According to Nielsen, 92% of consumers trust referrals from people they know. A Marketshare report notes that word-of-mouth can improve marketing effectiveness by as much as 54%. Businesses using referrals as part of their regular marketing see conversion rates up to 70% higher, and they also report a 69% faster close time.
Before you start actively hunting out referrals, make sure your company has the right systems in place for managing this new influx of interest, as well as a clear plan for sourcing and screening referrals. The last thing you want is to be fielding calls from interested prospects while scrambling to answer their simple questions.
However, if your client gets something out of the arrangement (beyond the warm fuzzies), they will make an effort. Once referrals are tied to a reward, you can transform your clients into referral machines. In the B2C marketplace, referrals often give clients discounts, free swag, vouchers, or items to collect.
Some clients feel uncomfortable giving referrals. It could be that they recommended someone in the past who turned out to be terrible, or they might feel uncomfortable pushing a service provider on their clients.
85 percent of small businesses say word-of-mouth referrals are the number one way that new prospects find out about their businesses. One advocate marketing firm found that referrals have a higher conversion, close faster, and have a higher lifetime value. Evidence like this makes it clear that a referral process will keep your business growing.
After all, with 39% of consumers building trust in a brand from peer-to-peer conversations and view other consumers as 14% more credible than brand employees, banking on attracting potential customers through your sales marketing efforts alone just isn't a sound strategy. You should also be tapping into your existing customer base as a source for business referrals.
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 talk, especially when delighted, and give you free referrals through word-of-mouth marketing to their family, friends, and even strangers online.
If you do want your customers to make referrals, give them a reason to talk about your company. As you approach your day-to-day, you must constantly be innovating in the area of customer experience. Not only do you want to delight them, but you want to delight them in a way that will put you top of mind. You want them to say to individuals in their network, "You will not believe what happened to me today."
Adopting a customer referral program is a great way for your team to be proactive when acquiring new referrals. Our post on how to build a customer referral program asserts, "that you're confident enough in your services and team to know that a referral program would be a positive investment."
You wouldn't ask your boss for a raise right after you missed the mark on your monthly metrics, which is precisely why it wouldn't be appropriate (or effective) to request a referral when you're under-delivering on what you promised a customer. The best referrals come about after the customer has had an opportunity to experience the value that you're capable of delivering.
If you get pushback when you ask for customer referrals, the first step is to back off and give them space. It's not important that you know the exact reason why they're saying no, and you want to be respectful of your relationship.
If you're asking a customer to refer people to your business, they may expect the same from you. By offering to refer your customers to other companies, you'll bring valuable bargaining chips to the negotiation table. Your customers will feel like they're getting equal compensation for the information they give up.
Another reason why it is essential to identify the clients you want to get a referral from is that it allows you to research them 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.
Note that referrals should be a part of a larger sales prospecting strategy. Like anything else related to prospecting, you should set aside time to plan and execute a strategy for generating referrals.
This is because many sellers are uncomfortable asking for referrals, not wanting to appear "salesy" or desperate for the work. Or they're insecure, unsure whether they actually deliver value and benefit to their clients.
Providing referrals is often reciprocal between businesses. If you work with other companies that you value, propose a partnership to exchange referrals with your respective clients. Offering to refer your customers also creates a welcome bit of leverage when negotiating.
I once worked for a large organization that prohibited written testimonials and discouraged referrals. However, I was able to provide recommendations by phone for vendors I worked with. Two of these vendors took advantage of this opportunity and closed several deals by having select high-value prospects speak with me.
Potential clients are far more likely to use free resources you offer before making any deals or purchases. Consistent and high quality blog posts are often a draw to a company website, but tools, research, and ebooks are also great ways to appeal to the kinds of customers you want to convert into leads and referrals.
Though there are numerous social media channels worth engaging with, LinkedIn remains the platform of choice for networking and doing your homework on prospects. You can also leverage LinkedIn to discover second-degree connections that may be good targets for referrals from your existing clients.
Let them know you view them as a strategic partner and tell them you hope they'll do the same with you. However, a partnership isn't something to take for granted when working with a client; it takes time to establish an essential relationship. Once a partnership has been built, create formal channels to share referrals.
This is just a start. Let these suggestions jump-start your own idea generation. Create a sales referral process that works for your ideal clients and your networks. When the time is right, reach out to the prospects your referrals have generated.
Be referable. Focus on your ideal clients. Tap into your networks in a proactive way. By putting a referral system into place now, you are more likely to receive lead-boosting referrals throughout the year.
Looking for a new way to generate new leads, bring in customers and grow your business? Learning how to get referrals from your existing customers can help your company bring in more clients and successfully scale.
Reward-based programs are an additional layer on top you can use to drive referrals. Yes, this involves paying to reward advocates, but these types of programs can scale and add a layer on top of all your other efforts.
Whether you have a blog, vlog, or social media pages, you may find that sharing quick tips and tricks, unique perspectives, insider knowledge, or other relevant information can be beneficial to your customers. You may even find that your customers will share your posts with others in their circle. This can result in your name getting out there, and possibly funnel more new customers your way.
If your clients are from the same industry, you can write a useful industry trend on a paper, create a blog post on how to deal with recent regulatory changes, host a Q&A session targeting new businesses, or invite referrals to a free webinar.
By providing a great customer experience and enhancing customer loyalty, you increase your chances of referrals. This service provides customers with fuel to tell others about you, as it creates a story that customers can share.
This might not seem like a direct way to get a referral, but if you can find solutions to common concerns, you have a clear way to make customers happy. And if you go above and beyond expectations, you may just see some referrals.
You may find that getting customer feedback can help you move your product forward, while still offering exactly what your customers want and keeping your promises. Good NPS software can help you get and decipher feedback.
Referrals are similar to customer reviews. If you offer high-quality services, you may not even have to ask for referrals. But asking for referrals the right way can help you move the needle. Here are some quick tips to get in the right mindset.
If you want people to know you want referrals, make it evident. A customer may talk about you, but never actually write down or give your information (other than your name) to others. This can turn a lead cold. As they might forget about you, or move on to another source that they have information on.
Maintaining a good email list is a great way to continually develop your relationship with customers. Not only will you be able to send them updates and vital information, but you have a list of people to ask for referrals.
Creating a reward-based program to get more customer referrals is not the only reason to create a program. A program also gives you signals, to see how referable you are. This allows you to measure and affect customer referrals and turn your word of mouth efforts into a marketing channel.
How to get referrals? At the end of the day, customer referrals come to the businesses that deserve them. When someone gives a referral, it ties their reputation to you and uses their social currency.
Everyone agrees: referrals are the most effective, and cost-effective, way to generate new business, yet asking for referrals can feel awkward. You really could use some more clients but you don't want to come across as desperate or pushy.
Over the past year, I've been focusing my business on getting referrals. We've found that when a person is referred over to our business, they are 3x more likely to use our product after 90 days than someone who wasn't referred.