It's important to know how to get referrals for your business. Few other forms of marketing are as powerful. When people refer you to potential customers, they are vouching for your company. The process reduces the barriers for a prospect to consider what you have to offer, whether the transaction in question is business-to-consumer or business-to-business. The referral acts as an open door based on trust and respect.
Referrals are particularly important for middle market companies that don't have the resources to pour into broad marketing. Even a low-percentage response has the chance to turn into significant sales. Referrals are an avenue that your company can use to outmaneuver larger competitors and attract a growing customer base.
There is just one problem: Many companies don't get their fair share of referrals, no matter how much they would like them, because customers always have their own concerns outside of assisting in your marketing goals. It doesn't mean, however, that customers wouldn't give a positive referral, but waiting to be asked to the dance sometimes isn't enough. Here are a number of steps you can take to increase the possibility of getting a referral.
Ask, and make it easy. Perhaps the most important factor in getting referrals is simply to ask for them. Customers have their own lives to consider and won't typically go out of their way to recommend a company unless someone specifically asks them for a referral. Have a method handy that allows a quick and easy referral, whether in electronic or paper form.
Provide a great customer experience. People are willing to talk to others about a company under one of two conditions: Either the company did a horrible job and the person is warning off colleagues, friends, or family, or the company did a wonderful job and the person passes on the good news. Anywhere in the middle, and customers are unlikely to go out of their way to mention you at all.
Clearly, you should delight customers in order to increase your chance of positive referrals. You can achieve delightful customer responses by first investigating exactly how your products and services affect your customers. Useful opinions can typically be found through the use of customer survey forms and interviews. The most relevant information can then be fed back to operations, design, customer service, and other departments to improve any weak areas.
Solve people's problems. Ironically, one of the best ways to get positive referrals is through the correcting of mistakes. Although a mistake can result in negative referrals, correcting a mistake to the customer's satisfaction in a timely way can have the opposite effect, turning the interaction into a positive one and producing positive referrals as a result. Obviously you don't want to create problems, but they do provide an opportunity. Your customer service department must have a process to actively and quickly address problems.
Work with social media. Social media allow customers to communicate with your company and with their peers about your company. Using social media is a long game, which means you don't get referrals immediately. Instead, you develop relationships with customers and prospects by providing expertise and information that makes you a trusted source. At the same time, you can also build social links into your online presence. If someone has just purchased a product, offer the opportunity to post something on leading social media channels.
Mine your CRM system. Customer relationship management (CRM) software gives you many ways to grow your connections with customers. One of the benefits, depending on how well you've implemented and used the system and collected information, is to track the history of a customer with your company and be aware of whom they are connected to. If you're trying to make more sales in a certain industry or to a specific company, check the CRM system for customers who have had positive experiences with your firm and who have the appropriate connections, then ask their advice for how to expand. You will likely either get a referral or information that should prove valuable in marketing.
Reviews are referrals. Customer review systems are becoming popular, whether as part of a platform (such as the one used by Amazon.com) or in third-party systems (Yelp, for example) in which people can leave feedback about a company. Pay attention, because these reviews can act as referrals, whether negative or positive. When people leave negative reviews, respond and take care of the problem, giving you the chance to turn a harsh word into a kind one.
Use case studies. Case studies are stories in which a company overcomes a difficulty, often by making use of a specific tool. Using case studies is not only a good way to get referrals but also a way to reach potential customers, either by arranging coverage from a media outlet or by making copies of a case study available to prospects.
Have a reference list. It is astonishing to see the number of companies that have a number of happy customers but still lack a comprehensive reference list. When customers agree to provide a referral, see if they are open to allowing others to contact them. You will likely want to rotate references so that no one becomes resentful over a high number of contacts from strangers.
Network with professional and business organizations. From industry groups to the local chamber of commerce, memberships can open doors. To succeed, however, potential customers must also be members, and your company must be active in these groups. The better known and respected that your representatives are, the greater the chance that you will receive referrals.
These are just some examples of how to get referrals, and there are many more. All it takes is some strategic planning and some regular effort. Put in the time and work, and you will eventually get marketing assistance from your clients.
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Erik Sherman is an NCMM contributor and author whose work has appeared in such publications as The Wall Street Journal The New York Times Magazine Newsweek, the Financial Times Chief Executive Inc., and Fortune. He also blogs for CBS MoneyWatch. Sherman has extensive experience in corporate communications consulting and is the author or co-author of 10 books. Follow him on Twitter.