Rake in New Clients with 3 Compelling Referral Strats
In business, referrals really can’t be underestimated. For small businesses in particular, referrals are a major source of leads. Heinz Marketing once reported that 40% of leads were obtained via an official referral program. Wow! It also reported that among businesses with referral programs, 70% at least met their sales goals within a given period—and plenty exceeded those expectations.
Why do referrals work so well? When someone you trust recommends a product to you, they are putting their reputation on the line. Unless that trusted individual works for the company in some capacity, they have nothing to gain financially by referring its products. In fact, they stand to lose some reputation with you if their recommendation falls short of your expectations. Why, then, would someone ever do this?
Well, the intuitive answer is probably also the correct one: They would only do it if the product is good!
The referrer must be pretty confident if they’re willing to recommend some product to you, which implies they had a good customer experience indeed. Referrals can really make or break a business, so you don’t want your business reviewed negatively from one friend to another.
Here are 3 ways to generate referrals—the cheapest, most effective advertising you can imagine.
#1 Client Satisfaction
After you deliver on your promises to a client or customer by creating a fulfilling and helpful transaction, you want to follow up to see that they’re satisfied with the outcome. If not, it’s really important to get feedback that you can use to improve your business. Of course, that feedback should only be taken seriously if it is consistent with how you envision running your business. But if it is, consider that feedback a currency in itself. You might even try rectifying the problem if that customer was dissatisfied. If you can do this successfully, that right there can get you a good strong referral.
#2 Ask for It (Duh!)
Sometimes, the straightforward way is simply the best way. Like your mother always said, the squeaky wheel gets the grease! If you want something, asking for it is not the worst way on earth to get it. You might not feel comfortable asking for a referral, however, or maybe you simply worry about getting negative feedback of some kind. Some might even view it as pushy, but chances are that if the client does find it pushy, they probably weren’t overly satisfied with your service to begin with.
Imagine, on the other hand, receiving stellar service or an amazing product – wouldn’t you be happy to oblige the seller with a referral or two? It can be easy to forget, so a little reminder can be just the thing to get a client or customer to refer you to some of their connections. Even a single referral can blossom into many, many new leads.
In fact, before you even begin servicing a customer or client, you need to let them know what a big deal referrals are. Tell them upfront that you mean to work for that referral, and that you will follow up with the customer after the transaction is completed.
#3 Offer Incentives
A formal referral program asks customers to share something with their community or provide contact info for someone who might be interested in what you offer. Make sure you tell your customers how you’ll use the info they’re giving you, and how you will follow up with anyone whom they refer.
Make it easy and natural for a customer to refer friends & family with referral cards or similar online form. And most importantly, offer incentive! Give them a bonus for referring someone, and maybe even a bigger bonus for referring someone who converts. This can effectively incentivize people not only to refer a second person but to speak more highly of you in the interest of getting that conversion bonus.
You can also help this along by offering a bonus to the person who’s actually being referred! Then everybody wins. Even if one customer says to another, “Just sign up for this thing so we can both get the bonus,” you’re at least getting your foot in the door of the new customer.