As business owners, we enjoy doing what we do – after all, why would we set up in business at all if we didn’t? But what we don’t enjoy as much is the constant chasing after the next customer – the time, effort and money we put into advertising and marketing with no guarantee that it will grow our sales. Wouldn’t it be great if new customers could see for themselves the value in what we do and come to us, rather than us having to go looking for them?
What if our existing customers were so happy with our products or services that they went out of their way to tell the people they know how great we are and that they should give us a call right away? Then the only marketing investment would need would be in getting referrals and in effect, your existing customers would be your sales team!
I am not suggesting that a referral strategy should be your only strategy for bringing in new customers, especially if you have high growth plans, but for some businesses it could be a far more effective strategy than it currently is. And the great thing about a referral strategy is that it is a relatively low-cost way of buying new customers.
The first step for a referrals strategy to turn your customers into “Raving Fans”. Nobody is going to refer you if your service is just satisfactory – you only get raving fans when you go beyond satisfied customers. Think about what you can do that will make their experience with you memorable – perhaps a small gift, a card on their birthday, or perhaps just the fact that your staff are so friendly and helpful that they make the buying process a pleasure. (Jeffery Gitomer wrote a book entitled “Customer Satisfaction is Worthless, Customer Loyalty is Priceless”, which is a great introduction on how to do this in your business.)
The next step is finding out who your loyal customers are, so make sure you have a good record-keeping system for your customers’ contact details and then categorise them. We recommend the ABC system – Awesome, Basic, Can’t Deal with. Then spend more time with the A’s and B’s than you do with the C’s. In fact why not get rid of these entirely?
If you are not really sure who your ABC clients are then one way to find out is to ask them. There are two simple ways to do this.
1. Customer surveys – write to them and ask them some questions and then rate the responses.
2. Testimonials – ask them to write you a testimonial and find out what they really think of you.
Now you know who your raving fans are, make sure that you keep in contact with them on a regular basis. It is a fact that the average business spends five times as much on buying new customers as it does on keeping old customers coming back, which is crazy. So put some of your marketing budget towards keeping in contact and building loyalty with your existing clients, even when they are not buying. A simple method for this is to send out a quarterly newsletter, giving details of special offers or new products.
With all of this in place, it is easy to make the next step and actually physically ask for a referral, and this is where many business owners fall down, because they feel awkward or self conscious. But why should you? You aren’t asking for something you don’t deserve – you’re just asking for the opportunity to allow more customers to benefit from your great customer service. You need to choose your moment, and then you just have to be brave and do it!
However, even then some people find it difficult, so if this is the case use some props or tools to help you. Why not put a referral card in with the purchase, and ask your customer to fill it in later, or get them to invite people to a free event so they can sample your product/service without risk, or give them an information pack to pass on to people they know who might be interested, or even a special offer voucher so there is a real Win Win.
The final points to cover are when you do get a referral, thank the referrer in a way that will ensure that they like it so much they will do it again and again, and whatever you do, systemise it so that it happens automatically and can be easily delegated to somebody else.
The last thing to remember when asking for referrals is, your success will be defined by your attitude. Think about who you really want as your clients, be genuine and honest, give to receive and be grateful when you get it; if you are, you’ll get the referrals you want. So go out there, take ACTION and grow your business by word of mouth!
