You will have a hard time finding a service professional, or any business owner for that matter, that believes referrals are not their best source of business.
2 Benefits of Referrals
In almost every case, referrals are the least expensive source of new clients. That is, the direct cost to acquire them is low. Especially compared to other marketing methods such as print or online advertising.
What you will quickly learn is that what might seem like a small step you take today, done continuously, repeated often, will reap big rewards.
Another clear benefit of referrals is their high closing rate. When you generate a lead from an inbound or outbound marketing channel, it can often take several months if not close to a year to win the business. This all depends on where the prospective client is in the buying cycle…and whether they’re just feeling the options out or have a serious problem they need a solution to ASAP.
A referral comes with a layer of trust built into it. You haven’t touted your own horn to generate that lead. It has come to you through a trusted source. Which means that the prospective client does not feel the need to ‘get to know you’ and ‘trust you’ to the same degree a general lead would. Ultimately, this means you close the sale more quickly.
The question then, is how do you get referrals?
I will share 10 strategies to land an on-going stream of referral business. Though before I get to that, let me be clear. None of the below strategies is of value unless you have a great product or service. If you generate referrals and try to sell a mediocre, or worse, an inadequate product or service, the effort you put into generating referrals will be all for not.
The business may come in…yet it will go away just as quickly.
With that, here are 10 of the best strategies to generate referrals:
Wouldn’t you love to get a ton of referrals and new leads overnight?! Well, here’s how to do it…wait a second. Stop the record. Just stop! That’s a load of BS. Like most things in business, the majority of referrals come from a systematic process you put in place and keep working on. Every little thing you do adds up. To see the real power of compounding, read Darren Hardy’s book, The Compound Effect. What you will quickly learn is that what might seem like a small step you take today, done continuously, repeated often, will reap big rewards. For referrals, this can mean reaching out to new people once a week, every week. Going to an event or networking meeting on a consistent basis. There is immense power in repetition.
Educate and Share
A great way to get referrals is by educating. Imagine setting up a blog where you share some of your best tips on a given subject. You do so on a continual basis. People keep coming back to you, why? Because you’ve established yourself as an expert. A trusted source of educational material. When they or their friends or colleagues are in the market for what you have to offer, who do you think they will go to? Of course, you!
Speak Your Mind
Do you want referrals? If you really do…don’t be shy to tell people that you do. One of the biggest mistakes professionals make is doing, well, nothing. They sit back and hope that business comes their way. If you want referral business and are confident that you provide a product or service of extreme value, then have no qualms about asking for referrals. Tell your friends, family, existing and past clients that you’re looking for “a couple new clients to work with” and ask them to let you know any time they think of someone that would be a good fit. If they don’t know you’re looking for new business, how can you expect them to refer business to you?
Take a long-term approach and understand that once your system is in place, you’ll be well on your way to great success.
This point dovetails into the above and is critical to every referral strategy. Targeting. You need to know what kind of referral business you want. Not every client is equal. Not every referral is either. The more you narrow your criteria of your ideal client and referral, the easier it will be for people to refer business to you. If you’re a management consultant and tell people “I’m looking for a new client, let me know if you think of anyone” vs “You know, I’m a management consultant that helps publicly listed technology companies deal with shareholder issues…” Now, which one is more detailed? Which one has a better defined set of criteria? Which one do you think would be easier to refer business for? The second one by far! The easier you make it for people to identify the type of business to refer to you…the more often they will be likely to do it.
You need to network. Okay, that’s it, next point…No, seriously. Networking is key to building your business. Get out of your office, go to events where your ideal clients will be. Go to industry events. The more you network and meet people the greater chance you will have to get referrals. When you’re networking, don’t do it with a focus on landing clients and making sales. Be genuine and focus on building relationships with people.
Here’s an easy way to get referrals. Give them first. The law of reciprocity (it may not actually be a law, but let’s just say it is for now…) shows that when someone receives something from someone else, they feel a need to ‘pay’ them back in like kind. What better way to open yourself up to receiving consulting referrals than by giving referrals to others. The more you give, the more you will often get.
Make Them Talk
One way to generate referrals naturally is to give people something to talk about. If you provide a product, service, or after-service that is remarkable, that will make people talk…they will. And that often leads to referrals and word-of-mouth business. I always suggest to consultants and business owners that they consider whether their product or service (what they give their clients) is shareable. If the client can and has a reason to share it with others…they are well on their way to getting referrals and being talked about.
This is probably the easiest to implement yet few do it. As soon as you’ve delivered your product or service and your client is satisfied (or ideally beyond satisfied)…thank them again for their business and ask them if they know anyone else like them that you might be able to help and work with. Industries have been built with this concept. Think Cutco, Amway and Avon. Every time a ‘consultant’ meets with their client they ask for referrals…and many times they get them. This just plain works. So why not put it to work for you?
Another strategy to generate referrals is to offer a promotion. Many companies run promotions where you get a discount or money when you refer-a-friend…and then your friend also gets some benefit. This approach is effective, countless companies in all kinds of industries use it. Think about what kind of promotion you can run that would resonate and be relevant to your existing and past clients.
Once you have received a referral, it’s important that you thank the referral source. You can send them a handwritten note, send them some chocolates or a bottle of wine. A gift card for dinner for two…pretty much anything you think they would appreciate. The key here is to show them that YOU appreciate them thinking of you and that they are indeed helping you and your business. People like to help others, it generally makes most of us feel good to do so. The more they know that, the more likely they are to continue referring you more business.
Take a couple of these referral strategies and implement them in your business. Use all of them on an on-going basis and get ready for a stream of new clients. But remember, referrals don’t always come with the turn of a tap. Take a long-term approach and understand that once your system is in place, you’ll be well on your way to great success.