How To Use Business Referrals
Business referrals are recommendations about your services or products made to others by satisfied customers. They are a personal endorsement of your company. This guide looks at how to generate and utilise referrals for the benefit of your business.
Why Business Referrals Are Important
Many forms of advertising and PR can be expensive and difficult to qualify in terms of effectiveness and value for money. Referrals cost nothing, and word of mouth is a proven powerful marketing tool. The average consumer is also more likely to trust the recommendation of a neutral satisfied customer, particularly when there is also an opportunity to view an example of your finished work. Very few businesses however actively seek referrals from their customers. In fact, research indicates that twenty per cent of small businesses are not taking advantage of word of mouth referrals, even though the same proportion believes this is the most important way of gaining new customers. It is also a good way of finding out how ‘satisfied’ your customers really are, and if there are areas in which you need to improve!
How To Use Business Referrals
Asking a satisfied customer for a referral (a name of someone that they might think would be interested in your services) is a simple approach to growing your business, but it has to be built on a secure foundation – you have to do a very good job and the customer’s expectations must be exceeded.
Top Referral Tips
- Always carry around business cards with you and leave several with clients. This is a good “drip drip” way of getting your name about;
- Don’t forget to give people information they might require, such as the full range of products or services you offer;
- Family and friends should be a good source of referrals as they should be the strongest fans of your business. Staff too should be a good source of referrals. People are more likely to refer you if there is something in it for them, so reward staff if they bring you a referral that leads to a contract;
- Let your customers know about the type of customers you are looking for;
- Remember to refer business to those that refer customers to you – reciprocate the gesture;
- Don’t forget to say thanks for any referrals. Consider offering incentives such as a case of wine. If customers are really happy and pleased, they will not require incentives, but a gesture of thanks is always appreciated;
- When you send information to a customer, ‘piggy-back’ that information by sending a second copy with a tag or hand note saying, “for a friend”. Typically, the customer will pass that information on and
- Do not make cold calls to ‘referred’ clients rather send them a letter with details about your services and why you are different from your competitors.
Who Should Be Involved in Business Referrals
Any staff member who has contact with a satisfied customer has the potential to generate a business referral. Your family and friends and those of your staff should be a good source of referrals as they should be the strongest fans of your business. People are more likely to refer you if there is something in it for them, so reward staff if they bring you a referral that leads to a contract
Timing And Monitoring
- When should you ask for a referral?
- You have successfully completed a contract for a client, and they are delighted
- You solve a problem for someone who wants to reciprocate in some way
- Someone thanks you for doing a good service
- You have helped someone through a particular difficulty
Only ask for a referral once you have completed the job and make sure you are not too forceful. You can simply say something like, “I am glad you are pleased with the work; I wonder if you can think of anyone that might also be interested in our services. If so, could you kindly give them our name so that I can send them a brochure? Remember if you don’t ask the question, you won’t get an answer! Or you could ask customers to tell other people about your work by saying, “I am glad you are pleased; would you mind telling your friends about us please?” If they are truly delighted, they would be more than happy to tell their friend about you.
Neville Stein MBA
Horticultural Business Consultant
Tel: 0044 7778 005105
Email: info@nevillestein.com
www.nevillestein.com