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The Alternative Board Blog

4 Ways To Jumpstart Your Referral Marketing System

Apr. 2, 2014 | Posted by The Alternative Board
Referral Marketing. Online Working Concept.

As discussed in our previous referral marketing post, referrals are the most cost-effective way to acquire new clients for most companies. OK, so the proof is in the pudding, but how is one to go about getting referrals? Well, here are four great referral marketing ideas that will set you on the right path to creating your referral marketing system.

1. Ensure your business is worth referring

Before you can sell your product or service, you need to truly believe that your target clients’ lives would be significantly better with your solution…and that you specifically are able to deliver this value.

The Referral Engine, by John Jantsch, explains, "A referral is the result of a job well done, exceeding a customer's expectations and delivering an experience worth talking about."

Key elements to ensuring that your business is worth referring are:

  • Trust: Built through repetition, trust is the key to building a strongly referable brand. Building trust requires consistency and delivering value every single time.
  • Accountability: For many services businesses, it is important that the client be active and accountable as well. Sometimes, it is better to fire a client who is not going to do their part, rather than have them compromise the strong reputation you have built.
  • Client’s Value: Value in a business is more than a client liking you and feeling emotionally positive about your brand. They also need to receive a tangible benefit from your product or service. Develop a simple framework for your clients to objectively track the value they are receiving.
  • Making it Right: Despite your best efforts, the reality is that sometimes things go wrong. Make it right. Turning a bad situation into a positive experience actually enhances a customer's loyalty.
  • Testimonials: Client testimonials and case studies are the best way for prospects to learn from others that your product or service is worth trying. Establish a program so that you are continually collecting testimonials and case studies from your clients for a job well done.

2. Make Existing Clients Referral Sources

Existing clients will likely be your primary referral source. The following are recommendations to maximize clients as referral sources:

  • Set Expectations: Start the referral process during the sales process. When you meet with a prospect, say something like the following: “I am so confident that you will be so delighted by the value you receive that you will regularly refer your colleagues/friends/family to me.”
  • Positioning: Make it a standard part of your process to ask your clients for referrals. Position referrals to your clients not as something for you but that their colleagues, friends and family will be able to get the same benefit that they receive.
  • Net Promoter Score: Utilize the Net Promoter Score® (NPS) to assess how referable your business is. Clients that give an 8, 9 or 10 are raving fans and very likely to refer your service to their colleagues. Regardless of NPS, ask your clients why they gave the NPS that they gave. Then, act to improve reasons for the lower scores.
  • Great Service: According to 5 Steps to Unlimited Referrals, by Thomas Gay, 15% of customers will leave due to poor service; but a whopping 68% of customers will leave because of indifference. Providing great service to your clients and ensuring that they feel valued is the best way to receive referrals from them.

3. Connecting with 3rd party, or non-client, referral sources

Non-client referral sources are businesses or individuals that target, or have personal relationships with, your target client base. They are trusted by their clients and are respected in the local community. Here are some tips on gaining new 3rd party referral sources:

  • Influencers: People who are trusted, respected and have a wide network of contacts. One strategy to identify influencers is to join local professional or trade networking organizations.
  • Getting Their Attention: Call or email the potential referral source to introduce yourself, your business and your product or service offering. Explain the reason for your call and detail how you think the referral relationship will be mutually beneficial.
  • First Meeting: When you have a first meeting with a new referral source, ask them:
    • What is your ideal customer?
    • What are your unique benefits?
    • What are trigger phrases that will help me identify a good prospect for you?
    • Once you receive a referral, what is your next step?
    • How do I refer a prospect to you?
  • Unique Selling Proposition: Make sure referral sources understand your business and why your offering is unlike any other product or service out there.
  • Evaluate the Referral Source: Before entering into a referral relationship, ask yourself: “Am I comfortable referring my best customers to this referral source?”
  • Building the Referral Relationship: Building an active referral network involves relationship building, because referral sources will refer prospects to partners that they know, like and trust.
    • "Give, Ask & Receive": Change your mindset from "what can I get" to "what can I give". If you are adding value to your referral sources, the referrals will come.
    • Provide Content: Send to your sources to help them become better educated about your business and industry.
    • Develop a Communication Process: Stay in frequent touch with your referral sources. Use a mix of personal notes, phone calls, drive-by visits, or emails. The bulk of your communication should educate and provide value – not focus on asking for referrals.

Want additional insight? Read 4 Step Guide to Strategic Planning now to learn more

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4. Develop your referral marketing system

Developing a consistent referral marketing system will make or break your referral marketing program. The steps you should be consistently taking in your referral marketing system are:

  • Gauge “Referrability”: Send and analyze client satisfaction surveys. Whether you are using the Net Promoter Score or some other measurement tool, consistently review the data and determine where you need to make changes to increase the “referrability” of your brand.
  • Communication: Develop a communication calendar with which you can be certain your are touching each of your referral sources, whether it is a phone call, email, or invitation to coffee, frequently and consistently.
  • Ask for Referrals: Though much of your communication will be educational and valuable in other ways, there is a right time to ask for referrals. Follow the 80/20 rule here, where no more than 20% of your communication will focus on asking for a referral.

There are our 4 referral marketing ideas to get you started. Next in our referral marketing series, we will discuss when and how to ask for referrals and how to convert referral prospects into clients. But for now, what are some other referral marketing ideas that you using in your process that have been successful?

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Written by The Alternative Board

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