"Hey Tim, have you tried the hardware store over on 6th? They were super friendly and had everything I needed to finish the deck." Does that statement sound vaguely familiar? Of course it does! Without even thinking about it, people refer acquaintances and friends to different places or services on a regular basis. Referrals are far and away the most missed opportunity for business owners. Referrals provide the most qualified leads at the lowest cost. Are you taking advantage of that? Is your business getting as many referrals as it should? When was the last time you or anyone in your business asked for a referral from a client? The truth is that most businesses, and their owners, do not ask for referrals because they are uncomfortable about asking and have no clear strategy for asking for referrals. Every business has the responsibility to create a strategy for referrals that is clear and intentional.
While you may get referrals based solely on the quality of your business, the potential for receiving qualified leads for your business is worthy of an intentional strategy. A strong referral program saves time and money, while at the same time creates a larger base of customers from which to draw more referrals. Asking for referrals may be uncomfortable, particularly in the beginning, but as with most activities, the more you do it, the more comfortable it becomes. To get started, there are four areas of focus for developing your referral program.
- Become known for referring
- Overcome reluctance to ask for referrals
- Create referral relationships
- Identify when and how to ask for referrals
1. Become known for referring:
This is where you start to lay the ground work for your own referral program. Stop and take 10 seconds to think about your neighborhood and the services you frequent and identify which ones you would have no problems recommending. (Really. Take 10 seconds and think about it. We can wait...) How many businesses did you come up with? Now, take another 10 seconds and think of friends or business contacts that would benefit from you telling them about that business. Write both the businesses and the contacts down and after you are done reading this article, take steps to recommend the businesses to the people you have identified. Then, be sure to follow up with both the business and the person you recommended the business to. Make this an ongoing activity (we will talk more about this later in the month) and soon you will start to see recommendations coming back to you. Also keep in mind that becoming known for referring is not limited to businesses. Refer individuals to each other and you will see your network of contacts grow and your business increase.
2. Overcome reluctance to ask for referrals:
Admittedly, asking for referrals can be difficult and if this is out of your own or your staff's comfort zone, then it is time you expanded the comfort zone. Reposition asking for referrals from a sales perspective to an opportunity to help the next client. Members of your staff that are focused on service enjoy helping your clients. Take advantage of that mindset. Create a culture that focuses on supporting and helping, rather than selling. Every new referral is an opportunity for another family, business, or individual to get the help and support they desire in satisfying a need. Put the subject of referrals on the team meeting agenda and set the expectation that your employees bring one referral to each meeting. The comfort zone will not expand unless you and your team push out the boundaries of that zone.
3. Create referral relationships:
Identify the market you want to work with, and then foster relationships with professionals or businesses that would naturally result in conversations with their clients, that could in turn result in the recommendation of you or your business. These professionals or businesses can range from attorneys to car dealers to hairdressers. The common denominator is that they must have access to the market you are trying to attract. The relationship must be a two way street. Leverage the fact that you are referring clients their way as well. The relationship should end with prospects being directed to you, rather than you having to ask for a name. Check in often and continue to show your appreciation. The more trustworthy they feel you are, the more likely they will be to continue to direct prospects your
4. Identify when and how to ask for referrals:
To get consistent referrals, you and your staff must be consistent in the approach to asking for referrals. Breakdown your service process and identify where the opportunity lies in asking for the referral. Your satisfied clients can and should be a great source for referrals; you just have to engage them in a conversation that draws out the desired result. When the referral is asked for, it should be asked clearly and definitively. Do not flirt around the issue. An example might be to compliment your client by saying, "You are exactly the sort of client we enjoy serving. You must know others like yourself that could benefit from our services." Your clients may be as uncomfortable giving a referral as you are asking for one. Make it as easy as possible by being direct and to the point. Being direct also shows confidence and pride in your service or abilities. Take the time to create language that distinguishes you from the competition and reinforces your clients experience with your business.
Ultimately, the business has to ask for referrals to get referrals. Create referral language, identify where the opportunities are, foster the necessary relationships and take action to make it happen. The result is qualified, interested leads for your business that come at a fraction of the cost of paid advertising. Entrepreneur and author Bo Bennett has said, "In sales, a referral is the key to the door of resistance." Potential customers that come to your business by referral have already opened the door to a sale. Can your business afford to not ask for referrals and step through the open door?