Referrals are a great method of prospecting but most businesses do not have a plan to maximize their referrals. They just let them happen in a random fashion. But why leave it to chance?
The benefits of referrals are that your closing ratios are much higher when someone has recommended you. The referrer is giving you credibility which increases trust. We define marketing as getting someone to know, like and trust you so you can’t beat a good referral.
Of course asking for referrals can seem a scary proposition. There is the fear of rejection and few people have an elegant way to ask for referrals. Here are some best practices and some ideas:
Referral Best Practices:
– Ask for referrals during the “honeymoon” phase. That is the period of time just after you have delivered something of value. The customer is particularly pleased at this time. Later, no matter how well you do, you will never seem quite so good again!
– Make referrals an expectation – for example — “would you like the normal price or the referral price?”
– Educate your sources — if they don’t know who your ideal customer is or how you will handle the referral, they will be less likely to refer qualified prospects
– Make it easy — e.g. a coupon or printed materials
– Follow-up and make sure the referrer knows what is going on
– Reward your sources. This may be a formal commission or a small thank you. Note that some professions have rules about this so check first
Some Referral Examples:
– The dentist who baked cookies and gave a batch to each of his patients. They talked up his service and sent referrals
– The shoe shine guy who gave his customers 5 coupons. Has asked them to give them to their friends and when the coupons were redeemed he would discount their next shoe shine according to the number of coupons that came back. If all five were redeemed, the next shoe shine would be free
– Contests are perennially popular — the trainer who offered a contest for the person who brought the most referrals in a 12 month period won a trip to Hawaii
Jeff Schneider (Sandler Sales Training), Bill Dolan (Spirit Media) and myself will be speaking on Referrals on March 6th at the Portland Business Alliance. I will also be offering a four week Duct Tape Marketing “Referral Flood” Power Group shortly afterwards. Check out my Ignite Your Referral Engine page for more information.