Firing Up the Referral Engine
By Karl Robinson
You’ve invested monumental amounts of time, effort, and resources to create a legion of happy customers. You bend over backwards to please them. You help solve their problems. You provide a quality product. You deliver above-par customer service. A little reciprocation is not unreasonable to expect. In fact, most happy customers would be delighted to provide referrals if you would just show them how!
A Referred Prospect is a Superior Prospect
A referred prospect is superior to a prospect acquired in any other fashion:
¨ They convert to sales at a higher rate
¨ Their transaction sizes are larger
¨ They are less price resistant
¨ They are less likely to shop you around
¨ They are more likely to also refer others
Much of your new business may already come from referrals and “Word-of-Mouth” advertising. Don’t let this lead you to think you don’t need to focus on this area! These naturally occurring referrals represent only a small, erratic percentage of the possible referral activity in play. Without a diligent, systematic, company-wide referral facilitation program you are missing out on a tremendous growth opportunity.
6 Ways You Can Start Increasing Referrals Immediately:
1. Of course, you must get your house in order first. The best referral program in the world isn’t going to work if your products are shoddy, your employees are surly, or your service is unreliable. Walt Disney said it best: “Do what you do so well that people can’t help but tell others about you.”
2. Educate your customers about your referral program. Let them know that referrals aren’t just encouraged, but expected. They’re part of your business’s culture. This can be done quite graciously with a little creativity.
3. Make it easy for your customers to refer by providing them with valuable, relevant information they can give out. Referral cards are okay, but even better is some sort of informational product. A report titled “10 Things You Should Know Before Hiring a Personal Injury Attorney”, a booklet of healthy recipes for a health food store, “How Karate Benefits Your Children” for the karate instructor. You get the idea.
4. A company newsletter is a good idea for many reasons, but it can be especially effective for encouraging referrals. Maintain a column that both welcomes new customers and recognizes the referrer. This also reinforces the fact that referrals are a normal, expected practice by your customers.
5. Gift cards and other rewards (bribes) aren’t very effective. Instead, tie referrals to a charity. For every referred customer, a donation is made from the proceeds to a local charity. This has been proven to have much more impact.
6. Reward referrers with a special VIP event. Remind them of it throughout the year in your newsletter and other communications. Only referrers get invited! And guess what? You ask them to bring a guest which turns it into a tremendous networking and marketing event as well! Everybody wins here.
Dramatic growth through referrals doesn’t happen with a few random requests from customers. It takes a plan, appropriate materials, employee training, and strict enforcement.