Let’s say you have a small business in Orlando with a good product or service that people want and need. You know that you can compete in the marketplace because you offer your customers quality merchandise at a fair price. The question is: how are you going to attract the clientele you need so that your business can prosper and grow?
Well, you can always advertise. Most businesses do. But advertising is a hit or miss affair. It’s sort of like shooting buckshot into the air in order to bring down a moving target. Your aim is wide, and only if you’re lucky, will you hit something. Also, advertising is expensive and the truth is, your competitors are advertising, as well, so you don’t necessarily have an advantage over them in that arena.
What you need is a good rifle that lets you aim at a more precise target. Well, the fact is, you actually have that sort of firearm at your disposal. It’s called a referral. In fact, a referral is actually the best weapon you can have to help you grow your business. An effective referral system, if implemented well, is consistently the lowest cost form of marketing any business can employ to increase sales, boost opportunities and augment profits.And that puts you way ahead of your competition.
The Power of Referrals
Why are referrals so powerful? Because they come from a credible third party who knows you, and has experienced, first-hand, the benefits of doing business with you. And, by the way, referrals are different from word-of-mouth advertising. Word-of-mouth happens when one of your customers or friends mentions your business in the course of a casual conversation. It’s helpful, but it’s not intentional and it’s not planned. So, while it’s lucky when it does happen, word-of-mouth is not something that you can rely on over the long haul.
A referral system, on the other hand, is a process that you proactively put in place to capture qualified leads and prospects through your association with other people. Who are those people? They’re your clients, your colleagues, your business associates, your networking group(s), your friends and your family. And because you understand that it is a disciplined, rather than a scattershot approach, if followed methodically, a good referral system will produce predictable and measurable results.
Putting Your System in Place
Once you have decided to put your referral system in place, you need to make it a major component of your marketing program and an integral part of your sales routine. Here are some tips to get you on your way:
- Create a Referral Target Market List – First, make a list of the companies and people you think can be motivated to refer potential clients your way. This will always include your past and current clients and customers, as well as your closest professional associates. Then identify your ideal referral clients and concentrate on them, knowing that some people are just more likely to give out referrals than others. You will need to cull them from your broader universe of contacts, so that you’re not out there begging everyone you meet for referrals.
- Work on Your Referral Message – Just as you likely have crafted a 30 second “elevator speech,” you need to create a referral message. What is a referral message? It’s a precise explanation that lets your preferred associates know exactly what your company has to offer anyone whom they might recommend you contact. It’s a way to educate your referral sources by pinpointing the type of customers you are seeking. Doing so will help to increase both the number and quality of the referrals they give you.
- Create a Referral Conversion Strategy – Map out how you intend to convert your referral leads into new clients. If you are slipshod in marketing to the leads you get from your referral sources, the word will get back to them, and your sources may dry up. So make sure that your sales process meets the high expectations that you, your leads, and your sources expect.
- Keep Your Referral Sources Motivated – Keeping your referral sources motivated is important if you want to keep the pipeline open. Always communicate with them about any contacts you have made with a referral and let them know that you appreciate their support of your business. But the best way to keep your sources motivated is to return the favor often. When you help another businessperson build his or her business, you’re cultivating a long-term relationship with someone who’s particularly motivated to re-return the favor by bringing business back to you.
When to Ask for a Referral
When asking for a referral from a customer, the best time to do so is usually right when that customer is buying from you. You’ve just closed a deal. Presumably, your customer is happy with you and what you are offering, or he or she would not have consummated the contract. This would certainly be a good time to ask if that customer knows a few other people who might be interested in hearing from you.
In fact, any time one of your clients says anything positive about your business is a good time to ask for a referral. That’s because they are psychologically primed to spread the good feeling they are experiencing to others. Don’t let those moments slip by.
And by the way, it’s even worthwhile to ask for a referral from someone who has just turned you down. It’s true. The fact is, you’ve got nothing to lose and most people actually feel bad when they have declined an offer from a personable business professional. Giving you a referral is a way in which they can soften the blow and make up for feeling a little guilty about not doing business with you. You’d be surprised how often you can get a referral from someone you might never speak with again.
You should also have a way in which to systematically ask for referrals from your networking group(s), each time it meets. The people in your group(s) are the business colleagues that know you best, and most of the time, they will be your most reliable and important referral sources. But in order to keep them thinking of you, you need to show up at meetings and be prepared to offer as many referrals as you can, in return.
It’s Good to Be Nice, but it’s Better to Be Reliable
Every business, especially a small, entrepreneurial or professional one, needs a powerful referral network and a working referral system in order to grow sales and increase business opportunities. That means you need to be visible in your community, proactive in your business affairs, and generous with your time and expertise.
You also need to develop the necessary skills, such as the ones outlined above, and be consistent about putting them into practice. Being a nice person is a good start, but it’s not enough. The people whom you rely on to give you referrals want to make sure that there is a valid business reason to do so. Once you involve other individuals, you are now responsible for their reputations, as well as your own. So following through with your systematic approach is an essential obligation. Be reliable and professional at all times, and your powerful referral network will grow and prosper along with your business.
