Bill Cates recognized the power of referrals early in his career. Fresh out of college, he took a job selling home improvement services. The day he made his very first sale, an overbearing manager forced him back into the client’s home as the family was settling in for the night, demanding Cates ask for a referral to the neighbors.

The client – a sales manager who appreciated Cates’ gusto and the courage it took to come back in – did give him three referrals, but not to other homeowners. Instead, he pointed him in the direction of three job opportunities. Cates followed up, and each and every person offered him a new position.

That fateful day set the stage for what would eventually become Cates’ career. Today, Cates is a business coach and bestselling author specializing in referrals, who teaches professionals to use his Perpetual Revenue System to maximize the lifetime value of every client. His latest book, Beyond Referrals, is filled with practical ways to build solid relationships with your contacts, obtain referrals and convert them into high-value clients.

First, it’s important to understand why referrals are important. In our personal lives, we usually meet new friends through other friends. Our professional lives should be no different. There’s a host of reasons Cates says we should actively seek referrals: they cost nothing, they increase the speed of the sales process, they boost the close ratio, and they lead to bigger sales, to name just a few. One of the most important benefits is trust – referrals are what Cates calls “borrowed trust” since the prospect already has faith in you and your services, thanks to the connection you have in common.

Under his Perpetual Revenue System, Cates illustrates how one satisfied client can quickly multiply into many more. Clients provide referrals, which then turn into introductions and appointments, and the cycle begins again. It’s easy to see how having your existing connections introduce you to new people – or as Cates says, “Don’t keep me a secret!” – extends the lifetime value of a client.

“One of the beautiful aspects of this dynamic is that it does not result in linear growth, one new client at a time,” writes Cates in Beyond Referrals. “This process creates exponential growth, where one client can lead to two, two to four, four to eight, and so on. Your business grows geometrically!”

Let’s take a look at some of the valuable advice contained in Beyond Referrals to help leverage our relationships and grow our business.

Mindset Matters

There is a psychological hurdle many face when it comes to referrals. The mere thought of asking for a referral makes some of us sweat, while others fear the possibility of rejection. Our minds are a powerful thing and coming at it from a place of weakness can sabotage your strategy. Cates has identified five qualities that help build a referral mindset:

1. Commit to referrals, don’t just dabble in them. Make the decision to move forward with a referral strategy and stick to it.

2. Don’t view asking for referrals as a risky proposition. Ditch any limiting beliefs and embrace referrals as a safe business-building activity.

3. You’ve got to give to receive. To create a culture of referrals, you need to add value – and refer – to others, and Cates discusses methods to do just that.

4. Iron out a game plan. Don’t leave referrals to luck; make sure you are proactive about your approach and have a plan in place.

5. Expect people to refer to you. This doesn’t mean you should be cocky about it, it means you should approach each relationship with “confident awareness.” It will keep your eyes open to the possibilities.

Even word choice can play a role. Cates suggests using the word “introduction” instead of “referral.” A referral could lead your contact down the wrong path, making them think you are simply asking for a phone number or a list of names. Cates says asking for an introduction – specifically an “engaged introduction” where your contact collaborates with you on the best approach – can result in significantly greater successes.

“An engaged introduction is not just word of mouth,” Cates writes. “And it’s not just ‘give her a call and feel free to use my name.’ An engaged introduction gets your foot in the door and establishes a genuine connection between you and the new prospect.”

Cates does a good job laying out the value hierarchy for referrals and introductions. Of least value is a referral “to use my name,” followed by an email introduction, and then a phone introduction. Hands down, the most valuable introduction is one that takes place over coffee or lunch.

The VIPS System

Cates has developed a specific referral system to follow called VIPS. Practicing these methods and messaging will increase your chances of seeing significant results.

Value Discussion: Continually check in with your clients to ensure they recognize the value you are providing to them. The goal isn’t for you to tell them what you’re doing, but rather have them identify the value themselves and put it in their own words. Address any negative concerns promptly.

Treat the Request with Importance: Be confident and give the process the attention it deserves by scheduling value discussions into each client meeting. If a client was initially referred to you, take the time to remind them of how you first met.

Permission to Brainstorm: By asking your contact permission to brainstorm with them, it softens the referral request. A collaborative approach engages your contact and makes them more willing to suggest people who may benefit from your services.

Suggest Names and Categories: Don’t leave it up to your contact. Come armed with the names of specific people to whom you’d like to be introduced, along with a list of industries or types of people you would like to bring on as clients.

A Practical Approach

Instead of presenting pages of theory, Cates has taken a controlled, methodical approach to the referral process. Beyond Referrals is filled with dozens of easily executable ideas – from nurturing relationships with clients to dealing with objections – that can be implemented into any strategy. We especially liked the inclusion of “Action Steps” throughout the book, making it easy for you to adopt new high-quality activities in your own referral process.

“One thing I’ve discovered is that even when you ask for referrals and don’t get them, you are creating opportunities for word of mouth and introductions down the road,” writes Cates. “There is a synergy among all the ideas in this book that will help you create a thriving referral culture for your business.”

If you’re interested in learning more, you can purchase Beyond Referrals at www.referralcoachstore.com. Feel free to use the promotional code Referrals20 to save 20 percent off the cover price.