Article: A Smart Way To Gain Candidate Referrals
As all successful
executives know, new business leads gained through
referrals is good business to chase! Indeed customer
loyalty guru, Frederick F Reicheld, wrote in his
influential book 'The Loyalty Effect' that closing
rates for referral prospects are significantly
higher than closing rates for 'walk-in' customers
who have no prior knowledge of your organisation.
A good example cited by Reicheld
of the power of referral business is Northwestern
Mutual, a US-based life insurance company where
agents are trained to sell solely through
referral. Reicheld concluded that Northwestern
Mutual's yield rate for referral selling was
one close for every ten referrals contacted
compared to their yield rates for non-referral
selling which were so much lower that pursuing
them made no economic sense.
If we accept that to gain
new business through referrals is an attractive
proposition, how do we apply that knowledge
to the recruitment arena? Or more specifically,
how do we apply the concept of referrals to
help us attract new, high-quality, candidate
applications in a tight candidate market?
Enter the feedback survey.
One proven approach to driving
more candidate referrals is the humble post-service
feedback survey. The principle is simple: within a
few days of dealing with a candidate, take the time
to ask for their feedback on how you can improve and
at the same time ask whether they have any friends
or colleagues who are looking for work. Requesting
referrals at the same time as seeking feedback on
your performance is not only appropriate, it also
makes fantastic business sense. After all, if you've
done a good job, why not leverage the goodwill you
have generated and ask candidates if they know of
anyone else you can help?
Indeed the Harvard Business Review
has shown that if you give good service and then immediately
take the opportunity of asking for a referral, more
than 50% of people will recommend you to other prospects.
A very impressive figure compared to the 5% of referrals
it is estimated you receive when you give good service
but do not ask for a referral.
So, how then does one go about
setting such a referral system up for optimal impact?
Five steps to set up an effective
survey-based candidate referral system:
1. Decide who to survey.
Job applicants. Interviewed candidates. Short-listed
candidates. Placed candidates. You can survey one
or all of these groups. The key is to strike a balance
between volume and quality; whilst surveying everyone
who applies for one of your jobs may result in more
feedback and a greater number of referrals, the
quality of those referrals may be lower than had
you only surveyed short-listed and placed candidates.
2. Set up your survey.
Engage a professional online survey software
provider and set up a basic candidate feedback and
referral survey. Don't waste your time using expensive
and cumbersome paper-based systems. Local recruitment
survey experts www.PeoplePulse.com.au has ready-made
candidate feedback and referral templates to help
you get set up with minimal fuss.
Ensure that you include an automated
'refer a friend' option at the end of the feedback
survey. For example, one of the last questions on
your survey might be: "If you were happy
with the service we provided, would you like to
refer us to a fellow colleague or friend who may
be interested in talking with us about suitable
employment opportunities?" If the candidate
answers "YES", then branch them
off to a new page asking them to enter their colleague
or friend's name and contact e-mail address. Give
them the option to write a personal message to their
friend (eg. "I had a great experience with
these guys, you should give them a call").
Upon completing the referral form, the survey software
should trigger two e-mails: one to the referred
party inviting them to contact you and linking them
to the jobs page on your website, and one to you
to keep as a record of the referral that occurred.
The survey software should also
provide you with full reports on who referred whom
and when it took place. This makes tracking referral
bonuses an easy task.
3. Offer an incentive.
Offer candidates an incentive to refer their friends
or colleagues. For example, the cost of an iPod
Shuffle (A$149) as an incentive is a small price
for a recruitment agency to pay for a candidate
who may result in a $7,500 placement fee. Likewise
for corporate employers, an $149 iPod pales in comparison
to job advertising costs that can often balloon
out into four figure sums.
4. 'Do you want fries with
that?' Systemise your processes.
McDonalds spend thousands of dollars every year
to train their crew members to ask business generating
questions of each customer who passes across their
cash registers. Likewise, in this candidate tight
market you shouldn't neglect the opportunities that
can come from the candidate feedback and referral
process. Whether surveying job applicants or newly
placed candidates, ensure that every candidate you
want to solicit referrals from is contacted within
two weeks of their last contact with your organisation.
Automated survey invite templates that are triggered
by events recorded in your database are the ideal
5. Follow up referrals and
Be sure to follow up any referred candidates who
you don't hear from within a week of the automated
invite being sent to them. If the referring party
has given you permission to contact their referrals
directly, make sure you don't let the opportunity
go to waste. Also be sure to measure the results
of your referral program. Indeed one of the great
aspects of a candidate referral program such as
the one outlined above is that the results and return
on investment are highly measurable. Your survey
software should tell you the number of people that
both gave you feedback and referred others to you.
Any placements made can easily be cross checked
against referrals in the system. Remember, one placement
alone will more than pay for the cost of setting
your referral system up.
In short, using surveys to ask
for candidate referrals is a proven approach that
makes sound business sense. If you accept the principle
that effective, intelligent and highly educated people
often socialise with equally effective, intelligent
and highly educated people, then candidate referrals
that result from newly placed or short-listed candidates
can help to not only lower your candidate attraction
costs, but can also help to increase your quality
trialling an Australian-built online feedback and referral
PeoplePulse is an Australian built
online survey tool used extensively by Australian and New
Zealand based organisations to conduct staff and customer
feedback, and to solicit and track referrals.
Please complete the form below to arrange your
FREE demonstration and to receive a PeoplePulse pricing and information sheet.
Upon completing the form below, Quinntessential
will contact you to better understand your needs and unique situation. From there
we will arrange a suitable time to demonstrate the system with you.
Please be assured that your
correspondence with us is confidential. We will not divulge
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The above demonstration request form was powered by PeoplePulse.
© 2005. Written by
Paul Quinn, Managing Director of Quinntessential Marketing
Consulting Pty Ltd. Reprint with
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Smart Way To Gain Candidate Referrals
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