Ask an MSP Expert

Q: Our current customers seem happy, but we only get a handful of referrals every now and then. We’re looking to grow our IT service business, so we’d like to generate some more referrals. How can we ask our current customers for referrals without seeming pushy?

Like many other MSP business owners, you’re probably hesitant to ask an SMB customer for a referral after you put out a fire for them. The truth is, though, your hesitation might be hurting your business more than you think. A recent study conducted by Heinz Marketing found that 84 percent of B2B decision makers start the buying process with a referral. While you don’t need to be pushy when you approach your customers, the worst thing you can do is not approach them at all.

To help you, we reached out to Stuart Crawford and Lindsay Faria for advice on how to approach customers without seeming overbearing. Stuart is the CEO and creative director for Ulistic, and he routinely works with managed service providers to help them achieve business success. Lindsay is the director of partner marketing at Barracuda MSP and consistently works on tools and programs to help their IT partners develop better business practices. Both shared a unique view on how to approach your current customer base about potential referrals.

How to ask for referrals

When is the right time to ask for referrals? While there isn’t a good or bad time to approach your current customers, a general rule of thumb is to approach your customers after you and your staff have met all their needs, explains Lindsay. Looking for referrals assumes you’re exceeding the expectations of all your current customers to the point that they’d be happy to refer you to another business. If that isn’t the case, ask for customer feedback to understand what areas you need to improve on. The first step in getting referrals is to make sure you’re consistently exceeding customers’ expectations. If you’re doing this, then you can bring on additional customers without reducing your level of customer satisfaction.

Don’t feel pressured to take an aggressive approach to asking for referrals. You can be more subtle about it. For example, Lindsay suggests making a note on your website, in your office, in your newsletter, or at the bottom of a survey to let customers know you’re appreciative of and open to any referrals they might have. You might be surprised by the response you get just by planting the idea in these ways. Some of your customers might honestly not have thought about referrals, so remind them.

The number one thing you need to do when it comes to referrals, though, is ask. Bake this into your routine, whether that means adding the question to your quarterly business reviews, online surveys, or even the signature files of your emails, Stuart explains. “What I recommend is making sure you have a plan for referral strategy as part of your quarterly business review,” he says. When you have that meeting, simply ask. Most people sit back and wait for referrals to happen, but they don’t have a strategy for when or how to ask. 

“This is why I built asking for referrals into my quarterly business review model,” Stuart says. “For example, if I was sitting down with a CFO at an oil company, I would ask if they knew anyone in their industry or someone they know who would be interested in the same level of service we are offering them. They network amongst their peers, so even if they didn’t have someone on their mind now, they can keep an ear out for them.” Don’t forget about the rank in file, Stuart adds. This means the receptionist, operations, executive administrator, etc., people who might not have the power to say yes but can introduce you to the people who can.

What to do once you get a referral

The most important step in the process is to treat referrals with care, Lindsay says.  When you receive a referral, take it seriously. Reach out promptly so you’re able to keep the referrer updated along the way. This lets the referrer know you value the referral, and it will make them feel more comfortable submitting more in the future.

“Before someone refers or introduces me, I create an introductory script or email for referrer to share,” Stuart says. “I call that first email the golden handshake. For example, it basically says: Joe meet Stuart, Stuart meet Joe, Stuart takes care of all the IT needs at our company and does a great job, and here are all the applications and services they take care of for us.” By focusing on the details and services you provide—and that you think the person being referred will need—you can paint a better picture of your MSP company and how you can help them.  

On the flip side, if you give a client a vague introduction or let them write their own email, they aren’t going to say too much, and they won’t hit all the points to effectively sell your service. Scripts give customers a guideline of what you want to convey, Stuart explains. “There are things I know that the other party may use, like a particular software in the industry that the referral giver may not be 100-percent aware of,” Stuart says. Instead, write a two-to-three-paragraph email that summarizes the points you want to hit. “Clients even thank me because usually when they give a referral they have to block off time to do this,” Stuart says. “If they can just copy and paste something that I’m sending to them, it takes seconds out of their day rather than 15 minutes to find the time to write an email. And if they think what I wrote is over the top, they can edit the email—but for the most part, people don’t.”

You may be thinking, what if you don’t hear back? Stuart explains that he has a follow-up script as well. “Usually what I see happen is that people are busy in their day-to-day life, and sometimes other things take priority,” he says. “But, unfortunately what happens is that the party who is waiting for the response automatically assumes the worst. They think they aren’t interested, but they may have other priorities ahead of the need to replace that one company.” Don’t have a knee-jerk reaction and assume someone is too busy to talk to you. Instead, recognize that they might be too busy, and switching their IT service might not be a priority for them at the moment. In your follow-up email, Stuart recommends offering to circle back with them in a month or so, if they’re interested.

Showing appreciation for referrals

Stuart shares that not showing appreciation was a costly lesson that he learned the hard way. “I had a referral partner who wasn’t motivated by a referral commission, and at the beginning he sent over a lot of leads. Soon, leads started drying up, and I wasn’t getting any new business opportunities from him. I asked him why, and he said, ‘You know what, Stuart, you forgot the two magic words: thank you.’ By not showing my gratitude towards him, it cost me more leads down the road. My advice is to say thank you to everyone even if you are rewarding them monetarily. Thank you is often the two magical words in the referral business that make a huge difference.”

There are many ways to ask clients for referrals, through social media, newsletters, or simply asking after your quarterly business review. Using Stuart’s and Lindsay’s advice can help you navigate the conversation smoothly and ultimately generate more referrals for your MSP business. The most important thing is to remember, though, is to follow up and show appreciation for every referral that you receive.

(Subscribe to SmarterMSP to read our follow-up post next week on how to use social media and advocacy programs to generate more referrals.)

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Photo:  pathdoc / Shutterstock.

Lauren Beliveau

Posted by Lauren Beliveau

Lauren is an Editorial Associate at Barracuda MSP. In this position, she creates and develops content that helps managed service providers grow their business. She also regularly writes The MSP’s Bookshelf and our Ask an MSP Expert column.

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