One of the most frequently asked questions I get as a sales coach is: how can I generate leads? What’s new? What is working? Is this the most effective approach? While there are multiple ways to generate leads, one of the best is leveraging current customers.
Asking for referrals from your current clients/customers should absolutely be something you are doing. Still, having an organized referral system is the key to generating quality leads from those referrals.
Building the right referral system will ensure you will not waste your time and effort flippantly asking your customers to send people your way.
Why You Should Have A Referral System
We can all understand the value of a happy customer presenting you with a potential new customer. Here are a few points to remember as you take the time to develop a referral system.
A basic plan is all you need. You can start by offering simple but rewarding benefits, gradually increasing the incentives as your program grows.
With so many ads and paid promotions, it can sometimes be difficult for consumers to trust what businesses sell. Having a family member, friend, or respected colleague recommend a service or product will always be much more well-received. Not only are they more likely to trust YOU, but you can trust that they are more apt to become a loyal client or customer than someone randomly clicking an ad.
By participating in your referral program, your customers are putting themselves in a position where they feel more valued. Offering special perks and benefits to those who refer more businesses creates a feeling of exclusivity for them and develops a loyal following for you!
Building The Ultimate Referral System
When developing a referral system, you need to keep certain things in mind: Does this program bring value to my customers? Is that value enough to motivate them to reach potential new customers? Does this program ultimately result in an increased ROI?
Let’s get started…
1. Come Up With Desirable Perks and Benefits
Many businesses, especially startups, often avoid offering rewards for referrals for fear of the negative effects it could have on their bottom line. However, while it may cost more upfront, the generated lead could pay it multiple times.
Rewarding both sides is crucial to ensuring a successful referral system. The concept is simple. You ask your customers to refer as many people as possible. For every successful referral, they get a special benefit or reward. Some examples include discounts, gift cards, or even free products or services. A perk should also be offered to the referred customer to give them that extra push to purchase your products or services.
Whatever you decide to offer, be sure you’ve outlined specific terms to avoid abuse of the program. How many times can someone claim a perk? Is it the same perk for every referral, or will the benefits increase with the volume of successful referrals? How long will the incentive be active? These are just a few examples – try to be as detailed as possible and cover every base.
Once you begin offering these benefits, you will see an improvement in your customer acquisition costs. Even though you offer discounts or free products for that initial relationship, you are getting that product in front of people who may not have seen it otherwise. You have acquired free advertising through walking, talking, and advocates of your product or service!
2. Create a Referral Form
Before announcing your referral program, create a form or sign-up page to collect your customers’ and referral information. Although this may seem like a menial task, a referral system will fail if you don’t properly track the referrals and where they came from.
Your form should require your client’s name, company name, primary contact number, secondary contact number, email address, preferred method of contact, and secondary email address (so they can include an assistant if they’d like). Don’t forget the referral fields allowing them to enter the name and contact details of the referred person! Feel free to include other fields, but be selective with the fields you mark *required. You want to get the basic details without making people feel like they must divulge their personal information!
Work with your website developer to ensure your form will accept only new contacts, to avoid duplicate referrals, and that they will be properly tracked in your customer relationship management (CRM) system.
3. Ask Your Customers For Referrals
When asking for referrals, make it personal while remaining professional.
Start by asking your most loyal customers or those with whom you already have established a good relationship. They will be happy to refer you to some friends and family and receive some perks for their efforts.
Send a friendly email explaining your new program. Give a quick call to chat about their satisfaction with your services and if they think they also know anyone who could benefit from them. Include a note on your invoices thanking them and encouraging them to share your services for a special perk. Regardless of your communication channel, do not forget to express your appreciation for their business and loyalty. Send them a thank you card or email for every referral they make – successful or otherwise. This will encourage them to continue sending referrals in the future, even beyond their perk “allowance.”
If your more direct methods make some customers uncomfortable, there are more subtle ways to collect referrals. You can try including an option to refer a customer at the end of review or feedback requests; You can ask them to participate in case studies or client testimonial interviews. These are gentle but effective ways to request recommendations without flat-out asking for a list of potential customers.
Ready To Start A Referral System?
Now that you know the power of an effective referral system, it’s time to implement one. I will help you discover the long-term advantage of perfecting your referral approach and ultimately increase your bottom line!