Practical Referral Strategies

As follow up to my earlier Hub on getting referrals, I’m writing additional, practical tips to get that much needed referrals. Remember, there are two different segments in your business – maintaining customers and recruiting new customers.

In fact, referral is one of the most undervalued competitive advantages among small business owners. Worst, most companies do not have referral strategies at all to help develop new business ventures and target new leads.

Try to change your game plan and learn additional tricks to get referrals without spending too much time and money. Of course, you still to need spend some money to get referrals like free lunch, conference fees, discounts, giveaways, and additional phone expenses to monitor closely your targets.

Satisfy Customer First Before Asking for Referrals

Do not expect your angry customers to refer some of their trusted friends and esteemed colleagues to avail your products or services. That is obviously absurd and very damaging to the business! Negative word-of-mouth publicity is easily remembered than good ones. Instead, shift your priority to what is really essential, that is to deliver superior customer experience. In the long run, this will encourage customers to continue patronizing your offerings and later refer some people you can contact.

Build a database of your customers so you can easily identify your avid followers and those customers interested only during the sale season. You can download some free software online if you do not have any established system yet. Begin this process as early as now. It will be very difficult to do these tasks once the company gets bigger.

In some cases, satisfied customers often make the referrals without you asking for it. This means less work and expenses on your side. Stick to satisfying these types of customers and they will do the work for you!

Still, it will help a lot if you will ask properly your loyal customers for referrals. As human beings, our concern is ourselves first before others. Also, consider that your timing is appropriate. Some customers like to refer but when they are not in good mood, do not expect you will get any referral at all.

Getting rejections is very common every time you ask for referrals. Do not be discouraged and continue to ask around. Accept the fact that some people do not really want to share their experiences to others or simply very private about their personal lives.

If the referred person becomes interested with your products and services, contact the one who referred him or her to you and say thank you or send some small gift. If you have extra money, treat them or offer some discounts on their next purchase.

This is like hitting two birds with one stone. Your existing customer will feel special for you take time to say thanks and it will encourage him or her to refer more people to you!

Develop a Referral Program

Money and other non-cash rewards are good motivators for referrals. This is the part where you incorporate referrals in your marketing strategies. You can do this both online and offline.

A good example of online referral strategy is Amazon’s Affiliate Marketing Program. Notice the ads on the side about different books related to this topic? If one of click this link and buy a book at Amazon, a portion of the revenue is shared with me. All I have to do is post in my Hubs or blogs and wait for interested buyers. The same concept is true for Google Adsense or the ads shown above this Hub.

While this method can easily increase awareness, the quality of leads might not be a high as the offline referrals made by satisfied customers. Some might check these links out of curiosity but does not need the product. In short, you need to carefully filter your subjects and validate if they are really potential clients. Otherwise, you will be spending money with no profitable returns.

Involve your employees in this referral program even if they are not in the sales or marketing department. The upside is they know the product well and some can act as your regular sales agents.

Make sure you generate some hype over your referral program. Send emails and even snail mails to all your subscribing members explaining the mechanics and the rewards to be given. In addition, create a link of this referral program to all your email correspondences.

Tapping the Entire Supply Chain

The key to effective referral gathering is leaving no stone unturned. Look for unfamiliar areas like your own business system such as suppliers and partner banks. They might know some other groups or people interested in your products. Leverage your strong ties to get additional referrals from them.

Conferences and Seminars

Networking is very evident in conventions, conferences, and seminars. Do not spend some money to these events for its benefits surely outweigh any expenses you will incur. After a seminar, names and contact numbers of attendees are shared to the group so they can continue to share some lessons and promote their respective businesses at the same time.

These seminars need not be related to your businesses. This might be an outreach program, chambers of commerce, sports groups, and religious groups among others.