How and Why to Decline A Referral

What you say! Why would I ever decline a referred lead? After all, some liked or trusted me enough to pass my name on; to say something nice about me or my company -to show their confidence in me.  Why would I say no thanks?

Well, I can thing of a lot of reasons – here are the top four that come to my mind:

A) You don’t provide the service or product the referral wants ( that’s an easy one)

B) You are too busy and won’t provide the service level the person referring the lead has set as the expectations at

C) The service or product the referral wants is a bit too far from your traditional offerings

D) The referral won’t work with you through the process you know you are most successful with following

Let’s look at each of these reasons in more detail.  One thing to point out at the very start is that each of these reasons makes good sense if you have done your work in defining your company’s purpose and value.  That is you need to stand for something in why you are in business and the value you want all your customers to receive when they work with you. If you haven’t done this, and you simply bounce from one revenue opportunity to another without an overall plan, then you can stop reading now – don’t ever decline a referral (but you probably don’t get many either ).

So, for A) – not providing the service or product that the referral is looking for.  Turning that down graciously requires 2 steps.  Most of us can handle step one easily, which is saying simply that we appreciate the inquiry but that is not something we offer/ do.  The second step is to offer the referral an alternative where they may get their need fulfilled.  So how good is your list of strategic partners? Do you have someone to refer others too for typical things you get asked for an don’t do?  If not, you are missing a great opportunity to yield a relationship with another firm that can also refer business to.

In the case of B) – where you are just too darn busy – this is a moment of trust where you can establish your reputation of not over promising and under delivering.  Simply not returning a call or email is rude – both to the referral that reached out and to the person that recommended you. So acknowledge the inquiry and let the prospect know that you are flat out at the moment.  Give them a time frame where you will be able to reengage with your full attention AND give them an alternative if they need it now.  The alternative you offer should be a friendly competitor – someone who offers the service yor product same as you do and who you have a friendly relationship with.

For C, where the service or product is a bit far from your traditional offering, turning this down makes good business sense if you have a profitable focus.  Accepting a referral that will drag you from your core business just to please one customer is sacrificing the many for the few or the one.  Now, the referral may be taking you into a new niche market or it may make sense from an alliance standpoint, but if you accept it and take that customer, be very clear on why you are doing that. If you decide you don’t want the referral, see above and decline it the same way you would in the case of example B.

Situation D is the trickiest.  In this case you have gotten a referral that needs what you sell.  And they come to you with an element of trust already established since they were referred to you by someone they likely trust. But, they come to you wanting to buy in a different way. They don’t want to follow your process or your rules – they want to do it there way.  Now if you sell a product that is pretty easy to determine the fit for – either its clear it meets someone needs or it doesn’t, you can relax a bit and work with them, their way.  But if you sell a product or service that really has to be fit to the client (eg consulting services, software, machinery ), then you have a problem because you need to go through your process to make sure you’ll have a happy referral and a happy customer.  Here’s what we do.  We call the person that referred the prospect to us and explain the situation. We ask them if we will cause them a problem if we decline the business. Either they say no, in which case we pass or they say yes, in which case we ask them to explain to the person they referred to us a bit more about our process and why they trust us in the first place.  And then we start again.

No matter what happens or what the situation is – a great referral and a new customer, or a situation A, B, C, D or other – we make sure we follow up with the person who gave us the referral.  Sometimes saying no thanks is the best course of action – you just have to have thought it through to decline gracefully.

So have you had a challenging referral situation? Leave us a comment, we’d love to hear about it.

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at www.leadingresults.com/ramblings.