A large majority of business owners and managers that I speak to tell me that referrals or word-of-mouth promotions, account for a significant percentage of their new business enquiries. However, many business owners do not have a formalised, ongoing referral-generating procedure in place. In many instances, business owners feel that they are being too pushy or are too embarrassed to ask for the referral.
As a result, their referral generating procedure is ad hoc, uncompelling and subsequently, not maximised to its full potential. Simply asking “please give me the name of someone who you think will be interested in my service” just doesn”t ”cut the mustard” when it comes to generating referrals.
Unfortunately, however, this is the extent of referral promotions for many companies. It is important to remember that you are a typical consumer – people ”out there” in the marketplace behave, react to promotions and consume in a similar manner to you.
Think about the last time that a company asked you for a referral:
- Were you delighted with the quality of the service and the performance of the product?
- Were you rewarded for taking the time and trouble to give the referral?
- Was the person you referred given special treatment or an added value offer that they truly appreciated?
If you answered ”yes” to these three questions, then most likely you were happy to refer your friends, family, associates or colleagues, and they in turn, were happy to be referred by you.
The Secret to Generating Referrals and Maximising Conversion
- It is essential that you build a current database of clients with whom you have a positive, ongoing relationship.
- Your clients must have total confidence in the integrity and performance of your product or service and your company as a whole.
- Your referral offer should add value and reward either (or preferably both) your client and their referral in some manner that is both special and memorable.
- You must have a formalised follow-up procedure and sales offer in place in order to capitalise upon the conversion results.
- Your referral program must be ongoing and systematised. You may choose to run quarterly or annual ”occasion-based” referral promotions (such as Christmas, Birthday, End of Financial Year promotions).
- You must have a ”back-end” to the business. Simply generating and churning through new customers on the ”front-end”, without concen-trating on customer loyalty, retention and repeat business, will not grow your business in the long-term. (More on loyalty and the lifetime value of your customer in the next edition of ”The Networker”.)
- Finally, you must continue to track the results and ”freshen” the campaign if and when the response and conversion results slacken.
Here are a couple of examples of referral promotions that have worked well for my clients in the past, just to give you some ideas:
- The Christmas Gift Referral Promotion A publishing client sold a subscription product of a series of monthly business reports. As part of a Christmas Referral Promotion, they offered to send out three free reports as a Christmas gift to a limited number of their current subscribers” referrals. The gifts were sent with a personalised Christmas card on behalf of the client and the company.
- The Closed-Door Sale Another client opened his specialty retail store after hours to ”priority” customers and their guests to reward his clients for their support. This special ”Sale” offered discounted merchandise and was closed to the general public.
- I hope this helps you get your business growing through referrals! Just remember…be original, be creative – and inject some personality into your promotions. You”ll be amazed at the response from your customers when you do.