The Critical First Steps You Must Take to Turn Referrals Into Clients Referrals are great, but then you still need to convert them into clients. Here are some pre-vetting and first-contact techniques to accomplish that.

Often described as the most powerful form of marketing, referred customers — among their many virtues — have no less than 25% higher profit margins than non-referred ones, according to a 2011 joint study conducted by the University of Pennsylvania and Goethe University Frankfurt. So, the number you can convert into customers or clients will measure the success of your business in a very real way.

But how to do that?

Be active, not passive

This might seem elementary, but it's worth noting that the only way to generate referrals is through other people. Although this method can work with new and developing relationships, I apply it primarily with strong ones — people with whom I've shared common interests over a long period.

The heart of my method is the active recruitment of referral sources. You can, of course, put a system in motion the moment someone tells you that he or she knows someone who may need your products or services, but I've found it best to not wait around for referrals. I go and find them. In that search, you should recruit sources that meet some essential criteria, so seek those who:

• Want to help you, or can be inspired to

• Have time to help you, or are willing to make the time

• Have the ability to help you, or can be trained to

• Have the necessary resources

• Have relationships with the types of people you want to target

• Would make good referrals for people you know

To guarantee a long-term sustainable relationship, sources must have at least most of these characteristics. Time and time again, I have worked with frustrated business owners who can't understand why they are not getting the referrals they should. On the surface, they seem to be doing all the right things, but in many cases discover that they have mistargeted the "visibility, credibility and profitability" process (see the next "Related" link below) with their referral sources.

To strengthen such relationships, doing periodic one-to-ones is very important, not least because they help you understand the specific assistance you'll need from them. An additional effective way of motivating sources is offering them help in using your referral-generating system to get their own customers and business opportunities.

Related: Build Relationships That Last

Best practices for initial contact

After compiling a list of good prospective referral sources, the next action is initiating contact, but what's the best way? Should you send a letter, email, text or arrange to meet in person? Any of these methods could work, but I've found that first communication is best done by telephone — more personal and friendly than a written message, and more convenient for both parties than a face-to-face meeting.

It's vital to plan that call carefully, however, including which topics you want to cover. Keep in mind that the purpose is to ask for support in generating referrals, so be ready to give a brief overview of your plans. If the vibe seems right, schedule a follow-up to discuss in detail.

A few more first-call guidelines:

• Begin with an appropriate greeting and some small talk.

• State the purpose of the call, ask whether this is a good time to talk, and detail the amount of time you need.

• Get to the heart of the conversation by offering something of value. For example, explain how the topics you want to cover will help him or her.

• If the talk is going well, indicate that there is additional information for you both to review and consider scheduling a follow-up face-to-face meeting, an online video meeting or another phone call.

Related: Why Mastering the Art of Conversation Will Make You More Money

A first-call script

Although you shouldn't expect to follow it mechanically, you may find it useful to prepare a script to anticipate how this first contact might play out. To do this, we'll invent a fictional character, Dr. Mark Star, whose goal is to recruit a referral source. That source is Trudy Grossman, who is in a position to help him secure a radio talk show interview to promote his new book.

Greeting: "Hi, Trudy."

Small talk: "How are you doing? How's your family? Did you go anywhere over the weekend?"

Purpose: "Trudy, the reason I'm calling is to see if you can help me get a radio talk show interview to promote my new book. And I'd also like to show you how I can help you generate referrals for your own business. Right now, I'd like to give you a quick overview of some ideas and get your reaction to them. Is this a good time? If you're interested, we can arrange to discuss them later in more detail." [If the answer is "yes," continue.]

Overview: "As I'm sure you know, getting referrals is one of the best ways to generate business. I've been reading about an approach for generating them, and have prepared a plan that will help me attract more customers and business opportunities. It's practical, and I believe it covers everything. If you're interested, I'd like to show you how to use the system for your business, too. Are you interested?" [If the answer is "yes," continue.]

Scheduling the meeting: "Great! I'd like to meet with you as soon as possible, say within the next week or two. It should take about an hour. When would be the best time?"

Close: "Okay, Trudy, I'll send you an outline of what we need to discuss and some information that will help you understand how the system works. You should get it in a day or two. If you have any questions before we meet, please don't hesitate to call. It was great talking with you. I look forward to our meeting on ____ at ____."

Based on these guidelines and sample script, develop your own outline for initial contact with prospective sources. After a little fine-tuning, you'll be making calls that reliably lead to transforming referrals into real business.

Related: The Complete Guide to Creating a Customer Referral Program That Boosts Sales and Loyalty