I can still remember my first customer referral.
A colleague had recommended my services to one of his clients, and after a quick call, the client was ready to proceed.
No lengthy process to find them.
No need to fly to meet them.
Heck, there wasn’t even a reason for them to think about it.
Referrals are the crème de la crème when it comes to finding new customers or clients.
Problem is, though, they’re typically unpredictable.
What if there was a way to systematize your leads? To actually have a process in place ensuring that you received pre-qualified leads on a regular basis?
Good news. There is.
What Are Business Referrals?
Let’s start with looking at what an ideal referral looks like.
A satisfied customer or client, colleague or friend, refers one of their customers, clients, colleagues, or friends to use your product or service.
Seems pretty easy.
In fact, you are likely giving referrals all the time. From the person who cuts your hair, to the riding lawnmower you bought last summer.
If someone or something does a good job, and the experience you have along with the purchase is good, you’ll mention it to others.
The problem is, we don’t always know when someone is looking for a new hairdresser or lawnmower.
Enter “the request for a business referral”, a long-time strategy used by life insurance salesmen. After meeting to review and make any updates to your life insurance (and trying to sell you more life insurance), they would ask for three names.
“Which three people do you know that you think could use some life insurance?”
Of course, everyone needs life insurance, and since this was a parting request after a positive meeting, why wouldn’t you offer a name or two?
This is the foundation of a solid business referral process—repeatedly asking for referrals from happy customers.
It worked great for life insurance agents, but what about your business? And how can you scale something that needs to be asked repeatedly?
How Do I Increase My Referrals (and why should I bother)?
The key to getting referrals is to ask, and ask a lot.
The challenge, however, is that for many, asking for a referral is not a natural tendency. It seems for many of my clients that a referral is almost an afterthought.
So to increase the number of referrals, you need to find what works to get the referral. Then, find a way to make it part of your routine.
- Submitting a final invoice, ask for a referral.
- Checking in with a customer to see how their experience has been (LINK), ask for a referral.
- Reviewing customer feedback following a purchase, ask for a referral.
- Test different times to find what works best.
- Which method gives you the most referrals?
- Which of the referrals are actually leading to new business?
Knowing what works is like gold.
You then have a proven process for obtaining referrals, which you can repeat.
If you have a team of people working for you, ensure you include them in this process.
They can help you quickly identify which are the best methods for obtaining high-quality referrals.
You can also set up a sequence of events to preempt your referrals.
You might tell your customer that you are going to ask for a referral, then ask for a referral (when you said you would). You can even add a third step, but more about that in a moment.
Just know that the way to increasing your referrals is to ask for referrals at the most opportune times in your customer relationship. Typically this is after a customer has experienced your product or service, but before you’ve parted ways.
Lastly, by incorporating this practice and making it a routine, you begin to fill your funnel with new referrals in a consistent and predictable manner.
Let’s Talk about How to Build Your Referral Funnel!
Until this point, we’ve broken down exactly what referrals are, and how to get more of them.
Let’s take this opportunity, then, to build out a referral funnel for your business. It’s one thing to ask for referrals and start to get them flooding your business, but what you really want is a referral funnel—having an automated way to get referrals that doesn’t require anyone, including you, to ask for them.
To get started, then, arm yourself with the following information by answering a few simple questions.
1. Who are your ideal customers (that you’d want more of)?
2. When is the best time to ask for a referral (from the exercise above)?
3. What are the best methods to reach customers and ask for the referral?
4. How will you ask for a customer referral?
5. When are the ideal times to follow up and ask again if you don’t get a response?
If you want to better understand how to identify your ideal customers, see the exercise here.
Armed with this information, let’s build your customer referral funnel.
Step 1: Write out the script for asking for a referral, keeping in mind who your ideal customers are.
Step 2: Identify when to mention the referral request in your sales cycle.
Step 3: Identify the best time during the customer experience to ask for the referral.
Step 4: Incorporate your script into an existing process step (i.e., phone call, follow-up email).
Step 5: Include a way for customers to easily provide you the referral (i.e., send an email to the referral and CC firstname.lastname@example.org).
Step 6: Monitor the inbox you’ve identified, and follow up within 8 hours of receiving the referral.
Step 7: Incorporate a thank-you message and gift to any customer who sends you a referral.
There you have it.
Your very own referral funnel that will automate how you can receive a customer referral.
As a bonus tip, if you want to make this even more effective, send a video message from yourself as part of the script. You can send users to a landing page that will play your message.
13 Ways to Ensure You Get a Referral Every Time
1. Create an extraordinary customer experience
The most basic rule to obtaining referrals starts (and ends) with a positive customer experience. If the experience isn’t positive, you have no hope of ever gaining a referral.
When you invest time and money into creating a distinct memorable experience for customers, you set yourself above the crowd. In doing so, you create the environment in which customers want to tell others about their experience.
Think of it like stacking the deck in your favor.
2. Allow your customers to share their extraordinary experience
If you’ve invested time and money into creating a distinct memorable experience for customers, ensure they can talk about it.
Talk about your efforts in creating the experience on social media; encourage customers to talk about their experience with others.
Happy customers want an excuse to tell others about their experience. Make it easy for them to talk about you, your business, it’s products and services.
3. Choose the best time to get customer feedback
If you’ve been to a home improvement store, you’ve likely been asked to “go online and fill out a survey for your chance to win $1000.”
First off, asking at the very end of the customer’s experience is too late. They’re thinking about where they need to go next. Additionally, a “chance to win” isn’t enough motivation to get most people to visit your website.
The best time to ask for feedback is before the experience is complete. This allows the opportunity to fix the things that may not have hit the mark for your customer.
4. Resolve negative feedback quickly
It’s bound to happen.
Eventually you’ll get feedback that isn’t positive and when you do, make sure to respond quickly. In doing so, you gain the opportunity to impress your customers with your responsiveness to their needs.
I still recall a horrifying internet installation experience we had several years ago. The job was incomplete due to a missing part.
The technician advised he didn’t have time to get the part, but then proceeded to talk to a colleague in front of our house for an hour.
When I was able to share my frustration with a very kind call center attendant, my opinion of the company quickly changed. She not only rectified the situation, but ensured we weren’t charged for anything.
5. Create a customer referral request cycle
You can ask for a referral more than once. In fact, you must.
There’s a belief that if you ask for a referral and you don’t get it, it’s time to move on.
If a customer is a long-term customer, then they’ve stayed for a reason. You should be harvesting the opportunity for new testimonials on a monthly basis.
Surely they know more than a few people who could use your product or service, and they are meeting new people all of the time.
Ensure your process includes asking existing and long-term customers for referrals on a regular basis.
6. Ask for referrals in any and all communications
Why not make it easy for a customer to refer you?
You likely send dozens, if not hundreds, of emails every day. Add to this the various marketing content that is being shared, and suddenly there is a very lucrative avenue for referrals.
Email signatures should ask for a referral and then tell customers exactly how to provide a referral.
The bottom of blog posts, marketing documents, and reports should also mention how important referrals are, and exactly what to do in order to provide a referral.
Use every imaginable communication avenue in order to solicit referrals, and you will create an ongoing flood of them.
Don’t wait for someone to offer a referral, ask for them… continuously!
7. Offer a referral incentive
There’s something to be said for incentives.
If you fish with a net, you might catch some fish, but your chances are much better if you use bait.
Up until now, we’ve talked about the various ways to ask for referrals. With these in place, it’s time to offer some incentives.
How could you incentivize customers and even potential customers to refer others to your business?
- Offer a discount off their next purchase.
- Provide an additional product or service for every referral.
- Develop a points system for referrals, allowing customers to cash in on future purchases.
- Announce the benefits that customers who provide referrals get.
- Provide a discount coupon for every referral.
The ideas are endless, but the point is simple. The more you can incentivize customers to provide referrals, the more likely they will.
When you consider that the cost of acquisition of a customer through referral is much less than it would be otherwise, why wouldn’t you reward customers for every referral they provide?
8. Use social media to your advantage
You can share quotes and other news on your social media feeds, but why not get them working for you?
The goal in social media isn’t to make people “aware of your company”, but rather to obtain leads from social media for your business.
If you take your customer incentives to your social media pages, mentioning what customers will obtain for a referral, you motivate them to respond and take action.
9. Lay out the steps to providing a customer referral
Sometimes you need to keep things simple.
You can ask for referrals from your customers, but the easier and more painless you can make the process, the better chance you’ll have of getting the referral.
Provide customers with a step-by-step template or online tool where they can enter a referral’s name and information. Keep it simple!
By laying out the steps, you make it a no-brainer for customers to provide you with referrals.
How many referrals are sitting with your customers right now, that they just aren’t quite sure what to do with?
10. Develop referral partners
Earlier in my career, I ran a not-for-profit and we needed to grow our members. Problem was, we didn’t have the budget to hire more people or to pay for any advertising.
What we did was to tap into our network of suppliers and business partners to educate them on what kind of referrals we were looking for.
We described our ideal customers, what their needs were, and how we help.
Then we offered an incentive, in this instance a small commission for any referral they provided that actually became a member.
It worked like a charm. We had new members signing up, and although we were paying a small commission, it was money we were earning from the new revenue we gathered.
Who supports your business that could offer you referrals? Are there suppliers, vendors, contractors? Educate them on the kind of customers you are seeking, and watch the referrals come rolling in.
11. Try the “Give to Get” strategy
Have you ever helped someone out, only to have them return the favour? I call this the “give to get” strategy.
If you want other companies to refer you new customers, try to first send them a referral.
When they say thank you for the referral (and they should!), just mention that you’d be appreciative if they did the same when and if the opportunity arises. Then describe the kinds of referrals you are looking for.
12. Adopt a customer referral program
It’s one thing to engage outside suppliers and contractors to provide referrals. If you want to take referrals to the next level, though, build yourself a referral program.
A program like this provides anyone an opportunity to provide you with a customer referral.
Just lay out what kinds of customers you are looking for, how you help, and then what incentive you offer to anyone who refers a customer.
This type of program not only works with existing customers, but it is a great way for employees to get involved as well.
Having a formal referral program ensures that you don’t miss anyone when asking for a referral, and keeps the benefits of participating equal for anyone.
13. Ask non-customers for a referral
It’s pretty obvious to ask existing happy customers for a referral, but what about those companies that never become customers?
In fact, you can ask for referrals from anyone, even if they haven’t become a customer.
Often the idea of not working with you can make a potential customer feel guilty. A perfect way to take advantage of this is to ask for a referral.
Here’s an example:
“John, I’m sorry you’ve decided not to work with us, but know that we will be here when and if you ever need us. In the meantime, is there someone you’d suggest I connect with whom we might be able to help?”
Sometimes the guilt of not doing business with you is enough to want to provide a referral to someone else. Take the opportunity!
You’ve Got the Referral. Now What?
We’ve put all sorts of strategies in place by this point, and you should be starting to see referrals trickle in.
This brings up the obvious question: What do you do when you get a referral?
There are a few key steps you’ll want to take to ensure you capture the referral quickly and pursue it in the most effective manner possible.
The four most important steps to follow once you receive a referral:
1. Know who the referral is coming from: Do some homework to understand who the referral is, and to be prepared to speak to how you, your product, or your service can help them.
2. Make contact your first priority: In today’s day and age, responsiveness is key. The company who gets to the referral first is the one most likely to make the sale. Make sure you see referrals quickly and you know what to do when you receive one.
3. Don’t give up on the first try: Everyone’s busy, and just because they are referred to you doesn’t mean they will drop everything to speak with you. Make it a point to follow up several times (spread over the days and weeks following the referral). If you reach a point where you aren’t able to contact the referral, make sure you circle back to the person who made the referral to update them.
4. Be grateful: Always thank the referrer for their efforts and time. The more impactful the thank-you, the greater the chance you’ll receive future referrals.
Your Business on Autopilot
There’s a lot that goes into finding, attracting, and closing new customers.
Referrals are the shortest path to success. They take next to no marketing, and the barriers to closing the business are far less than with any other potential customer.
You owe it to yourself to put a proper referral program in place. There is literally no faster way to increase your sales.
So what are you waiting for? Start reaching out to all of your customers one by one, and ask for a referral.
The worst you’ll get is, “I can’t think of one,” to which you can respond, “No problem, I’ll check back with you in a month.”
It’s time well spent, and some of the fastest sales you’ll ever make.
© Shawn Casemore 2020. All Rights Reserved.