Jump to Main Content
USA flagAn Official Website of the United States Government
Industry Word

Blogs.Industry Word

Register

Referrals: The Fast and Easy Way to Market Your Business

Comment Count:
12

Comments welcome on this page. See Rules of Conduct.

Referrals: The Fast and Easy Way to Market Your Business

By Rieva Lesonsky, Guest Blogger
Published: August 20, 2013 Updated: August 20, 2013

If you’re like most busy small business owners, you’re always looking for fast and easy ways to market your business and get new customers. One of the fastest and easiest is right under your nose: Your existing, satisfied customers can be a great source of referrals to new business—provided you handle the referral process right.

“Process” is the key word here, because getting referrals haphazardly and contacting them without having a specific plan in mind can be just as bad as not getting them at all. Yes, it will take a little work on the front end to set up a referral process, but it will ultimately pay off in a continuous pipeline of qualified new business. Isn’t that every business owner’s dream?

Here’s a 6-step system for getting and maximizing referrals:

1. Ask for them. You won’t get if you don’t ask, so develop a system where you gather referrals at a set point in the sales process. Typically, you’ll want to do this after the sale is complete and you know the customer is satisfied. For a retailer, this might be at the point of purchase, or you might send a follow-up email asking for a referral. For a B2B company, the natural point would be during a follow-up call to make sure the service or product is working out OK. Build this into your sales process so that asking for referrals becomes as automatic to your employees, clerks and salespeople as, say, putting a receipt in the bag.

2. Get digital. Email and social media make it easier than ever to ask for a referral. You can put requests for referrals on your social media sites, ask for referrals as part of your email outreach, or create a contest for the customer who refers the most people or the referral that generates the most business.

3. Offer a reward. Speaking of contests, we’re all more motivated to do something if there’s a reward involved. When developing rewards for referrals, take into account the value of the referral. If you’re asking a shopper on your ecommerce cosmetics site to share a friend’s information as part of the checkout process, that’s pretty low-value. If, on the other hand, one of your top B2B clients has discussed your product or service with a business colleague, knows that he or she is interested in learning more (and controls a $100,000 budget), and provides you with that person’s name and email—well, that’s pretty high-value. Appropriate rewards could range from a dollar-off discount code, to a free product or service, to a percentage off the next invoice. (Rewards can escalate in value depending on whether the referred client actually makes a purchase.)

4. Keep it simple. People want to help you out, but not if it’s a huge hassle. Make referrals as easy as possible with tools like prepaid referral postcards customers can drop in the mail, referral forms enclosed with your invoice so they can mail it back with their payments, a form they can fill out while paying the bill at your restaurant or a simple form on your website they can fill out with a few keystrokes.

5. Follow up in a timely fashion. Once you get a hot referral, follow up before it has time to cool off. Two weeks should be the maximum time you wait to get in touch. Build the time frame into your referral system, and use tools like CRM software to set reminders of when referrals should be contacted. When you follow up, don’t assume you’ve “got it made.” Introduce yourself by referencing the person who made the referral, then follow up by educating the person about what your company can offer them, rather than doing a hard sell. Consider sending some free information, a sample or a discount on a first purchase.

6. Deliver on your promises. Make sure your interactions with the referred customer are professional and that, if he or she buys from you, you provide outstanding service. Otherwise, you could end up embarrassing the person who provided the referral, and not only will you fail to land the new customer, but you might just lose the old one.

About the Author:

Rieva Lesonsky

Guest Blogger

Rieva Lesonsky is CEO and President of GrowBiz Media, a media company that helps entrepreneurs start and grow their businesses. Follow Rieva at Twitter.com/Rieva and visit SmallBizDaily.com to sign up for her free TrendCast reports. She's been covering small business and entrepreneurial issues for more than 30 years, is the author of several books about entrepreneurship and was the editorial director of Entrepreneur magazine for over two decades

Comments:

I've been in Sales 24 years, and the majority of it out in the field. Referrals are a main portion of my sales. Another good article I found is: http://www.forbes.com/sites/theyec/2014/02/10/six-ways-to-get-more-word-of-mouth-referrals/ 1. Bake word-of-mouth referrals into expectations. Many companies make the mistake of asking for referrals after the product or service has been delivered. You can take that route, but setting expectations upfront can be helpful as well. Send a quick note telling new customers that you intend to provide an incredible level of customer service and support, and that in return, you and your business really rely on word-of-mouth referrals. 2. Offer time-bound referral bonuses. Customers will often file your referral offer in the back of their minds in case they hear of someone who they think would work well. That doesn’t really work, as people get busy and forget. It’s often more effective to offer a bonus that’s time-bound — say, a two-week window — with a specific discount or gift offer. That way, your customers can take a couple minutes to think through who could use your service and make introductions right away. 3. Make how you would like referrals clear. Simply asking for referrals leaves too much up to your customers’ imagination. Have a specific process in place. For example, have them fill out a referral form on your website. 4. Do something unexpected after the engagement. Even if your relationship with a customer has at some point hit a snag, the last impression you leave with is often the longest lasting. Like a restaurant that gives you a free box of chocolates at the end of the meal, provide something unexpected and unpaid for after your time together. For a service business, this could be a free add-on 30 minute consultation on a related issue; for a product-based business, this could be an inexpensive accessory you find that many customers need. 5. Be incredibly thankful. This seems obvious, but so many businesses forget about it. Unless your price point is very low, having someone on your team place a call, send a handwritten note or send a gift for a referral is almost always worth it. (Yes, a handwritten note — when was the last time you got one of those?) It’s easy to send an auto-generated email – the incredibly thankful part is taking that extra step. 6. Automate all reminders and referral processes. This seems counterintuitive, but it’s important. Personalized, tailored thank-yous, emails, and reminders take time. While dealing with everyday crises, on boarding new customers, and dealing with a thousand other things, it can be easy to lose track of referral processes. Make sure that your CRM or calendar generates reminders to get everything you need out at the right time. Patrick Benadum President A BusinessStore.net
Good referrals from satisfied clients are invaluable, especially to a small business. I use referrals and testimonials on my website, in printed collateral, and on social media. If your client is willing, try to capture their testimonial on video. This can be a really powerful asset. The best referrals and testimonials are the ones you don't even have to ask for. Treat every customer or client like family and they will heartily recommend your business to their friends. Word-of-mouth is a powerful thing!
Another good way to ask for referrals is to send an email asking for referrals and give them the exact email you want them to send out.
it will take a little work on the front end to set up a referral process, but it will pay off in long term as for the qualified new business.ultimately
You're branded, branded, branded, branded. It's time for me -- and you also -- to think about a lesson within your huge brands, a lesson that's precise for anybody who's enthusiastic about what it requires to stand out and prosper within your new planet of work. Regardless of age, regardless of position, regardless belonging toward business we come about getting in, all of us should recognize the significance of branding. We are CEOs of our individual companies: Me Inc. getting in business today, our most exceptionally important duty is getting mind marketer for that brand brand named You :) Signed with Brand
In six steps you mentioned above, you can tell me what is the most important step you can and explain
I agree with all your points above! I know some business men that doing 'referral' strategy and it's really effective especially for small businesses.
Thank you for such useful information. I am often looking for referrals. I use email and social media to look for referrals. For me it is the most profitable way. Totally agree with you on the 6th point (Deliver on your promises). This is very important in business.
Yes,Got all those 6 keywords are not more competitive in my words those are the keywords to make us sensitive and it must shows when we come search for business developments.and this also benefit's must be found with my responsibility .. Thank You Ronnie
Point number 1 is very much overlooked. New business owners can be way too timid when it comes to asking friends and customers for referrals. People don't want to feel pushy or nagging - but getting those referrals is critical to long-term success. After all - if you don't think you're providing a service or product that you're proud enough of to ask for a referral - you need to find a new business or quit. Be bold! Be proud of your business and get that referral!

Pages

Leave a Comment

You must be logged in to leave comments. If you already have an SBA.gov account, Log In to leave your comment.

New users, Register for a new account and join the conversation today!