The Growth Workshop Podcast
Episode 5 - How To Ask For Referrals with Thomas Coles: Your Network Is Your Net Worth
Fri, 31 May 2024
We’re joined by successful entrepreneur, Thomas Coles, discussing how, and when to ask for referrals for developing your business. 82% of potential clients prefer seeking recommendations from their network over online searches. We talk psychological barriers, building trusted relationship with your network, and the impact this can have in creating opportunities. Who knows what opportunities currently lie in your network.
Hello and welcome to the Growth Workshop Podcast with your hosts, me, Matt Best and Jonny Adams. In this podcast, we'll be sharing insights from our combined 30 plus years experience and hearing from other industry leaders to get their thoughts and perspectives on what growth looks like in modern business.
We'll cover all aspects of leadership, sales, account development and customer success, alongside other critical elements required to build an effective growth engine for your business. This podcast is aimed at leaders from exec all the way down to line managers. Hello and welcome to the Growth Workshop podcast with your hosts today, Matt Best and Jonny Adams.
We're joined today by the fantastic Thomas Coles and we're really, really looking forward to exploring how Thomas has been a successful entrepreneur, developing and growing businesses over his illustrious career. But as is customary on the Growth Workshop podcast, Thomas, I'd like just to welcome you with our first question, which is, tell us what's been interesting in your week this week?
What's gone on that you can share with our listeners to get everyone excited at the start of today's podcast?
Hello, both of you. Hello, everybody. And thank you for the introduction. The best thing that's happened in my week has probably been how busy it's been, starting from before eight o'clock Monday morning, getting an order from a new customer right the way through the week. It's just been fantastic.
Brilliant. That sounds incredibly productive, which is fantastic. Thank you. And Johnny, what about you? You always have normally an interesting story to share with us at the start of these podcasts.
Oh, Matt, you've set the standards high there. So a personal sort of achievement, I achieved the management consultancy chartered status, which puts me in the top 1,000.
management consultants in the uk it effectively means that as a business and as an individual running programs with our clients i uphold certain standards and ethics when delivering transformation projects so that was a really sort of personal achievement over to you matt what's going on your world brilliant i think in my week this week has been a chance i came off the back of a really um
really busy week last week, actually. And Thomas, much like yourself, lots and lots of meetings, really effective, great conversations. And we all know that in business development and sales, the week that follows that is a week of follow-ups. And that's really what this week has been about. But it's really great being able to reflect on those fantastic conversations with clients and prospects.
And if we think about our listeners to this podcast and their own sort of focus on growth, just a little reminder of all of that hard work that you've put in, what comes out, and maybe some of our listeners will have shared your pre-8am contract signatures, Thomas, which is always a nice way to start the week. Let's hope so. Wonderful. Well, look, Thomas, you're a serial entrepreneur, right?
You've got vast experience in developing and growing businesses. So tell us, what's your biggest success?
So there's been all sorts of amazing teams I've worked with over the years, but probably if I had to choose one thing, I would say selling one business as an 82 times return has to stand out as a highlight. Wow. Yes. Why are you still working? People do ask that question. I would say divorce is expensive and my daughter wants to be a doctor. So I've got at least another nine years in me.
Fantastic. Just being married for one year, Thomas, I'm taking notes. So thank you very much for that.
So 82 times return flipping businesses clearly sets you out as someone who knows very well what they're doing. We'd love to know, what are the three things that have helped you in being so successful with that business, but also with the other businesses that you've worked with and achieved growth for?
There are three really clear, easy answers to that question. Firstly, the most successful way of generating new revenue and therefore growing businesses has always been using referrals. The second thing that I have to highlight in terms of total revenue coming from growth has to be around account management. looking after customers, growing the relationships with customers and retaining them.
One of my businesses, the biggest one, had an average customer life cycle of over 10 years. And that's quite special. And then I think you probably won't be surprised here, the third way of generating new business and therefore being successful is through what we call co-sailing. That is following customers as they change jobs. If they've been happy, they can be a happy customer again.
Thomas, it's great to have those sort of three key areas, and we love to dig into each of those and paying particular attention to number one and referrals. But just before we do that, account management is something very close to my heart and my experience in customer success and running account management teams. And I think it can sometimes be such an understatement.
appreciated side of the business so I was having a conversation with that CS leader just the other day and we were talking about the volume of business and the cost of losing business is so seldom seen as a sort of risk and all that focus gets put on to sales and acquiring new logos and then you turn around and if half your customer base is gone, you've undone all of that good work.
So it's such a, I think, just wanted to share my view, my perspective there as someone, you know, I think account management is so, so key, especially in services businesses where you've got ongoing commitments and, you know, in modern SaaS, of course, and 10 years is quite something. I mean, you must go through a number of key stakeholders in that time.
So it just demonstrates that good account managers really are really impactful and effective in one's business.
People talk about teams winning deals. Teams also keep customers happy. It's not down to one account manager. It's down to a whole multitude of different roles, both on the client side and the supplier side. Therefore, having the opportunity to make sure there is continuity when one stakeholder leaves.
I always thought that the best thing that can happen is that a happy customer leaves because you keep the happy customer organization and they become a prospect in their new job.
Leading nicely into your third point of co-tailing, right? And the importance of maintaining those strong relationships and then following them around the industry.
I tell a story about one insurance client I won back in the year 2000. And by the time we'd finished that relationship with that one organization 16 years later, and that was due to an acquisition of them, we had generated, I think, 25 million of revenue from referrals, coattailing, and that customer relationship.
I mean, that's incredible, right? I mean, if you set that goal for many sales professionals just on their own, that's...
£880.
That's some ROI. That's awesome. Yeah, that's very cool. And I think thinking about that, Thomas, and you mentioned there that essentially that person becoming an extension of your sales team, right? And I guess as referrals as a tool or a thing that helps achieve this growth, it's exactly that. It's extending your sales organization out through your...
trusted relationships and the partnerships that you have with clients who really advocate for you in the market and advocate for the product. So, I mean, tell us a little bit more. Maybe I'll start with a sort of fairly simple question. There might be some people on there listening to the podcast today thinking, what does referrals really mean? What is referrals? So how would you define referrals?
What does it mean?
Let me illustrate it with the point that there's some research from Texas Tech Uni, which I think will really illustrate the point. 83% of most companies' satisfied customers are willing to recommend them, but only 29% of those people do without being asked. In other words, asking for a referral is exploiting the 54%.
Yeah, no, I just think it's fascinating hearing those statistics. And how did you stumble across that statistic, Thomas? Was there some sort of a trigger that made you look for that piece of information to sort of maybe prove a business case or a proof point?
Great question. There is lots and lots of passion in lots of people for lots of different topics. I really dislike the word passion because too many people overuse it these days. If you were to push me, I would say my passion in business is asking for referrals. Therefore, I'm constantly looking...
for new techniques new tweaks new ways that they can be used for example you don't just have to use them to generate new business you can use them to generate new relationships inside an existing customer you can use them for hiring you know looking for new candidates
And when you said passion to me, I was listening intently thinking, how does passion fit within that? And I understood sometimes we hear the word curiosity as well. You're curious about this topic. It creates interest for you as an individual. And you've probably seen some benefit as well.
If I'm going to be seen as an expert on this topic and certainly people who I've worked with get huge, you know, significant upside in terms of lead gen as a result. then I do need to understand the nuances, what can work and how relationships change, how culture changes across the world. There's all sorts of nuances we need to be aware of.
Yeah, that's a really interesting last point that you mentioned about culture. I wonder if by the end of the conversation we could probably dig a little bit deeper on that. I was with a client on Tuesday this week and we had a very eclectic mix of individuals across geography and we debated a lot about cultural alignment whether it works in different cultures and how that works.
And we had behavioral scientists in the room that were helping shape the thought process, how humans work. So interesting how that cultural piece can affect referrals as well. Sorry, back to you, Matt.
Johnny, addressing your point around the international challenge that referrals could present, I simply have one piece of advice, which is very straightforward, and actually it can apply to almost any situation. Some people talk to me and they say they're a bit worried about asking for referrals. It could come across as being needy or desperate, some negative sentiment like that.
I always tell them the best thing you can do, and this works internationally too to overcome the cultural challenge, is to tell anybody you talk to that you run your business using referrals. As soon as they understand that, it doesn't matter how often you ask them, it doesn't matter how you go about asking them, They'll be more surprised if you don't ask than if you do.
And that works so far that it worked in any culture from the United States to Japan and everywhere in between.
It is interesting you referenced that point and just on the reference of culture. I think the important part that you referenced there is that you're signaling your intent and you're signaling your direction and therefore that is globally known.
The other thing that is interesting and we learned this week from the behavioral scientists was around if you split the world into sort of three core areas, you know, you can look at it as sort of an Asia area, a North America area and a European area. There is a distinct difference around how people work together in business across Asia and America.
The fact that friendships, liking of your friends is seen as a much stronger driver towards business in Asia versus actually America. You first of all see people as professionals and then friends. So I wonder how...
referrals play into that whether people are sharing referrals amongst the friendship group first and foremost in asia and then probably in the professional group in north america i just think it's an interesting approach well i'll respond to that by saying firstly that i don't actually see any difference in the results you get across cultures and therefore i guess i'm saying don't worry about it
I'd probably add that what we are doing by asking for referrals is effectively extending our network. If you're only asking for referrals from friends, you're therefore rather limiting your ability to extend your network.
It's such an interesting point, and I think this... Thomas, I love your recommendation to the listeners around it almost doesn't matter, but if you signpost that point, it's part of how you win business. I can think just now off the top of my head, I've got three or four clients who I know have told me that probably not in such a direct way.
And I wonder if that's just an extension of that bit of advice that says being really, really clear about what that means for you. Rather than saying something, oh, yeah, well, I get quite a lot of my business from past customers. But being really, really explicit about that is the primary source of business for my business or my business growth is through referrals.
Just really putting that statement out there sets out that scene. And as I said, I mean, there's easily half a dozen businesses that I've been working with who I would say could say that and it would be the reality for them.
I think, given why do I have to say it, but everybody should be not only saying it, but truly believing it. Why would you not be using this rich source of the relationships you've already got in order to find new ones?
And that's exactly what we should be tackling today, is that question that you ask, which is the why. And there's so many obstacles that people face, which I know we're going to have to tackle today in this conversation to get your advice and expertise, Thomas. I think it's important that we... talk a little bit more about going into a little bit more about these referrals and some examples.
And then let's tackle that topic of, I think we're all building a business case here, which is great that they work. And I'm sure we could pull in loads of examples. It's just why do people not do it, which I'm really interested, intrigued about tackling throughout today's conversation.
We need to address the fact that 82% of people who are looking to procure something new, looking for a new vendor, who never get as far as doing a Google search when they're looking for a new vendor because they ask their network and never get any further. So if you don't use referrals, you're only targeting 18% of the available budget.
There is a prime example of success that we've found and where through driving, using intimacy with another organization that we've worked with for seven years, the story behind it, to your point there, Thomas, is this individual that we'd built a strong relationship with. He actually never procured from SBR, so never actually bought our services, but we built and formed a strong relationship.
So they saw us as a trusted advisor. Another client that we've recently won, a net new logo, a large global program that's going to go across three core regions, 150 sales professionals to revolutionize the way that they deliver consultative selling. And that came from an individual messaging out to her peers saying, do you know any business that's interested in sales transformation?
Interestingly, nine months before, I'd asked that individual that shared to her SBR, Have you got anyone in your network that might be valuable for us to talk to asking specifically for referrals? So to your point, that individual never went on the internet to look. They actually had asked their network, who would you recommend?
So that element of asking for referrals and then being that business at the front of the queue, I'm sure, was something that you're alluding to there.
And maybe, Johnny, I'll just add another light bulb that's just gone on for me here, Thomas and Johnny, just around when I think about this is, this is almost an opportunity as well to get things earlier in the buying cycle, because a big part of those preliminary conversations are had in a sort of safer space.
Those who are going to kind of internet search, maybe you've done a little bit more thinking, whereas someone who sat there thinking, well, maybe I need this. Hey, I'll just ask a couple of my mates in the market. Or I'll just ask a couple of my mates down the pub who I know work in a similar industry. What have you done to fix this? Do you have this problem? Oh, yeah, I do.
You should go and speak to X, Y, and Z. And I guess that's a big part of it as well, Thomas, right? In terms of getting in or opening doors earlier in the conversation as a result of being somebody who then becomes, who's given that opportunity to
take that real consultative approach towards helping a customer see where procuring a service whatever that might be is going to help them in driving their business forward yeah you're absolutely right matt i would characterize it as being there at the right time to help to shape their thinking so if you think about the way you might personally consider buying a car
You probably use the internet to research what model you want, to research colors, that sort of stuff. But then when it gets to the point that you're actively going to go and find a dealer who would suit you, you probably ask friends what good experiences have you had, what dealers would they recommend, rather than asking for reviews on the internet.
I often ask delegates who I'm working with in order to help them develop their referrals technique, when was the last time they asked for a referral? When was the last time they gave a referral? Because these things should definitely be reciprocal. SBR talking about giving to get.
And the vast majority of people talk about the fact that they routinely have asked for referrals and given referrals in their personal lives, but they often have not been using it systematically in their professional lives.
Thomas, what's your perspective on why that is?
It's a difficult question to answer. My experience is that far too many businesses are, and far too many individuals in businesses, are embarrassed of asking for referrals, which is why I talk about that mindset shift needing to say, look, I run my business on referrals, therefore it stops being embarrassing and starts becoming just an absolutely routine thing. It needs to become a habit.
People have to get into the Whereas quite often you hear of people who think they do need to be asking for referrals realising too late. Five minutes after they left the meeting rather than during the meeting.
Why do you think that might be the case? Because, I mean, again, going back to that sort of personal versus business, is the difference here that we're asking for a referral to procure services more often in our personal life than perhaps to sell services? I wouldn't necessarily see a friend in the pub and say, you should buy these trainers.
In fact, anyone who knows me will attest to the fact that I do actually do that, which is probably a bad example. Matt, I'd never buy your trainers, by the way. So, yeah. LAUGHTER Yeah, what's your take on that? And this gets us, Thomas, I think, into some more of the sort of practicalities of how to start to generate these sort of referrals and to develop those critical habits.
I think your point around the difference between personal life and professional life is largely that you would only ever ask a friend when you're looking for a new supplier of something, and therefore you've got a trusted relationship with them, trusting relationship with them.
Whereas in professional life, not every individual working in an organization is going to say that they trust the people in their client or vice versa. That's the bit that you need to overcome, the mindset that you need to overcome.
As long as you have a professional and some level of trust and relationship, then you can be asking many people that you come across and should be asking many people that you come across whether they can make, in effect, recommendations for you, but therefore give you a referral.
You know, one of the things is the trust equation and you talk about trust there. And when we think about the trust equation, we've got trustworthiness equals credibility plus reliability plus intimacy divided by self-orientation. And I wonder when we're thinking about trust there, which will drive referrals. So I agree with you.
You need to have a trusted relationship for someone to feel like one, they can refer you to others and two, you're comfortable to refer them. What area of that trust equation do you two think is important to really index on when using referrals? Because we're talking about trust.
I characterize it slightly differently than that, Jonny, and I completely appreciate the point you're making about the equation. When I use the word trust, I mean perhaps respect. Is there sufficient respect in the relationship, in a professional relationship between two people who don't work for the same company, that they are therefore willing to help each other out?
So maybe that's a better way of putting it than trust.
That's important to reference. If we're looking at trust, the reason why I anchor back towards the trust equation, just to talk about that, is that I had a really good conversation with a founder this week, and we're a partner of theirs, they're a partner of ours, and we're looking to win a collective trust. deal together.
There needs to be trust there, but there needs to be trust to refer one another to each business. And I wonder if we look at the top three areas, credibility, reliability, and intimacy, I think everyone that's being referred or you're willing to refer someone else, there must be some element of credibility in that relationship.
You must have some type of possible brand equity, or there must be some type of
proven experience in the past that you could demonstrate possible outcome or at the simplest form if you meet them at a networking event as long as you're showing credibility around what you deliver i think the other thing is reliability having that consistency to always be on time be punctual and be consistent in the relationship you've got with that person And the final one is intimacy.
I don't know about you guys, but building and forming that relationship that goes a little bit deeper than just surface level questions and thinking about those questions. So I think to answer one of the questions that we've sort of alluded to, which is why do people not do referrals, which is what we're getting to.
I wonder if the trust equation is something that we could as professionals anchor against in those three areas that might be valuable.
Good point. So I was thinking as you were talking through that, Jolly, that maybe I was using respect as a synonym for credibility. In order to have credibility, there must be respect, and you can't get respect without seeing some credibility demonstrated.
Perfect, yeah. And I think... Maybe we gravitate more towards those trusted relationships. I guess that's that point that you're making there, Johnny, is that where you do have a trusted relationship, it gets easier and easier to ask for referrals.
And maybe, Thomas, there's that sort of the next layer out from that is and you're talking about the minimum requirement in order to ask for a referral and having that credibility there. Clearly, we'd love to... Those trusted relationships are ones that are more comfortable and where it's easier to ask for a referral.
But if we step outside of that comfort zone, then looking at how we're demonstrating the credibility that we've got. And I know, Thomas, from conversations that we've had before, you... you share an example of how you would teach this to clients and using the conference speech analogy.
I wonder if it might be useful to share that with our listeners today, just to show, I guess, the other end of that extreme.
Yeah, a conference is probably a situation, if you're a speaker on stage at a conference, probably a situation where many people listening would feel deeply uncomfortable anyway. I push them even further. I would say that the best thing you can do when you are given the opportunity of speaking to an audience on stage is to ask for a referral whilst you're up there.
You probably have to gamify it in order to get several referrals. There's probably got to be some sort of reward for one or more of the people who come back to you. But where I've persuaded clients to do it, they've had amazing success. It requires real guts. So Thomas, how does that work in practice?
I would say if you're on stage, people are probably listening to you unless you've been really tedious up to that point in the speech. Therefore, you probably need to use humour in order to just use humour to sort of defend yourself.
Rather than saying, I run my business on referrals when you're on stage, more likely make a joke of the fact, I thought I'd take the opportunity whilst you're all listening to me. Do it as simple as that. Tone of voice, bit of humour, then go in with a question. I would like to be introduced to anyone you know who does this.
Thomas, clearly, there's probably a lot of people listening to this thinking, oh, my gosh, well, not only do I maybe not get that many opportunities to stand up on the stage, but also I feel like I have to take some smaller steps first. And clearly, that's what you're trying to encourage them, how you're trying to encourage them to think by demonstrating that.
quite how any situation it's possible to ask for a referral. But what are you trying to steer them towards? Is there a particular point that sits between standing on stage in front of 500 people and asking your friend for a referral? What would you say is that sweet spot?
I'm going to be slightly facetious, I suspect, in replying to that question, Matt. Every conversation you have is a potential opportunity to ask for a referral.
let me give you another example where people might feel uncomfortable when you're at a conference or event there are loads of people at that event who you've never met before therefore by definition you do not have that trusting respectful relationship with you don't have any credibility but even in those circumstances you can ask strangers for a referral and you will get a remarkably high hit rate just in the sense of receiving the right names the right sorts of names from those strangers
Because, in many cases, those people who you've never met before are just grateful for having a conversation with you. They're in a room full of strangers too, and therefore human nature is that they will be grateful to you for initiating a conversation, and therefore they'll try to help you.
I'm in that networking event now. You've just put, you've teleported me in there and I can feel myself in there. What I hear is ask for referral. I don't feel comfortable when saying, you know, I'm talking about other people here. I still don't feel comfortable in going. So, Can I have a referral? Is there a technique that you recommend that you could use to soften that? Can I have a referral?
Is there any sort of advice, Thomas, you've got in that environment of a networking event? Because I think most people would go to a networking event rather than possibly being on stage. So maybe that's the environment that we could tackle.
I would say you have to go to those sorts of networking events and seek out the people who are feeling nervous and maybe not manage to enter into conversations. Then actively approach them. The technique that you need is to find out about them first. We in SBR talk about being interested as opposed to interesting. So find out what they are there for first.
Find out about their business, their background first. which gives you the opportunity to show interest in them, which is a good thing anyway, before you ask for a referral. But it also gives you the opportunity to customise the question you ask when you seek a referral to the sort of network that they're going to have, having listened to who they are.
And just to continue, we have worked with a number of behavioral scientists. And I'm a firm believer that to manage my own mindset, I use science, you know, material information that's proven by research to put myself in the right mindset. And one thing I do know is that when we ask for advice, not help, of human beings, people are more willing to provide advice than not.
We are inherently there to help as human beings, which I found really interesting. And equally, when we ask for advice, the person who is asking for the advice to the individual feels like we're actually taking something away from them. So that's why we don't ask for referrals a lot of time, because we think that there's an economic disadvantage.
reduction in that other individual but actually in fact the person who's receiving the request for advice or a referral actually sees that there is a social obligation to respond which is again really interesting so what's some of those other tips that you could share with the listeners that would sort of make people sort of stand up and go right i'm gonna ask for some advice or some referrals
So I actually don't use the word advice just because in English grammar it's slightly awkward. I talk about guidance. But you can absolutely tackle the same point you're making, Johnny. It's simply about the semantics. So I would go through giving the person who I'm talking to, whether I know them or not, a bit of a pat on the back.
There are some organizations talking about giving them a stroke, an ego boost. In other words, I'd really appreciate your guidance on who you think I should be working with next. And then you can go into asking for the referral. I think the word guidance works better than advice in that particular context.
I think something that that highlights to me there, Thomas, as well is, and a couple of things that you'd shared that I just want to sort of pull out is asking an understanding about somebody else's situation first is what's going to help us in building that credibility in the conversation. It's going to be what helps us in building rapport in the conversation. Because I think a big part of it is,
I know we would never sort of advocate for just turning up and shaking someone's hand and saying, right, tell me, who have you got in your network who you think you refer me to? These are the things that I do. Let's see how we can help one another out, right? By reminding ourselves that actually we still need to stay, we still need to be interested in them, not interesting.
And we still need to start with questions and start with building an understanding of their business and their challenges before we then respond with, you know, with... with asking for a referral and then wrapping that up in Johnny and your point around sort of advice and guidance as using that sort of humbly, but also recognizing that if we ask for that, we are likely to get that.
We are still likely to get that response. Thomas, just as we close up our conversation from today, we started with three key things that helped you in being successful.
If you've got someone listening to this podcast who's relatively new to referrals and hasn't seen it as a way of developing business, how would you sort of summarize the three key things for those sorts of individuals to be thinking about and to maybe start to put into practice to really develop this referral habit?
Very simple to answer that question. The three things are, firstly, you have to be in the habit. So create an accountability mechanism for yourself to exhibit those behaviors and get you into the habit of asking for a referral at every opportunity. How to get into a habit varies for each individual, but make sure you get into the habit.
The second thing is the technique that you need to use in order to ask for a referral is not to simply ask. But we need to be exploring, if you like, the mental little black book of the person we are asking. We need to help them to explore it. And the third thing I would say is actually a negative. I have never paid for a referral. A lot of people ask that question.
Should we be rewarding the person who gives us referrals? I've been the recipient of a couple of bottles of nice red wine or champagne, and that's fantastic when I've given referrals to people. But there is no need to do that, especially where you've got the trusting relationship or the respectful relationship. You do not need to pay or reward people for referral.
They're just willing to do it out of the goodness of their hearts, which I think comes back to Johnny's point around the psychology of this. The act of asking for referrals is primarily a psychological thing, which is why the habit is so important, because there are psychological barriers for most people.
I think that's awesome. You know, even having this conversation with two wonderful consultants like yourself, business winners, you know, business owners and people have done so well in your own careers. It's really sort of prompted that point of bringing it to the surface again. I might just have to get a tattoo to make sure that I see it every day. But this has been really helpful.
Thank you, Thomas.
Wonderful. And yeah, I did. Johnny agree. There's this bring it into our conscious competence and thinking about this. And Thomas, thank you so much for your fantastic advice and guidance to us and to and to the audience on today's podcast. Thank you so much for joining us today. Johnny, thank you as well as ever. And thank you to all of our listeners of the Growth Workshop podcast.
We look forward to seeing you again soon. Right. Thank you both. For more insights, make sure you subscribe. And if you enjoy the journey, don't forget to leave us a review. Your feedback fuels our growth. Until next time, keep up that forward-thinking mindset. Goodbye.