Both of these motivations are important but in the long run a business that focuses on making a referral in addition to a sale will be better positioned for long term success. A sale will help meet or exceed a goal and make budget which are rightfully important. But the bigger, perhaps more important, value would be additional customers or repeat business.
Asking for a referral to generate new business is not a new idea but it is one that we often overlook. We don’t seem to have a problem asking a friend, family member or co-worker for a referral when we need to hire a contractor or are looking for a new dentist. So, what is it that keeps us from asking our own customers for a referral? Companies are continuously looking for new ways to generate new business and yet it seems that one of the most fundamental avenues in which to construct this is right under our noses. In our private lives, when we have had a great experience with a company or a service, we are eager to share our experience. I believe professionally, our best customers would be willing to do the same.
Darrell Zahorsky from About.com offers “7 Sure-Fire Ways to Build Your Referral Business”
1. Set A Target: In business, measure the results to improve performance. Set a clear goal with a time line. Example, 10% increase in referral business over the next 10 weeks.
2. Timing: Conventional sales wisdom claims the best time to ask for the referral is immediately after the close. This tactic is far too aggressive. Give your clients time to experience your service or product before asking for a referral. Ask for the referral at close only if your client is already delighted with your business.
3. Top 20: Not all customers are referral candidates. Find the top 20% that are ecstatic about your business and ask them for referrals. Make sure their network is the type of client you want.
4. Give and You'll Receive: Give your clients extra service and follow-up support before asking for referrals. When you give willingly to your customers, they will return the favor.
5. Type of Customer: Inform your referring clients of the type of customers you can help. Provide a clear picture of the customer demographics will help your referral marketing.
6. Rewards Program: Provide special rewards to your referring customers on a regular basis. If a customer provides you with 5 sales, offer them something special, e.g. discounts.
7. Thank-You: Lisa A. Maini, President of my Marketing Manager, recommends businesses need to establish trust to build referrals. Lisa says, "Create a basic thank you letter that can be personalized and sent to each referral you receive. Treat your referral sources with the utmost of care and you will not only build a foundation of trust but keep hot prospects coming to your door."
A referral from your customers may be one of the best ways to generate new business. What’s stopping you from tapping into the resources you already have in place?