Whether you work in a service or product-based industry, referrals can be a powerful profit driver.
For starters, you’re in control – no relying on weird algorithms (ahem, Facebook) or losing sleep over the next Google update.
Referrals can improve your prospect pool so your sales cycle is shorter and your marketing budget lower.
And they come with trust built in. Someone who they already trust has recommended you as a person to trust. So while you may spend hours, weeks, months and even years building relationships, authority and trust to earn new customers on your own, a referral can turn a prospect into a customer almost instantly.
Since they’re coming through a source they trust, chances are they’ve already asked a dozen questions and have been pre-sold so there’s a lot less overhead when it comes to breaking down someone’s natural resistance to the unknown.
Referrals are also pre-qualified. It’s more likely that they’re actively seeking out the type of service you provide so you don’t have to cross the hurdle of convincing people of why they need what you’re offering.
Here’s the bottom line: you want them!
That’s all well and good, but where do you find these elusive animals? How can you snare a good referral? The good news is that you don’t have to merely wait around for them to peek out from under the bushes. You can lure them in and grab a few if you think smart and act purposefully. Here’s how.
Network With Feeling, Like You Mean It
My web development and marketing business is almost 100% referral-based and has been for 14 years. Long before “online marketing” became a thing and probably long after it’s dead, real-life marketing has existed and has been keeping businesses alive and thriving.
But that doesn’t mean we sit around and wait for people to show up at our doorstep.
It also doesn’t mean we show up to a business card exchange and start hammering away at people about what we do.
If you want to network effectively, you have to treat it as you do the rest of your marketing.
First you need to identity your target audience. The best networking groups are people who fit not only your customer profile but who share your business values and ethics.
The goal of a good networking group should be to help each other. That means you’re responsible for providing referrals to others in your group and to do that you need to be sure they’re people you can trust and stand behind.
This is more than a simple “you refer me and I’ll refer you” model. It’s about building relationships (isn’t everything!) so that you know there’s a group of people out there who have your back. And when someone needs your service, those people are going to recommend you – confidently.
Work? Yes. But consider it an investment in a built-in sales team. Better yet, these are your default advocates – the people that get your prospects to trust you before you ever meet them.
If you can’t find a group that exists then create your own. I bet you have at least one or two people you’d be happy to bring business to. And those people probably have one or two each… and so on. Meet with your group regularly, be informed about their businesses, accept only the best and be sure to give – it’s the only real way to receive.
Give Referrals Unexpectedly
You don’t need to be part of a networking group to send referrals to other businesses that you admire or enjoy.
We’re pretty quick to complain when something goes wrong (think: Twitter wars, snarky Facebook comments and angry emails) but how often do we share the love for a job well done?
It’s great to compliment someone and tell them they’ve done a great job for you – it’s a bigger compliment to send some business their way.
Adopt a mindset that when you work with someone exemplary, you will consciously be aware of opportunities that you can send to them.
When someone sees that you are actively advocating for them, all those feel-good endorphins kick in and it makes people more likely to advocate for you. Which leads to my next point because you must…
If you want people to refer business your way, you must achieve excellence. That means reliable service and fixing problems when they arise. It means worthy products. It means standing behind your business practices and working with integrity.
Nobody wants to be known as “that guy who sent me to a horrible company” (or even just an “ok” one). You can network all you want, send boatloads of business to other people and see zero return if those people don’t trust you enough to send their friends and colleagues your way.
In a perfect example of excellence in action, a friend of mine who had been following the launch of a new product with mild interest was impressed by a fantastic email that she’d received from the company. It was a combination apology (for a delay in the launch of the product), a bit of humor, some helpful information and a “here’s how we’ll fix this mess” conclusion.
It impressed her enough that she decided to buy their product. And she shared the experience with me and her enthusiasm intrigued me so I checked them out – and bought their product!
So a single awesome email netted one new customer and an instant referral.
Proof positive – people will recommend your company if they find you worth recommending, so be worth it.
Hit Up Old Customers
If you’ve been working with someone forever and you’ve never asked for a referral then it’s time to get busy.
Presumably someone that sticks with you does so because you’ve built trust and loyalty. But as much as your customers may love you, that doesn’t mean they’re thinking about you 24 hours a day. Or ever, unless they need something.
We’re all busy. The cat has to go to the vet, the car died, we’re counting the days until vacation, our husbands just yelled at us, the chicken burned and that job that was due two weeks ago is still not done and going very wrong. Who has the time or mental bandwidth to think about referring business to someone else??
Call your best customers and ask whether they know anyone who could use your services. Let them know specifically what you’re looking for and see if they can set up an introductory phone call or meeting.
We’ve found plenty of people who realized their wives were starting a business and needed marketing help or their retired dad wanted to turn a hobby into a new venture or one of their friends just got burned by another developer and needed someone they could trust.
It’s not entirely likely that these things will occur to people naturally so take a little time to ferret them out. Otherwise your customers’ dads and wives and friends will probably find someone else to hire and you’ll never be the wiser – or richer.
Get To Know The Competition
This point was inspired by Tea The Word Chef Silvestre who reminded me that cooperation – and not competition – is the key to some of the most successful ventures.
It might seem counter-intuitive to work with your competition but the alternative is constantly beating your head against them. Here’s a little-admitted truth: there’s plenty of work to go around. You couldn’t possibly do (or WANT to do) all of it. Your job is to find your perfect client and stick to your area of expertise.
So what happens when you find someone who isn’t quite the right fit for you? Or who can’t quite afford your level of “expert” pricing? Or someone who, perhaps, simply doesn’t fit into your busy schedule?
Well, you could overbook and overplay yourself and end up with unhappy people all around. Or you could refer that person to a trusted competitor. Client is happy. Competitor is happy. Good feelings abound and true networking and relationship-building is underway.
Tackle New Customers While They’re In The Honeymoon Phase
Nobody is happier than a newly-happy customer.
Your old customers are used to loving you and you’re kind of like their favorite old sweater – there are some holes but you’ll never get rid of it. Plus see comments above about people being busy.
But your new customers are newly impressed by your awesomeness and can be ripe for referrals – if you ask.
The second you close a job successfully, ask your thrilled customer if she knows anyone else who could benefit from the same type of personal service and dedication that you just gave her.
People in new-love may just go the extra mile to show their appreciation.
Bonus Tip: Beware Referral Incentives
I know people who have run referral incentive programs – you send a referral and you get a free Starbucks coffee or an entry into a sweepstakes or even a discount on your next purchase.
While this may seem like a good idea on the surface, it defeats the purpose of advocacy and capitalizing on all that trust.
You lose the benefit of pre-qualification because people are more likely to refer business to you for the perk rather than because someone is a good fit for your business.
No trust and no pre-qualification means you still have to go through all the phases of customer acquisition that you would have if you’d simply solicited the business yourself. At that point you’d be better off hiring someone to cold-call for you. It would be about as effective.
Plus it diminishes your credibility. If you have to effectively bribe someone to refer business your way, it means you’re missing out on the key elements that go into deserving that referral.
Work on your customer service, your products and your relationships. It’ll pay dividends every time.
Do you rely on referrals for your business? If not, why not?
This post is part of the monthly Word Carnival series of posts. This month, our carnies tackle the topic of business referrals, why you want them, how to get them and everything else you’ll need to know to propel your business forward! Check out more of the Word Carnival series here.