To create a culture of customer referrals for your business, you must first understand and recognize the vital importance of referrals. Even if you’re busy, you need a constant stream of new customers and clients to replace those who move away or just stop buying.
In addition, it will make a huge difference to the profitability of your business if you can take on better organised clients who are less price conscious. Referrals are by far the best low-cost way of getting new business and should be your biggest source of new customers.
4-step process
As with all areas of your business, you need a good system to ensure you can maximise the number of referrals received. A good system for getting referrals should consist of four elements:
- Earning the referrals
- Asking for referrals
- Recognising referrals
- Rewarding referrals
1. Earning the referrals
Everything you do in your business is marketing — how you answer the telephone, the promptness of a response, whether you sort out any problems after the sale, how and when you deliver the goods and services, and most importantly, the level of enthusiasm and interest you (and your team) demonstrate in day-to-day business activities.
You won’t get many referrals if you show that you don’t care about helping your customers or provide a poor or average service. To earn referrals, you have to look for ways to delight your customers, go beyond the norm and add value.
2. Asking for referrals
Asking for referrals doesn’t necessarily mean asking outright; it means setting the scene and creating the right conditions for referrals to occur. There are a number of strategies you can adopt to ask for referrals without upsetting sensitive customers or clients.
If someone asks you if you’re busy, say “Yes, but I’m looking for more customers, so if you know anyone let me know”. Or you can hand out or send referral vouchers, cards, certificates, letters or emails saying you have the capacity for more business. Talk about referrals and referrers openly, and consider listing the names of those who have referred you in your newsletter or on a display board in your reception.
Hold events like “Business After 5” gatherings or parties for your best referrers. What you need to do is convey the expectation that referrals are the norm and is part of the deal for being your customer or client.
3. Recognising referrals
Recognising referrals is the easiest part of your system, and it never ceases to amaze me how poor business owners are at recognising referrals. I find a handwritten note is best rather than a template letter or email. Alternatively, you can just pick up the telephone, whatever works best — what matters is that you show you are grateful of the referral made.
4. Rewarding referrals
Recognition for referrals is a reward of sorts, but you need to go further. It’s the oldest strategy in the world — remember “Give and Ye Shall Receive” (Luke Chapter 6 Verse 38)?
“Giving” means thinking of ways to help your customers and clients in their business — like referring business to them, introducing them to useful people, lending them a good business book or giving them some business or marketing tips.
It also involves giving them a modest personalised gift (like a good wine or flowers) or maybe taking them out to lunch. Your referral gift should be commensurate with the referral made — not too small to be miserly or too big to been seen as a bribe. Take the time to find out the personal tastes of the referrer, and then record the information in your system for next time.
We love referrals!
You should be getting in excess of 70%-80% of your new business from referrals. If you’re not getting loads of referrals, it’s a sure sign you need to make some changes in your business.
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