practices for both giving and receiving referrals.

Adapt a Referral Mindset

A referral mindset is an approach where you consistently think about how you can help others in your business or personal network. Remember a few simple principles. Seek opportunities to connect people with the services, products or professionals they need. Position yourself to be referred by others. Understand that referrals are about growing relationships, not just transactions. They are long-term building trust and providing value to your network.

Instead of viewing referrals as uncomfortable asks or obligations, see them as natural and mutually beneficial exchanges, and an essential part of your referral marketing strategy.

Understand the Needs and Capabilities

A referral is only valuable if it addresses specific issues or requirements. Knowing the referral’s needs ensures you can connect them with someone who can genuinely help solve their problem. Referring someone to the wrong partner wastes time, causes frustration and potentially harms your relationship with both parties. Equally important is to understand the capabilities—skills, experience and resources—of the person you’re referring. Making sure the match is appropriate on both sides leads to a successful referral for everyone involved.

What to Include in a Good Referral

A good referral makes the connection and follow through seamless and frictionless. Include key information, typically:

• Name and business of the person you are referring
• Their relationship to you
• Contact information: email, phone number or link to their website or professional profile
• Preferred method of communication
• Context on why you’re making the referral, with a brief explanation of the business, their needs, and how the person you’re recommending them to can meet those needs
• A clear call to action and a sense of urgency, as appropriate, of how to proceed with the contact

Quick Follow Up is Important

Prompt and professional follow up is crucial for a successful referral. As soon as you receive the referral, reach out to the person who was referred to you, ideally same day or next day at the latest. In your initial message, introduce yourself, mention the person who referred you, and briefly explain how you can help.

Following up quickly respects both the person who made the referral and the one referred. A delayed response lacks interest or professionalism that may harm your reputation and the referrer’s credibility.  A prompt response also keeps the momentum going and could help you land the business. There may be an immediate need, and you may not be the only resource the prospect is looking into.

If you have received a referral, update the referring partner. Let them know you’ve connected and thank them again for the referral. You may even want to send a handwritten note or other token of appreciation.

What is a Bad Referral?

A bad referral occurs when there are mistakes in communication, understanding or fit. Examples can include:

• Mismatch in skills or services.
• Faulty contact information (e.g., email, phone, website, LinkedIn profile)
• Referring a business that no longer offers a particular service.
• Referring someone with a bad reputation, or a history of underperforming or delivering poor-quality work.
• Not including context. A vague email with no explanation of why they are being connected can lead to confusion.
• Referring someone with unrealistic expectations of services or costs.
• Referring to someone who is already overloaded and cannot take on more work.
• Referring someone who isn’t interested and isn’t looking for external help at the moment.

Phrases that accompany a bad referral:

• “I don’t know much about them, but you may want to try this person.”
• “I’m not sure if they’re a good fit, but I’ll send you their info.”
• “I’ve heard mixed reviews about them.”
• “They do something related to what you need.”

Build a Reputation as a Great Referral Source

If you make great referrals, your value as a source of value increase and colleagues come to you for more referrals – and are more likely to provide you referrals as well. Mastering the art of giving and receiving referrals can significantly boost your business and strengthen your business relationships.