referral marketing for small business Archives - TAB Corporate

Creating & Implementing Your Referral Marketing System

Advertising concept: black text Referral Marketing under the pie

So far we have discussed the benefits of referral marketing and some great referral marketing ideas to get you started. Now let’s focus on developing your referral marketing system. This post will discuss when and how to ask for a referral, and how to capitalize on those referrals by bringing them on has clients.

When to Ask for a Referral

As discussed in 4 Referral Marketing Ideas to Jumpstart Your Referral Marketing Program, at least 80% of your communication with referral sources should not focus on asking for referrals. Rather, these conversations should focus on the referrer. Naturally, conversations with current clients will mainly focus on the current project. Communications will all sources—client and non-client—can be centered on educational topics (for example, about business, their industry, their target market, etc.) or more personal areas of interest. Take care to learn about your top referral sources’ interests and hobbies so you can develop a more meaningful relationship with them.

The time does come in any referral relationship; however, for you to come right out and ask for a referral! Here are some tips on when it is appropriate to ask different sources:

  • Prospects: Whenever you meet with a prospect who declines your service, ask them for a referral. Most people want to say yes, so give them a chance to say yes after they have said no to using your service.
  • Clients:
    • When you provide something above and beyond your normal service.
    • When they say thank you for something, say: “The best way you can thank me is to refer someone to me.”
    • At a status meeting or review (if applicable) as part of the evaluation process.
  • New Clients: Ask for referrals from new clients shortly after they become your clients. They will be very positive as a brand new client and will be more open/willing to recommend your service to a colleague. Be sure that they have received some value first.

How to Ask for a Referral

5 Steps to Unlimited Referrals recommends you ask: “Would you do me a favor? If you think of anyone that could use my product/service would you mind sending me their name and number so I can follow up with them?” It avoids putting them on the spot.

  • Keep Control: If a referral source identifies a referral for you, be sure that you agree to a specific plan to contact the prospect. They may forget to contact them or just send an email. Instead, ask if they’ll take it a step further to place a phone call or arrange a meeting with the prospect.
  • Appreciation: Once a referral is received, ensure the referral is treated extra specially and that the referral source is shown great appreciation.
  • Testimonials: Instead of asking for referrals too often, you can also ask for testimonials – either written, video, or on LinkedIn.

Some people are naturally reluctant to ask for referrals. You may feel that you are imposing, or perhaps you’re not confident that your product or service is worth referring. John Jantsch explains in The Referral Engine that you need to believe in your heart that you are doing your sources a favor by permitting them to introduce your service to their colleagues.

Always remember that, by ensuring that your business is worth referring, your referral sources will be helping their colleagues, friends, and/or families by referring your business. In Andy Sernovitz’s Word of Mouth Marketing he found that the two main reasons why others recommend you are because 1.) they like to help people they care about and 2.) because it makes them feel good.

Converting Referral Prospects into Clients

OK, you have a referred prospect. Now what? The following are best practices for converting referred prospects to clients:

  • Key Question: When you first meet with a referred prospect, ask them this: “Mary suggested that you consider my product/services. Why do you think she referred you?” If someone they respect refers them to you, this question will cause them to thoughtfully consider why they need your product/services.
  • Customized Offering: Collect as much detail as you can on the prospect from your referral source. This will allow you to present your service in a customized way that will best fit that prospect’s pain points.
  • Special Offers: Offer prospects something special since they were referred. Perhaps they can sample your product or service for a period for free.
  • Validation: Allow referral prospects to validate with another positive client of yours. Try to find the client who is the best match for the prospect either through industry, area of expertise or behavioral profile.

That wraps up our series on referral marketing! What are some referral marketing ideas you have tried that worked well? What doesn’t work so well for you?

 

4 Ways To Jumpstart Your Referral Marketing System

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.

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?