Business Referrals: How to Get More for Your Business

by Apr 27, 2021Business, Growth, Marketing

If you want more clients and peers to recommend your company to others, follow this simple

Likely, you know someone that you’re more than happy to refer to other people. In fact, we might even feel some sense of an obligation to help them out with a referral. You might wonder where that feeling of obligation comes from, and just as importantly, how you can use that same technique for yourself and your business.

As it turns out, the answer is painfully simple. You must give something first with no expectation of a return. Or, as a friend of mine once put it, a giver gives first.

Let me explain why this works.

Counting Social Exchanges

The theory behind this technique dates back to 1958 when it was posited by an American sociologist named George Homans. He proposed that all human beings perform a kind of calculus in our relationships where we determine if we are giving more or getting more from our relationships. He called this the social exchange theory.

When we define it this way, it can sound like we’re all kind of like accountants constantly calculating our credits and debits in our relationships. We’re always determining who we owe more to–and who we might have a surplus with. I know it sounds like there is a general ledge in our heads and some people don’t seem to do this, but Homans claimed it is a fundamental human trait.
The key is that to maintain any healthy relationship, there is an irresistible urge to try and even that ledger. And that’s where referrals come into play. They help even the relationship balance sheet. When someone feels like they owe you something more in your relationship with them, they’re much more likely to give you a positive referral whether you sell insurance, manage wealth, or even manufacture products.

So, when it comes to building up more referrals in your business, you need to start by looking for ways to create that sense of obligation among others by embracing generosity and giving.

An Imperfect Science

But before you start giving away the farm, recognize that this is all an imperfect science. Just because you make the effort to be generous with someone doesn’t mean that you can expect to see an immediate payoff. You need to think about the long game here. You can’t expect to accrue benefits all at once. Rather, it’s more like karma where you can reap the rewards over time.

The other factor is to genuinely not expect anything in return. We have all dealt with that person that does one good deed and is immediately looking for us to balance the ledger with something in return.  That type of insincere giving will be sensed and build resentment rather than an obligation in the receiver.

Competency Rules

Another wrinkle to consider is that if you want people to send referrals your way, you need to actually be competent at what you do. I might have several people I know who have been very generous with me and they’ve created a sense of obligation on my part to help them, but I won’t give them a referral because they’re just not good at what they do. So just keep that element in mind as this is a super important aspect of whether you effectively generate referrals–or not.

If you want to build more referrals in your business, start by thinking generously and for ways you can help other people out. Think of it as a contribution to the positive karma in the universe. If you practice that diligently and with no expectation for an award, you will actually find that those efforts will pay off big in ways you might not have anticipated.