How to lose a win-win situation. Read more...
Referrals are crucial to all of us
From what I've learned in the past year or so, referrals are the lifeblood of our industry. But for a small shop, they're more than lifeblood; referrals make the world go round. Traditional promotional strategies are becoming irrelevant, but the need to promote ourselves remains as strong as it ever has.
Advertising has become impotent for two reasons: the printing press is now free, and the markets have changed as described in the cluetrain manifesto. Tactless salesmen are exposed as smiling bastards, commercials are easily ignored, and ads seem to be status symbols at best. When was the last time you bought something from an infomercial? Would you ever start a direct mail campaign to sell your latest product?
Job recruiters (HR is another important goal of promotion) are frequently ridiculed and held with contempt for their impersonal pursuit of "human capital." And direct solicitation of new business reinforces our reckless delusion of speculative work and RFP's.
True power lies, as many people now know, in the opinions of your neighbours and in your trusted friends. The battle for hearts and minds is no longer a matter of achieving more and bigger, but rather in achieving better results with less. And a referral is simply the word-of-mouth equivalent of a viral marketing campaign.
Referrals and Collaboration
An active network of referrals is allowing a new decentralized network of small businesses to thrive, collaborate, and compete with companies that would otherwise stand unchallenged. And this network of referrals is allowing a new generation of leaders to emerge, because building relationships requires trust and affects reputation.
A referral can come in many forms; a letter of recommendation or testimonial, a link on a blog or a few kind words on the phone. This article talks about another type; a more active orchestrated connection of two parties who would mutually benefit from each other's proposition. These are the times when someone you respect calls you up asking if you can take on a job, or if you know someone who can. These are the best referrals if they go right, but they're the worst if they go wrong.
The Best Laid Plans
And sadly, a disaster like that can happen all too easily, and make you wish you never tried to help in the first place. Think of the time you thought your buddy Jimmy and your cousin Sally would really hit off. It's an uncomfortable place to be.
Then there's nepotism. Nobody's perfect - it's natural to vouch for your family members or close friends of family. But unfortunately that's where we encounter a lot of,"We can save a killing if we let Tommy's son take care of this website project thing." It's just a symptom of a more profound cause.
"Max - I have this awesome job that has to get done… by end of day tomorrow." If a deadline is dictating who you refer for a job - it's a tempting way to lower your standards for a referral. If you want to be the one to step in, pull out your black book and save the day, make sure the conditions for success are present. The desire to impress can make people act out of desperation, and not of sound guidance.
Another perilous possibility is you refer a great producer with a project that turns out to be terrible. If I start handing out lemons to my friends, eventually they'll start saying no.
What Makes a Good Referral
A good referral happens when the members of the agreement are united as trusted parties. Trusted parties are not the guys you met at barcamp last week. They are people you've worked with productively and who display a high level of professionalism in their work. Trusted parties can legitimately vouch for each other because they've connected with them on other projects.
So if I'm asked to provide a referral, and if I can think of the right person for the job, I can say, "Sure, this is John. I've worked with him before on a twelve week project. This is how good John is, this is what it was like to work with him, and these are the results he achieved.
When you can pull something like this off, you develop a reputation for helping people. When you refer someone and the project is successful, you trust the person you refer more, and your network of small technology companies start to work together. When one company is overwhelmed, they can turn to another trusted party to serve the needs of the customers that would otherwise go unanswered.
When large projects emerge, the small companies that trust each other can collaborate on projects that would usually be off limits. Good referrals are good for the community, when everybody holds up to their end of the bargain.
Good referrals take time and effort to facilitate. It's important to actually understand the nature of the project, and make sure the right people have the time to do the job right. It's not enough to refer someone you think you know, it's imperative to understand who you're referring to what.
The consequences of failure can be costly, embarrassing, and demanding. Success, on the other hand, enables entire communities to thrive. Referrals allow leaders to emerge, and those leaders can accomplish greater feats together than competing apart.
It's easy to make a bad referral, and we should all strive to devote awareness to managing the relationships we orchestrate. If we treat our referrals like we do our own jobs, we can do our part to enrich the communities we belong to.