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Want to grow your business the easy way- One Word. Referrals.

By: Alice Heiman
Categories: Referrals, Sales

One word. Referrals.

I can’t think of a more powerful selling tool. Referrals can be the main source of business for smaller companies. Yet time after time I find my clients not making referrals a priority in their business.

One of the things my clients love about me is that I am a great referral source and they don’t have to ask me. Yes, I am a walking advertisement for my clients and any product or service that I love.

“The reality is most people aren’t, even if they love you, your company and everything you have done for them.”

So it is our job to remind them that we love their referrals (and we need them). The easiest way to get a referral is to ask.

There are statistics that tell us that 80% of satisfied customers would give a referral if asked. This is great news. Here’s the problem. There is another statistic that tells us that satisfied customers are only asked for a referral 4% of the time. Big disconnect.  And what is really funny is that the salespeople I work with (including the business owners) tell me they ask for referrals all the time. When I start measuring, it turns out they don’t ask very often and when they do it is ineffective.

Why not ask for Referrals?

When I did my strategic planning this year, we listed all of the new clients we landed in the previous 12 months and the lead source. What do you think we found? Ninety percent came from a referral from a loyal client or referral source. This made me rethink, once again, what lead generation methods we are spending money on. We decided to improve our referral process even more, rather than go after other lead generation methods that cost more.

I believe that many times we don’t ask for referrals because we forget. We are all busy and concerned about making our clients happy and we forget to ask. Sometimes we don’t ask because we are uncomfortable. You should not ask for a referral if you are uncomfortable, but then you should ask yourself why. If you did a great job and the client is happy, they would gladly give you a referral, you just have to figure out a way to ask that works for you.

Are you Convinced?

Here are some statistics to help you see the power in referrals.

Why are referrals so powerful?

    • 65% of new business comes from referrals. (New York Times)
    • Customers trust recommendations from friends and family more than any other form of advertising. (Neilsen)
    • 83% of consumers are comfortable making a referral after a positive experience. (Texas Tech University)
    • Customers are 4x more likely to buy when referred by a friend. (Neilsen)
    • A referred customer is 18% more loyal than a customer acquired through a different method. (Journal of Marketing)

Most companies can benefit greatly from receiving more business through referrals.

How are you currently getting referrals?

Here are some ideas to get you started.

1. Do an outstanding job for every customer. Customers will only refer you if they feel like you’ve earned it. So, go above and beyond with your customer to reap the referral rewards.

2. Check periodically for customer satisfaction. When a customer says they are happy that is the best time to say something like, “Thank you! We appreciate your business and we are looking for other customers like you.  Who do you know that could use our products and services?”

3. If a customer is not satisfied, fix it right away.  Once it is fixed ask them for a referral, if they won’t give one it may be a sign that they are not completely satisfied or that you will have to do more to earn back their trust.

4. Send your customers handwritten appreciation notes, and include a business card.  Ask them to give the card to someone they know who could use your products and services.

5. Send an email special offer to your customers and ask them to forward it on to others that may be interested.

6. Be specific about what kinds of customers you are looking for.  “I am looking for companies that need the personalized service we provide.”  “I am looking for entrepreneurs who want to outsource their controller function.”  “I want to help entrepreneurs who can’t afford to have a full time assistant.”

7. Share your wish list. Make a list of 5 companies you would like to work with and ask your customers if they know anyone they can introduce you to.

Here’s our Referral Process

If you don’t have a referral process, develop one.  If you have one, be sure it is written down and shared with everyone in your company.

Here is an example of what has worked for me when asking satisfied customers for a referral:

Step 1: When the contract is signed, we thank our new client. This is done by email, noting we received the signed contract, appreciate the business and look forward to getting started. We often send a handwritten thank you as well.

Step 2: Once the training or coaching has been delivered we ask for feedback. If they are satisfied we say something like; “Thank you for the feedback, may we use that as a testimonial and post it on our website?” Then we say something like; “We love to help small businesses like yours grow, who do you know that we should talk to about increasing sales?”

Step 3: When we receive the referral we thank the client verbally and by email.

Step 4: Once we have connected with their referral we update them on the conversation and next steps.

Step 5: If the referral does business with us we send a handwritten thank you note and sometimes a surprise.

I want to encourage you to make a plan to get more referrals and train everyone in your company on how to do it. Happy customers will give referrals when asked.

If you or anyone you know, needs help creating a detailed referral process, email me at Alice@AliceHeiman.com or feel free to call (775)852-5020 and set an appointment. In one hour you will be on your way to getting more business through referrals.

Alice Heiman
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Alice Heiman

Founder and CSO at Alice Heiman, LLC
Alice Heiman has been helping companies increase sales for more than 20 years. Her innovative sales leadership programs, coupled with her top-down approach to creating long-term change, set up sales leaders and sales-managing business owners to get consistent and sustainable growth.
Alice Heiman
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20 thoughts on “Want to Grow Your Business the Easy Way? One Word – Referrals”

  1. Thanks for always providing such actionable advice in your newsletters Alice. Yours is one of the very few newsletters I’m excited to read when it pops up in my inbox. I appreciate your great work!

  2. Testimonials are a great way to get referrals. But what is the best way to get a testimonial without sounding like I’m pushing them?

    • That is a great question. We never want asking for a referral to be awkward or pushy. You need to look for opportunities to ask. The appropriate times become apparent as you build relationships with customers. Any time a customer is raving about how great you are you can tell them how much you appreciate them and that you are looking for more customers just like them. You can ask them, “Can I put that in writing?” or start a conversation about who they know that should be buying from you. Or say, “I’d like to give that same great service to your colleagues, who do you know that I should be doing business with?” Then ask them to introduce you.

  3. I think it’s crucial to follow up with a thank you after you have received the referral! Continues to show the appreciation, thank you for your advice Alice!

  4. Great recommendations Alice! Ive experienced first hand the power referrals have to bring in new business and loyal customers which is why it always amazes me the disconnect between businesses and their existing customer base. I think the disconnect simply comes with the follow-up because many people forget too or jump the gun and skip towards whats next.

  5. Great advise Alice, and it still blows my mind that only 4% of customers are asked for referrals when 80% of the customers will give an referral if they feel they had great service or enjoyed the product. However, I think the disconnect comes from having employees working customer service mostly and they are not as passionate as the business owners are.

    – Nick Zadrozna

  6. I can personally attest to the benefits of a good referral. It really helps get not only your foot in the door but the prospect is a lot more open to listening to what you have to say if the referral comes from a trusted source! Use LinkedIn! Ask for referrals! I promise it will help your sales.

  7. This article clearly shows that the best way to generate customers is through referrals. I think it’s crucial to provide great customer service because line stated in the article, 83% of customer’s who had a positive experience in dealing with your business, are more likely to fill out a referral or refer a friend. Also, customers who are referred are more likely to be loyal to your business than other types customers.

  8. People hate asking for help. Entrepreneurs that possess DIY attitudes may be hesitant to ask for referrals because they dislike the idea asking others for help. Attitude and ego are often what separate strength from success.

  9. Thanks for the great advice Alice! Referrals are must when it comes to expanding your company. The step-by-step process is extremely helpful!

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