Referrals are a key component for any business. With a good referral strategy in place, your business can grow quickly at little cost to you. Getting referrals does take care and some effort, and you’ll need to feed your network once in place, but the results are well worth the time. Here are some basics and tips to grow your referral business.
Your best source of business and closed sales is first from existing customers, and second from referrals. The acquisition costs are low, the closing percentage is high, and happy customers generate multiple new prospects.
When we develop a referral strategy for a client we generally identify three categories:
Existing Customers/Clients – Referrals from your current and former customers are the most valuable, so if you’re going to start somewhere, focus on this group. It’s important to first make sure the customer is happy with your service, and that can be a great way to get back in touch with a phone call, email, or with a card followed by a phone call. Start by asking the client how they are enjoying the product or service, and to rank their satisfaction on a scale from 1-10 or 1-100. If they are less than 90% satisfied, don’t worry about the referral – fix the issue. If they are happy, ask if they are comfortable telling others about their experience with your company.
Strategic Partners – These are businesses who have the same target audience as you, and often refer your service. For example, a roofer may develop a strong relationship with a landscaper, plumber and HVAC company. All three service homeowners and can generate referrals to each other, provided they form trusting relationships.
Golden Geese – To really jump start your referrals, identify your “Golden Geese” – you don’t want the golden egg (a referral), you want the golden goose – the business that gives you multiple referrals each month. Using our example above, golden geese for a roofer might be real estate agents, home inspectors and insurance agents. Again, you need to cultivate a trusting relationship.
You have to ask! Referrals don’t happen by magic, so you need an easy, repeatable system that becomes part of your overall business processes. The mistake most businesses make with referrals is never asking in the first place!
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