If you've ever been caught on a call, running late for your next meeting, you can probably relate to this.

‍Scenario #1. You’re in a phone meeting and (perhaps unwisely) you’ve booked back-to-back meetings. It’s getting dangerously close to the start time of your next meeting and you’re barely paying attention to what is being said, in an effort to exit gracefully. You finally get off the call, running late for the next meeting.  The process of extricating yourself was something short of elegant. Let’s change one small part of that call.

‍Scenario #2. You’re on the same phone meeting but you address your time constraint up front. Before you jump into the real conversation, you mention that you have a hard stop at the top of the hour and offer to set a follow-up if there is more to discuss. Now,  as you approach the end of your time, you aren’t shifting uncomfortably and waiting for a break in the conversation. Instead, you simply say you’re sorry but you’re going to have to jump off the call. No one is offended. We can learn a lot from this simple technique when it comes to referrals as well.

Sure, I Can Meet with Your Friend….

A version of this scenario plays out regularly when it comes to referrals. Imagine a client sends you a referral that isn’t a perfect fit. The prospect might not meet your minimum or perhaps there’s a disconnect on personality or expectations. Absent of an elegant way to say ‘no thank-you’ your sense of obligation kicks in and you end up working with clients who don’t exactly fit.

It’s time to stop the madness. It’s time to say no to clients who don’t fit whether or not they were referred.

What would happen if, instead, you addressed this potential with both your client and the prospect before you went too far down the road. All of a sudden saying no isn’t just comfortable, it’s welcomed.

The Danger of Saying ‘Yes’

Based on our investor research, 38 percent of clients say they were referred by a friend/colleague and another 19 percent by a professional. It’s almost impossible that all of those referrals are exactly right for your business. And while it’s easy to shrug and say “they can’t all be perfect”, I believe that’s a dangerous approach. If we accept clients who aren’t right for our businesses, we'll lose money, strain the resources we could be investing in our best relationships and limit our productivity. This is serious business. Today I want to share a simple plan to say no to clients who don’t fit, in a way that makes clients and prospects feel like you are looking out for them – because you are. Before we get there, it’s important to recognize that you can't rely on clients to refer the right clients for your business. It's not their job.

Don’t Make ‘Fit’ a Client Responsibility

It's accepted wisdom that you should share your ideal client definition with clients. And while that’s probably not a bad idea, we need to keep something important in mind.[Tweet "It's not your client's responsibility to know who is a good fit for your business. "]You can help clients to spot a referral opportunity based on needs, but that doesn’t mean the referral will be an exact match. For example, you might do an outstanding job of telling clients about how you can help business owners. If a client sends you a business owner that's on the verge of bankruptcy, it’s unfortunate but entirely appropriate. Your client didn't have that level of detail. It’s wise to keep three simple steps in mind:

1. Accept that your clients may refer people who aren’t right,
2. Thank them whether the client is right or not
3. Implement a process that limits your sense of obligation to take on any client while ensuring you offend no one.

Let’s look at the third step in more detail. It’s all about how you describe your referral process to clients and, more importantly, when you tell them.

3 Steps to Saying No to a Bad Referral

Step 1. Know your deal breakers

‍It’s probably a blinding flash of the obvious, but if you haven’t clearly defined with whom you will and won’t work, this strategy won’t work. Absent of a clear definition, everyone is a target so you’ll have to take what you get. However, when it comes to client acceptance, most of us have deal-breakers (whether those are fully articulated or not).A deal breaker is a characteristic of a prospect that would cause you not to work with him or her. Assets are an obvious deal-breaker if you have a minimum. However, deal breakers might (and probably should) also include things like personality, values or needs. You can read more on that here.In this first step, you’ll need to define your deal breakers.

‍Step 2. Define your approach in advance

‍The more defined you are in your approach to dealing with referrals (before they happen), the more comfortable and confident you’ll be in delivering the message. So what does your approach look like? Here are five questions you'll want to answer.

‍Q1: How do you respond to clients who provide referrals?

‍Forgot the prospective client for a moment. What will you do to thank clients for providing a referral (whether that person is right or not)? I’m not a big fan of ‘gifts’ for every referral; I’m simply not comfortable with the potential perception that you are buying referrals.However, you might consider:

• Sending an annual gift to (or making a charitable donation on behalf of) anyone who has referred throughout the year. In this way you disconnect the gift from the act of referring.
• Sending a hand-written thank-you note.
• Calling the client to say thank-you

Here’s a hint on the last point. If you call the client, it gives you an opportunity to learn more about the person he/she referred without pushing too hard.

‍Q2: How will you connect with the prospective client?

‍What will you offer to a prospective client before you know if he or she is right for the business? Because there is a risk of a poor fit, consider a phone meeting first to determine if a face-to-face is even needed. You may want to offer a face-to-face as a thank-you to your clients. It's important to recognize, however, that most people don’t consider spending more of their time, rather than less, a ‘thank-you.’

‍Q3: How do you evaluate a prospective client who is referred?

‍When you meet with the prospective clients, what are the questions you will ask that will help you understand if there is a fit. At a minimum, you need a question for each of your deal-breakers.

‍Q4: What will you do if the referral doesn’t fit?

‍Now here’s the big question. If there isn't a fit, how do you comfortably say ‘no’ without offending the prospect or your client? The key to getting this right is to recognize that, for the prospect, it’s more important to find a solution than to work with you. I know, that’s harsh. Case in point. I take calls regularly from advisors who may be interested in working together. My problem is that I don’t provide individual coaching or consulting. However, I love to talk to advisors about their challenges and I do everything I can to find them a resource. I’m reasonably sure they get over not working with me in the time it takes to hang up the phone. More importantly, they walk away with a solution. So how will you find solutions for prospects who are referred? What are the questions you can ask that will help you direct them appropriately? Do you have a list of people to whom you can refer based on the needs of that prospect?

‍Q5: What will you do if the referral is a good fit?

‍Of course, there's always the chance there will be a perfect fit. It should be obvious what you'll do for the prospect as you move into the on-boarding phase. However, don’t forget that client who made the referral. Perhaps, with permission, you could send a quick note to say thank-you again and let them know you are working together. Permission is, obviously, critical here.

‍Step 3. Share your referral process with clients in advance

‍Timing is everything. Now that you’ve mapped out the process, it’s time to share it with your clients. Let’s think back to that opening example and the impact of being proactive with referrals.

• In scenario one you haven't shared your process, you met with a prospect that didn’t fit and you felt obliged to work together because he or she was referred.
• In scenario two, there are no surprises. Instead you’ve already taken the time to share your process with your clients. It might sound something like this.

“I can’t tell you how much it means that you’ve referred people to us.  I wanted to share a little about our process when we receive a referral. One thing I can promise is that I'll meet with anyone you refer to understand their needs a little better. Often I feel I can help and we work together. Sometimes I actually feel there is someone else who is better suited to help and I provide them with 2-3 names of people I think will add more value.”

‍Note that this explanation has nothing to do with whether or not that prospective client meets your minimum. Keep money out of the conversation or it may go horribly wrong. By the way, this very kind of comment will probably lead you to a deeper discussion of who is right for your business and that, my friends, is the path to significantly more referrals.

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Thanks for stopping by,

Julie

‍P.S. As many of you know, I’m working on a book this summer (and loving it). If you would like to receive the first chapter in advance, click here and let me know.