A business referral is an act of introducing a new prospect to your business by someone in your network. This may happen spontaneously during organic conversation or as a result of conscious referral marketing efforts. Business referrals’ impact is big and can help grow your business. It starts with providing your customers or clients exceptional customer experience. That way they feel motivated to share their experience with the people they know.
According to Nielsen, 92% of consumers trust referrals from people they know. Hearing positive things about a service has a significant impact on their decision. Referred customers are also more loyal and have a 16% higher lifetime value. By encouraging referrals from other customers, you can get more high-quality customers.
Referral relationships are some of the most profitable and secure in any business. To acquire these connections, your business must have something of substantial value to offer. We’ve outlined effective steps for creating referral system and suggestions for putting it into practice.
Identify your advocates, promoters and loyal supporters
Referrers are people who know your company and already think highly of it. Referrers can be existing clients, vendors, complimentary service providers or business friends. The first step to asking for a client referral is to identify those most likely to have something to say. Satisfied clients will likely know other people with the same needs who will benefit from what you have to offer. Therefore, targeting the right people is essential for the success of your referral system.
Nurture client relationships
All successful relationships require time, energy and effort investment. Hence, in order to gain referrals, you have to develop solid and successful relationships with your clients. Discover your customer’s needs and wants to get the idea of what it is going to take to satisfy them. Certain customers may require to show you can deliver with consistency before they will consider offering anything in return.
As a result, this will develop into an investment that offers the long-term return you’re looking for. Furthermore, continue investing in each business relationship, keeping them engaged with your brand. This can be done by:
- Staying in touch post-sale and nurturing the relationship into a long-term connection.
- Continuing to provide value, whether it’s through additional offerings, helpful and informative content, or semi-frequent check-ins.
- Providing an ongoing community or sharing a set of values (such as an altruistic cause).
Deliver quality work
High quality work, service and effort are critical when securing referrals. Quality work isn’t just centered around the service you sell, but also through the appreciation you show to your clients. You can show your appreciation through flexibility in scheduling times or being more relaxed with allocated time. It is your job to deliver what you say you will deliver and to answer all client questions. Therefore, work hard to cultivate a strong reputation by delivering, adding value and providing a friendly service. As a result, referrals will come naturally to you.
Become an expert in your field
Being an expert in your field of work is imperative to the customers who are going to count on you. Expertise is best established through your continued education and experience. Once you develop expertise and gain necessary experience, your reputation will speak for you. This is when you can create a niche that is uniquely yours. Another important part of being an expert is to be a good listener. When new clients feel their needs and core values are truly understood, they are more likely to refer you to others.
Provide exceptional customer service
As seen above, it’s important to deliver consistent, high-quality work. Moreover, it is equally important to be willing to hear, give and receive feedback with the clientele you work with. As a result, it will be easier to develop mutually beneficial relationships. If you have clients who see the value in what you do, they’ll refer people your way.
If you display excellent customer service skills, you can create your own web of industry knowledge transfer. For a start, share your knowledge with others so they can learn from you. In return, you can also learn from them. Furthermore, express genuinely care about your clients. Make your goal to secure an enduring, productive and lucrative relationship.
Strive for sincerity and transparency
An important element to any beneficial healthy relationship is respect. To develop a broad referral base, you must treat others the way you would like to be treated. The purpose is to create a long-term relationship with your client base by always being ethical. In other words- sincerity and transparency are the highest form of respect. When you are honest in your intentions, it builds the credibility of who you are. Therefore, provide your customers with high quality, timely, thorough, consistent and ongoing communication. The truth is- when people feel cared for and respected, referrals are nearly guaranteed.
Choose the right time
Avoid asking for referrals at the end of a job, when sending the invoice. This may not be the most opportune time to ask for a referral because clients are focused on settling debts. Instead, experiment asking for referrals at other times. Look for opportunities where a client is particularly pleased with the work you’ve done. Perhaps after you hand in the first stage of a multi-stage project or before the second project.
Partner up with other service providers
Approach other companies who offer complimentary services about combining forces for a referral program. To give a partnership the best chance of success, offer referral clients a discounted package on both services. Sell your package as a way for prospects to fulfill all their needs in one place. Create unique collateral outlining the package and share it to your current clients to see if they know anyone who want. In addition, set up a ‘Recommendations’ page on your respective website outlining different partners and the complementary services they offer.
Offer unique content
Present your referring clients with content they can share with their customers or business networks. Sharing free content gives you a reason to contact referrers on a regular basis. Moreover, it helps you to build authority and trust with potential prospects before they’ve been officially referred. For example, try:
- Inviting referrers and prospects to a free seminar or webinar on a topic of interest
- Writing a whitepaper about an important industry trend
- A blog post about how businesses can deal with recent regulatory changes
- A Facebook live link for a Q&A session targeted to new businesses
Create different avenues for advocacy
Some clients feel uncomfortable giving referrals. It could be due to the previous bad experience. If a client says they don’t give referrals, respect their decision. However, consider reaching out to them after some time with a different offer to advocate for your company. Try asking them to:
- Participate in a case study by interviewing them about their success for your website. You can create a written testimonial or even a short video.
- Review your services online. 92% of customers read online reviews, and they’re vitally important in the decision-making process. Getting positive reviews on trusted websites is a great way to improve trust.
- Fill out a survey and share how they discovered your company and what services they need. In addition, to share other ideas for improving your service offerings.
These lower-effort actions will still drive potential new leads to your company and won’t risk your relationship with your customer. Ask them what they would be comfortable sharing and consider placing their positive feedback on your website or social channels.
Add a customer loyalty program
Your most loyal customers are probably going to be the ones who refer your company the most. Acknowledge these groups by creating a customer loyalty program that rewards them for advocating on your business’ behalf. This system could be point-based or it could even be a premium membership. It could also extend beyond just customer referrals as well. No matter how you do it, make sure your customers feel valued and inspired to become loyal. In turn, loyal customers will give you free referrals through word-of-mouth marketing to their family, friends and even strangers online.
Offer a reward program
If you want to make sure your customers search their networks for a good referral, offer them something valuable in return. Whether it’s a gift card or free month’s subscription, give something back to your customers for connecting you with warm leads. For example- 30 days free or 3 months of discounted pricing.
If your client gets something out of the arrangement, they will make an effort. In the B2C marketplace, referrals often give clients discounts, free swag, vouchers or items to collect. Rewards are also an excellent way to show gratitude to returning clients who give referrals. Choose a reward that fits your values and gives your clients something of value that they’ll enjoy striving towards.
Align with your customers' values
Do your research to learn about what your customers truly value before asking them for a referral. Then, you can align your incentive or acknowledgment with those values. Finally, you’ll be able to give them an idea of the impact they’ll have with a referral.
For example, if you know they’re personally or professionally invested in advocacy for a cause, reward them for referrals with a donation in their name. Simple gestures like this can go a long way toward proving to customers that your relationship is a partnership, not just a business transaction. When your customers know that you share the same values and interests as them, they’re more likely to want to submit a referral.
Distribute your content and resources across different channels
Research your clients and identify the channels that they spend time in. By doing this, you can increase the likelihood of getting a response if you approach them where they already are. For example, you wouldn’t want to send a LinkedIn message to a satisfied customer if they rarely use the platform.
According to researches, 47% of buyers view three to five pieces of content before engaging with your brand. This means that before your existing leads closed into customers, they were exploring your existing resources.
Therefore, it’s important to strategically distribute your content to ensure it reaches qualified prospects. For example, adding ‘Share This With a Friend’ link to your automated offer emails could help you achieve just that. In short- make it easy for your customers to pass along your resources to their qualified connections.
Personalize the request
When you ask for a referral, personalize the request to the client by explaining why you’re seeking it specifically from them. Use their name in the request you send out as a means of generating a connection. Let them know that you’re reaching out to them specifically and that you’re aware of their experience with your business.
Get specific with your ask
When you ask for a referral, be specific about it. Make sure that the customer knows exactly what you’re asking of them so they can give you what you’re looking for. Otherwise, customers may not know who to ask or what type of person you’re looking for. In that case, you will have to spend more time verifying a prospect after a referral has been submitted.
Join meetup groups
Online resources such as LinkedIn, Facebook and the NextDoor app help familiarize others with our face, name and the service we offer. Meetup groups and networking groups are also excellent resources to get us in front of people. These types of networking groups are sometimes the places you meet and create your more enduring connections. In addition, be prepared to ask how you can refer business to others as well.
Appreciate your employees
In order for you to have a good connection with your customers, clients, or partners, it is important to have a good relationship with your employees first. Treat your employees well for they will provide great customer service leading to customers having the positive experience. If your employees are content and appreciated, they will be more productive and involved in the business. If you give importance to your employees, they’ll give importance to your customers.
Express your gratitude
Referrals given by your customers or referral marketing helps you reach your business goals. For this reason, be grateful and appreciative of every referral you get. Moreover, show your appreciation so that you have an edge over other companies. For example, send a thank you card or invite a referrer for a dinner to thank him/her personally. Especially if his/her referrals have added a lot of value to your business that led to high revenues.
Always remember that it is very important to thank and express gratitude to those people who referred your business to other potential customers. Because of them, you have been given a great opportunity to grow your business. The customer is doing you a big favor, and you should be grateful for it and let them know that you’re grateful. Consider offering incentives, as mentioned above along with continuing to provide the exceptional service that satisfied them in the first place.
Showcase your best sources of referral
Use those who are clearly delighted with your business and regularly refer business your way as case studies. Ask for permission to feature them on your website, in your marketing materials and even in your advertising.
Give referrals to others
Probably the best way to boost referrals is to make a habit of referring business to others. The act of recommending another business to a friend or colleague can lead to lots of new business. You can join such a group to tap into an established process for generating referrals. Or you can start your independent campaign to regularly refer customers, friends, family and colleagues to other businesses.
Developing the right strategy for referrals leads to a solid business that is continuously growing. The best course of action is to determine your business needs, your current goals and how you want to achieve those goals. Afterwards, identify the customers most qualified to give referrals. Take some time to analyze if you’re targeting the right group of people or the right network.
Before you can develop the right strategy to get valuable business referrals, focus towards maintaining connections with the right people from different companies. This group of people will act as advocates for your company or even more. Once you have the right network, you can maximize your referral strategy.
Finally, in order to leverage your referral system, it’s critical to track your referrals and analyze key metrics. Incorporating these elements into your marketing strategy will result in effective referral system that drives business and makes you more profitable.