MBA2576 Q&A Wednesday: What’s the Right Way to Ask for Referrals? - The $100 MBA Show

Summary

The $100 MBA Show: MBA2576 Q&A Wednesday – What’s the Right Way to Ask for Referrals?

Released on January 22, 2025

In episode MBA2576 of The $100 MBA Show, host Omar Zenhom delves into the art of asking for referrals, a crucial strategy for business growth. Drawing upon over two decades of entrepreneurial experience and insights from his father—a top car salesman—Omar provides a comprehensive guide to effectively securing referrals that can exponentially expand your customer base without hefty marketing expenditures.

Introduction to the Listener’s Query

The episode begins with Omar addressing a question from a listener named Franco: “What’s the right way to ask for referrals?” This query sets the stage for a detailed exploration of strategies to harness the power of referrals in business development.

Step 1: Be Specific When Asking for Referrals

Omar emphasizes the importance of specificity in requesting referrals. He contrasts common, vague approaches with more targeted methods:

Vague Approach: “Do you know someone who would be interested in buying a new car as well?”

“This sounds normal, but it often results in a non-committal response like, ‘If someone comes to mind, I’ll let you know.’” (02:45)
Specific Approach: “Who are the three people you know who would really be interested in a new car in the next six months?”

By asking for a specific number and a defined time frame, Omar ensures that the request prompts actionable responses. He shares a personal anecdote from his father, who would provide customers with a notepad to jot down three names and phone numbers, significantly increasing referral rates.

“Choosing a specific number makes the task actually easier, more actionable while still being open-ended enough to encourage participation.” (04:15)

Action Step: Next time you ask for a referral, be precise. Request a defined number of referrals and provide a clear context, making it easier for your customers to respond effectively.

Step 2: Timing is Everything

The optimal moment to ask for referrals is when the customer is most satisfied with your product or service. Omar illustrates this with his father’s car sales strategy:

Ideal Timing: When the customer is about to take delivery of their new car, basking in the excitement and satisfaction of the purchase.

“When you ask for the referral is super important... this is when they're on a high with their new purchase.” (05:10)

He also references Alex Hormozi’s $100 Million Offers, suggesting that another perfect time is when the customer requests a discount.

“If a customer asks for a discount, you can say, ‘I’d be happy to offer you a discount if you could provide me three referrals.’” (06:00)

Action Step: Identify key moments in your customer’s journey—such as achieving their first success or expressing satisfaction—and strategically position your referral request during these high-engagement periods.

Step 3: Make It Easy for Them

Simplifying the referral process significantly increases the likelihood of receiving referrals. Omar recommends providing templates and incentives:

Referral Templates: Supply customers with ready-to-send messages that they can easily copy and share.

“Make it super simple. They can just copy and paste it, change your variables, and send it to a friend.” (07:30)
Incentives: Offer rewards for both the referrer and the new customer to create a win-win scenario.

“When you sign up, email the customer support team and tell them I referred you, and the support team will give you a free month.” (08:00)

Action Step: Develop referral templates and consider introducing incentives. Share these tools with your customers to streamline the referral process and encourage participation.

Step 4: Follow Up and Show Gratitude

Acknowledging and appreciating referrals fosters goodwill and encourages future recommendations. Omar outlines best practices for follow-up:

Gratitude towards the Referrer: Send a thank-you note or a small gift to express appreciation.

“Sending a quick thank you note or a small gift from Amazon shows that you care.” (09:15)
Engaging the New Lead: Ensure that the referred lead is promptly addressed to maintain engagement.

“Follow up with both the referrer and the new customer to build a lasting relationship.” (10:00)

Action Step: Implement a system to track referrals and consistently follow up with personalized thank-you messages to both the referrer and the new customer.

Key Takeaways

Omar Zenhom concludes the episode by reinforcing that effective referral asking is a strategic process, not a matter of luck. The four-step approach he outlines—specificity, timing, ease, and gratitude—provides a robust framework for leveraging referrals to grow your business sustainably.

“Asking for referrals isn't about luck. It's about strategy. It's about being specific, asking at the right time, making it easy, and always showing gratitude.” (10:45)

By implementing these strategies, businesses can transform satisfied customers into enthusiastic advocates, fostering organic growth and expanding their customer base with minimal marketing spend.

Conclusion

Episode MBA2576 of The $100 MBA Show offers invaluable insights into the nuanced process of asking for referrals. Omar Zenhom’s blend of personal experience and actionable strategies equips listeners with the tools necessary to effectively secure and utilize referrals, thus driving business growth in a practical and sustainable manner.

For more practical business lessons, subscribe to The $100 MBA Show on your preferred podcast platform or visit 100mba.net.

Transcript

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Yay. Free your team from expense reports today. Switch your business to ramp.com there's a simple way to double your customer base without spending a dollar on marketing. I know because when I got started, I had to use this strategy because I didn't have any money to spend on marketing. I'm talking about referrals. Referrals are one of the most powerful tools for growing your business. But most people ask for referrals. All wrong. Today I'm going to show you the right way to ask for referrals and when to ask them to maximize your results. I'm going to share with with some of the best tips I got from my father when it comes to referrals, who is one of the top salesmen in his field for over 20 years. Welcome back to the $100 MBA Show. I'm your host, Omar Zenholm, where I help you start, grow and scale your business with practical business lessons. Three days a week. Monday, Wednesday, Friday. Today's Q and A Wednesday, where we answer a question from one of you, one of our listeners, one of our subscribers, one of our community members. Today's question is from Franco and he asks what's the right way to to ask for referrals? Franco, this is a great question because when you have a happy customer, they can become your best salesperson. Referrals is not just about the asking. It's about the timing, the strategy and understanding human psychology. I'm gonna break it down for you. Don't worry. Starting with step one. Ask for referrals the right way. One of the biggest mistakes people make when asking for referrals is being too vague. My dad was in car sales. He was one of the top salesmen for Acura cars in the U.S. he was the number one salesman on the eastern seaboard. And I learned a ton from him because I used to go to work with him on Saturdays. I used to work at the wash base, wash cars at the dealership but my job ended at 3pm and he continued until 9pm he was my ride home. So I went up to the showroom and used to watch him perform, do his thing and sell cars. One of the things I remembered was after somebody signed on the dotted line, a customer just bought a car. Most salesmen would ask for referrals all wrong. My dad never asked for referrals this way. But most salesmen would ask like this. They would say, do you know someone who would be interested in buying a new car as well? Do you know anybody in the market looking for an Acura or looking for a reliable luxury car? Now, in and of itself, this sounds pretty normal, right? That sounds pretty good. And what's wrong with that? The problem with phrasing it that way, by phrasing, do you know someone? It puts the burden on the customer to think hard about, do I know somebody who wants to buy a new car too? And most people don't bother. I remember clearly that people used to just say to the salesman, if somebody comes to mind, I'll let you know. I have your business card, I'll let you know or I'll refer them to you. And of course that never happens, right? They're not going to really do that. So what's a better approach? My dad used to do something a little bit different. It's slightly different, but makes all the difference. Instead of asking, do you know? He would say, who are the three people people you know? Right. So number one, changing from do you know? To who you know? And making it specific, saying three people. Who are the three people you know who would really be interested in a new car in the next six months? So what does this do? Well, it makes people think about who they know instead of do they know anybody do you know? Is like a yes or no answer. Who you know is. Okay, let's think of three people and would be interested in the next six months. So that's a pretty big window. And also the specific, specific number of three. Now my dad would add a little bit of an element here. He would give him a paper and pen. It was like a small little like post it note type of thing, something like this, right? And he would say, write down those three people their name and their phone number. Now this was a 90s, so phone numbers were what people use to communicate, not email. And he would say, take your time. I'm gonna go and pick up a gift for you that I got prepared for you before you arrived. And he would leave them at his desk as they would Just kind of do this homework and write down three names, three phone numbers. I think my co worker, I think my cousin, I think my uncle might be in the market and he would come back from the parts department with like a set of new floor mats that would fit the car. My dad was planning on giving them this gift anyway, but it was an interesting situation where I would watch where they were right things that maybe they wouldn't finish it and then he would present them that gift and they'd be like, oh wow, that's amazing, thank you so much. And they just continue finishing the homework and get those three names and numbers down. At the very least they would say I got you two names and numbers, I will come back and give you more. Want to do my first service again, choosing a specific number makes the task actually easier, more actionable while still being open ended and enough to encourage them to kind of participate in this action. So stop saying do you know someone who would benefit from my product? And start saying who do you know? Or who are the three people who would benefit from my product or service? And I like phrasing it with who do you know would benefit from? Because this is your opinion, I think this person would benefit from this product or service instead of would be interested. Who do you know would be interested? Well, I don't know if they're going to be interested. I don't know what they're thinking. I know what I'm thinking. So that's a different little phrasing. They're saying who do you think would benefit? So as an action step, the next time you ask for referral, be specific. Give them like a very specific assignment. Your customer will really appreciate having a clear task and watch how much more responsive they will be.