What is the Value of a Referral?

I don’t mean how many dollars is a referral worth or how much time does it save you. What is it that makes a referral valuable? How do you know it’s valuable? What does the referrer have to do in order to make it valuable?

Here’s what happened. On Wednesday, the 10th, I met Lori. On the 11th, Lori introduced us via email. Barry,
I’m connecting you to Rick, a very personable and helpful… Rick, Barry is a smart technologist… (There was more, but it would make Barry and me blush.)
So, Barry and I spoke on Monday and Lori was right. He does have some cool stuff, but I see two things. He could use some help bringing his idea to market. I know several people who’s client’s need his stuff. So, on Tuesday the 16th, I send three emails and introduce him to Fred, Mike and Tom.
Fred replied, “Barry, I am out of town this week – how is next week?”
Mike replied, “Absolutely Barry. I look forward to the conversation.”
Tom replied, “Hello Barry and thanks Rick.
Barry, I chat with vendors on the last day of every month. If you would like to get on my calendar you can do so here. I look forward to chatting with you!”
OOPS! So, I replied to both Tom and Barry, “Barry, don’t bother. Tom put you in the wrong box.”
So, back to the title. What is the value of a referral? Which reply do you want your referrals to give to the person that you’re referring? Fred’s? Mike’s? Tom’s?
Here it is. Fred and Mike respect my opinion and when I suggest that Barry is worth a conversation, they trust my judgment and he gets the benefit of the doubt. They are predisposed to trusting him and will treat him with the same respect that they would treat me. Somewhere along the line, Tom and I got out of sync and I no longer have that same level of trust. Tom is not a referral. So, I took it back. I don’t know if I did something to Tom or he has marital problems, business problems or none of my business problems, but we no longer have a relationship that referral worthy.
The value of a referral is your ability to give them a piece of your reputation to keep them from starting as a vendor.

12 thoughts on “What is the Value of a Referral?

  1. Rick – I wish everyone made referrals with the same care that you do. Too often, I get referrals from a trusted acquaintance, only to learn that the referred person is not a good match at all. We should all bear in mind that when we make a referral, we risk some of our own reputation with respect to both parties. This is a very important and valuable skill!

  2. I might be missing something,”I,m not that smart” but I don’t really see what
    Tom did wrong to offend you or your referral. Tom responded to your email, thanked you for the referral and agreed to meet with Barry when he his schedule permits. I know nothing about Tom or his business but I’m sure he doesn’t agree to meet with every vendor that requests an appointment but based on your introduction he agreed to meet.

    Educate me. What am I missing?


  3. Scott, your self deprecating BS and your anonymity is detracting from your comment. Nonetheless, your question is easy to answer. The bottom line is that Barry’s not a vendor. Period. Barry does something that will help Tom’s clients. If Tom had talked with Barry or looked at his website, he would have realized that. For whatever reason, Tom didn’t do what he has in the past. That’s it. I’ve referred good people to Tom in the past and they’ve never been treated like vendors. I don’t hang out with vendors. I don’t refer vendors. If someone asks me how to get on someone’s vendor list, I tell them that I don’t have a clue, but I wouldn’t waste my time. So, Tom will probably never see another referral from me.

    He didn’t offend me, but his treatment of my referral is unacceptable to me. So, I relieve any obligation from Barry.

    You may be interested in Barry’s reply, “NEVER has anyone gotten more credibility quicker. That is EXACTLY what I was thinking and hence why you did not see a response. Very interesting.”

    Get it?

  4. And that’s why I do it. I can’t be held responsible for other people, but I sure as hell am responsible for what happens when I put two people together.

    BTW, thanks for reading. It’s been a long time. I hope life is good. Call my cell if you’d like to catch up.

  5. Rick – by vendor I meant a person or company who supplies a product or service. So yes you do work and refer and “hang out” with vendors.

    Attacking my anonymity has what to do with my comment? I gave you my first name and email address. google it to find my identity if so important to you.

    As far as deprecating BS – I agree with you 100%!

  6. Perhaps the difference is caring vs. actively caring. What Rick did for his own reasons is actively care. He cared enough to take the action to refer me plus he took the action to save me from possibly wasting my time with someone who, for whatever reason, was not ready for this introduction. I wasn’t offended or mad at Tom. Rick just saved me from an awkward situation. I was have been stuck needing to follow up with Tom but knowing that we would be starting on the wrong foot. Rick’s action was bold. Maybe too bold for some. However it spoke volumes about what I can expect from my new relationship with him. Plus, I know that I better be nice to anyone he sends my way.

  7. Stop with the semantics. I did not know and probably Tom didn’t either that using the term vendor had such a negative connotation associated with it. In businesses that I have been in a vendor in the system is actually a customer.

    This happens too often when using email or text…etc to communicate where word and tone can be misinterpreted by the reader.

    Back to the subject and orginal post about referrals, I still believe, without knowing the complete back story
    of the relationship between Rick and Tom – that Tom did nothing wrong, besides maybe use the term vendor. Tom responded to Rick’s email, thanked Rick for the referral
    opened up his calendar to Barry on a day he sets aside to meet with people where they will probably get his full uninterupted attention and he said he was looking forward to the conversation.

    I don’t see anything that points to this being an akward situation or starting off on the wrong foot or being a waste of time to meet with Tom who is part of Ricks inner circle and has clients who need what you are selling. The worst outcome is you get practice talking to a potential customer and maybe get some more referrals from Tom.

    This referral was 100 times stronger than a referral you get from some BNI member that gives you a name and number and tells you to use their name.

  8. Scott, I’m really glad that you stopped by because you are helping everybody clarify the differences between vendors, consultative salespeople, partners and those that become trusted advisers. I should also state that vendors do receive referrals. Maybe not as many as other types of salespeople, but they do get referrals.

    I was talking with Don Battis earlier today and realized that the word vendor was only part of the reason that I took the referral back and as I think about it, it was not the biggest part of the reason. Barry’s offering is not a commodity. As a matter of fact, I’ve never seen anything like it before and I can think of dozens of professionals in my network that will (notice the “will”) want to have their clients be among the first to start using Barry’s offering because it will improve their competitive position. I’ve made many of these types of intros in the past and I’m used to an ‘as soon as we can make this happen’ attitude. Tom’s unavailability, lack of urgency, low priority placement was a bigger issue than his use of the term vendor. I assure you that Fred, Mike and the resource that I referred to replace Tom will all talk with Barry this week. One day a month? Sorry. Not available enough. If Barry were my brother, I’d want him seen today. If the timing’s off with Tom, it’s not a problem. We move on. Tom’s clients will eventually hear about it, they just won’t be first.

    One other thing and don’t get bent out of shape when you read it. You might notice that the professionals on this blog identify themselves. It helps readers understand where they’re coming from. If one of the readers were to Google “Scott”, (because that’s what they know about you) they wouldn’t learn who you were. For all we know, you could be a hot dog vendor and Don’s comment upset you, but I know Don and if he knew that you were a hot dog vendor, he probably would have used another example.

    In closing, if Tom had said, I’m booked solid and don’t have time to talk to anybody, this article never would have been written, but the I’m way busier than you are so fit in or go away to a referral was worth writing about.

  9. I thought this was a good article on referrals and a good one for me to read as I look to implement referrals into my business more. I agree with your sentiment Rick, Toms, reaction didn’t show that he was going to treat Barry as a he would treat a friend or friend of a friend and for that reason I can understand why you didn’t want to put Barry in a position where he HAD to follow up. In my opinion what you did was not remove the referral rather you removed the awkwardness for Barry and the potential for him to not look like a good business man.

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