Raise profits through referrals
Why seek referrals? Establishing a systemised process for obtaining referrals is one of the most cost effective ways of acquiring new, qualified customers for your product or service......
Why seek referrals?
Establishing a systemised process for obtaining referrals is one of the most cost effective ways of acquiring new, qualified customers for your product or service. In essence, you’re asking your current database contacts for introductions. It should come across as a natural, easy exchange, that your database contacts get enthusiastic about.
Obtaining referrals can play a large part in building rapport and strengthening your relationship with your clients, because it plays on people's natural willingness to help people they like.
Why are some referral programs unsuccessful?
The main reason why most referral programs are unsuccessful is that the perceived benefit to the customer is not high enough. Monetary incentives are generally successful, if the ‘price is right’ and the referral program is executed in a way which ‘nurtures’ current clients – however, both these elements need to be spot on, otherwise your clients won’t be motivated to refer their friends.
When offering monetary incentives for referrals, be aware that your offer has to be attractive enough to your market, such that they’ll WANT to make the effort to think of and refer suitable people to you. What’s more, while monetary incentives can be a strong motivator for certain markets, you should also be aware that your offers will be more effective when you have previously made an effort to build and sustain a strong relationship with your clients. That way they’ll be motivated by a desire to help you because they like you, as well as being motivated by a potential for financial gain.
Hence, the kind of combined approach you should adopt will include; developing a strong relationship with clients, offering an incentive of high perceived value and creating several touch points to ask for referrals and then reminding customers on an ongoing basis about your referral program. Read on for more information on how to create a program that encompasses these three elements.
3 Keys to Attracting More Referrals
1. Become more ‘attractive’ to your customers.
Before anyone wants to sing your praises to their friends, they need to have an incredible experience when doing business with you. That means your customer service and/or the results you deliver must be outstanding. Hence, it’s critical that you create an environment where candidates want to refer to you.
Creating that environment is about going above and beyond the call of duty, to deliver a service that literally makes candidates think “WOW!” when they experience it. It’s not just about offering good service, delivering on time or doing everything that you say it will do. It’s about offering MORE than is expected.
That means looking at:
- The way in which you answer the phone
- The appearance of your premises
- The ‘can do’ attitude of your team
- The professionalism of your service
- The quality of your job vacancies
- Your turnaround times
Developing a strong relationship with your clients by going above and beyond in each of these areas will go a long way towards obtaining ‘preferred supplier’ status in their eyes. When a customer has (and continues to have) a ‘wow’ experience with you, YOU will be the business they refer their friend/family member/colleague to when they mention they have a need for the particular product or service you provide.
2. Give customers an enticing incentive for referring their friends
Firstly if you do go down the path of financial incentives, you need to make sure you have the most attractive referral program in your industry. Research what your competitors are offering in the way of rewards and make sure you can top it. If you can’t beat someone in the financial incentive stakes, what ELSE can you offer that will make a customer view referring their friends/family to your business more favourably?
3. Utilise different mechanisms for referral
Once you make yourself attractive to customers and give them an enticing reason to refer other clients to you, there are many mechanisms for referral you can utilise. These can include:
- Making your e-newsletters so interesting and value-packed that customers will forward it on to friends/associates – thereby increasing your brand awareness and increasing the chance of generating interest from new clients.
- Actively ask for referrals (see next section for more).
- Arrange for a friend to receive a free product sample/consultation/appraisal (give all new clients an e-voucher they can forward to friends/associates). If your business is a service provider, you might be able to offer an obligation free phone consultation (or similar) to potential customers, which assesses their needs and helps them solve their problem by explaining the benefits of your service.
- ‘Forward to a Friend’ - Create the option for all stories in your newsletter and on your website to be forwarded, along with a standard email message, “I was looking at this and thought you’d be interested.”
How to actively ask for referrals
As mentioned above, actively asking is a fundamental and often overlooked way to generate referrals. You see, most of the time, it doesn’t occur to your clients to refer their friends and if you don’t ask, you’re missing out on thousands of opportunities a year to acquire new customers for your database.
The best time to ask for referrals is just after you’ve made a sale or provided a service. This is the time when they are most excited about your company. This could be as simple and straightforward as an automated email to all customers advising them of the various reward programs you offer within your referral system, or a more personalised option of a phone call, followed by a letter.
The letter or email might ask your customer whether they have an extensive network you could help by providing the superior product/service you offer? Make the offer compelling and remember to keep your referral program top of mind with customers by mentioning it each time you make follow-up calls.
When making a phone call to customers to ask for referrals, you might say during the course of the conversation, “I’m looking for more customers just like you!” You might go on to say something like, “Obviously there’s only one you - But you’re a great client and we’d really like to help other people like you, people like your friends and family, people who would benefit from the kind of service we offer. Who do you know…” Describe your client’s characteristics, and traits. For example - “..who is the type of person that appreciates the kind of one-on-one, tailored service we offer?” “Basically, who do you know… who’s like you?” This will start a conversation where you can jot down names, numbers and emails of people your client refers.
At this point you should also ask your customer for the best way to contact the people they have referred. Mention that you’ll contact them with an offer that will help them, such as the free phone consultation/assessment.
Referrals are just one way you can significantly grow your client base – for more idea starters or guidance on how you can build your database of qualified contacts, call us now on 9751 3277.
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