by Paul Quinn, PeoplePulse.com.au.
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.
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.
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?
the feedback survey.
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?
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.
how then does one go about setting such a referral system
up for optimal impact?
steps to set up an effective survey-based candidate
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.
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. An online survey
product such as PeoplePulse has ready-made candidate
feedback and referral templates to help you get set
up with minimal fuss.
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.
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.
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
'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
Follow up referrals and measure results!
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.
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 of hire.
an Australian-built online candidate feedback and referral
is an Australian built online feedback and survey tool
used extensively by Australian and New Zealand based
organisations to conduct online employee surveys. The
tool can also be used by HR to conduct cost effective
staff climate surveys, training needs analysis surveys,
exit interviews, and 'new starter' feedback surveys
to name a few popular uses.
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completing the form below, a PeoplePulse representative
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© 2005. Written by Paul Quinn, Managing Director
of Quinntessential Marketing Consulting Pty Ltd. Reprint