Let’s face it; most people do not like cold calling. While it’s sometimes a necessary tactic in new business development, as an alternative, how about if you let your customers do the talking. In other words, get them to generate the referrals for you! Referrals from existing customers are the greatest source of new business.
Whether you are just starting or have been in business for years, referrals are one of the easiest ways for business growth.
And thanks to social media, loyal customers’ voices have serious reach, giving them the potential to become powerful brand campaigners. You don’t have to be Samsung, Coca-Cola or another high profile company to get attention on social media. You just need a creative strategy and loyal customers who care about your brand.
Some statistical proof that referrals are important:
- In a study of software buying trends, Capterra concluded that peer recommendations outweigh blogs and online media when it comes to researching software options.
- In a Wharton study of referral programs in a Frankfurt based bank, customers who referred their friends were 18% more likely to stick with the bank and generated 16 to 25% higher long-term value than ordinary customers.
- Depending on the industry, a referral business closes and converts nearly 70% of the time.
- In a survey of over 3,000 business people, more than half of the respondents said that they got 70% or more of their customers through referrals.
But how do you generate additional referrals?
A few quick tips:
Be referable: Referrals build a brand’s credibility and trustworthiness. So deliver what you promise and when you promise.
Target your most loyal clients: One important element to remember is that the quality of the referrals you’re getting is directly related to the types of people who are in the periphery of your network. If you continue to wow your customers with your services, it is most likely that they will refer you to their family and friends.
Be accessible: Have a stack of business cards ready to hand out to your customers. If you’ve made a good impression, there are ample chances that those cards will end up in the hands of someone else! Don’t shy away from giving them out at events, meetings, or at other networking events.
Build relationships with others in your industry: Expand your horizons. For e.g. If you work in the medical field, you probably see a lot of other medical professionals. We have heard that an ophthalmologist referring a patient to his friend who is an orthopaedic, which means a referral from a trusted expert can mean a lot!
Provide valuable content: Share good content that you customers can share in their network. Invite them for seminars or webinars on industry topics, research, or articles about latest industry trends, etc.
Reward your clients: Surprise your customers by offering something they didn’t expect. Offer discounts or special offers in exchange for referrals. Showing gratitude will encourage them to keep spreading the word about your brand.
Let your clients know you want to be referred: As per American writer and lecturer, Dale Carnegie, 91% of customers say they’d happily give referrals. Tell your customers that you’re trying to grow your business, and any referrals you can get will be appreciated. Reassure them that you’ll do your level best to keep these new referrals happy.
Lack of referrals
If a customer is reluctant to refer your brand, it could indicate that:
- They don’t intend to stick around long enough to prolong your existing relationship by. The problem could be anything from poor customer service, or product quality.
- That your product/service doesn’t wow them enough to refer their friends to it.
In either situation, your customers’ unwillingness will tell you where you’re going wrong and what you can do to make your approach and brand better.
Lastly, make sure what you serve is good! Your likelihood of building a solid and expanding referral channel is directly linked to your success; and you can achieve it by consistently exceeding customer expectations. You will surely build a loyal network of customers who will keep on coming back, bringing their networks along!