4 Tips To Garner More Referrals

Sophia Belnap

Any successful business understands that customers are its most precious resource. Companies dedicate large portions of their marketing budget every quarter to the effort to attract and obtain new customers. But businesses often make the mistake of not understanding how current clients can be a valuable asset in their pursuit of future customers.

The majority of marketing professionals know that referrals gotten from existing customers lead to more than double the conversion rate of any other form of marketing. Given the value of referrals, becoming skilled in obtaining them is a talent that no business can afford to leave undeveloped. If you want to increase the number of referrals that your business gathers from current customers, here are a few ways to go about it.

Create a Loyal Customer Base First

Before you can solicit referrals from satisfied customers, you need to build a customer base that is loyal to your company. Creating an excellent customer experience is the key to achieving a high net promoter score. Only when consumers are thrilled with your product and your service will they be willing to refer you to friends, family and colleagues. 

Make sure that everyone involved in your business understands that customer service is a priority. Invest in in-depth training for your employees so they become experts in your products and services. Use a good CRM to maintain contact with customers and continue to offer them value after you've made the sale. Set up a well-designed website that offers valuable content to potential and existing customers, and engages with consumers on social media to strengthen your relationship. It can also be valuable to create a customer loyalty program that offers repeat customers perks like discounts, small gifts on their birthdays, and early access to sales and promotional events. Creating a sales process that focuses on serving your customer and exceeding their expectations will create the atmosphere you need to successfully solicit referrals.

Understand When and How To Ask for Referrals

Once you have created a customer experience that encourages referrals, you need to know when and how to ask for one. Many people make the understandable mistake of waiting until after the customer is in possession of the product or the service has been performed to ask for a referral. Although this seems the logical course of action, waiting too long to make your request is a miscalculation.

The best time to request a referral is early in the sales process when your customer is most excited about the product. The prime moment is often at the moment of decision. Once a product is fully in your customer's possession, his or her thoughts are likely to turn to the mundane matters of maintenance or to the need to pay the bill. Ask for a referral at the emotional high point of the interaction.

If your business offers a service, choose a time when the customer is particularly pleased with your work. Again, regardless of how satisfied they are, customers' minds will turn to other things once the job is complete. Request a referral when the excellence of your service is fresh in the client's mind.

Although you never want to create a situation in which the customer feels pressured to give a referral, it is also important to be direct. If the request is too offhand, the client may not grasp the importance of the ask. They may even take the request as casual conversation rather than a call to action. 

Implement a Referral Incentive Program

Clients can have many reasons to refuse to give referrals, most commonly it is a concern that their business associates or friends might have a negative response to it. Regardless of why a customer says no, it is important to not allow the moment to get awkward. Retaining your relationship with this customer is more important than getting a referral at the moment. There are other ways to increase the likelihood of a positive response in the future that will maintain and even strengthen your relationship with existing clients.

Just as your business may have a customer loyalty program, setting up a referral incentive program is a great way to both reward existing customers and gather valuable referrals. To incentivize referrals you might offer clients free or discounted products. You can create invite-only events offering training, product previews or demonstrations. You can partner with other businesses to offer clients other products or services beyond your own that they may find valuable or enjoyable. Regardless of how you structure your program the return on your investment could be well worth the effort.

Offering clients reciprocal referrals is another way to reward them for promoting your business or products. It is likely that the businesses or clients that do business with you are just as aware of the value of referrals as you are. This is an excellent way to offer a high-value and low-cost reward to your clients while reaping the same benefits for your own business.

Offer Your Customers Useful Alternatives

Sometimes, even though they are pleased with your product or service, customers are not comfortable with giving referrals. Rather than risking your professional relationship by pushing for a referral, the better choice may be to offer them a way to promote your business in less direct ways. Offering them an alternative can still have a great deal of value to your business and relieve any feeling of pressure the customer may be feeling.

Some clients may be willing to give a referral in a more anonymous way. You can easily add a referral page to your website where customers can offer names and contact information for businesses or individuals that they believe will benefit from your services or products without leaving their own information. This kind of lead is not as warm as a direct referral, but much better than a cold call. 

For customers who simply are not comfortable directing you to other contacts, your business website should be equipped with a comment section. You can encourage satisfied customers to leave a detailed statement about their experience with your company there. Likewise, you can encourage them to comment on public review sites such as Yelp. Positive reviews placed where like-minded businesses can see them can serve the same purpose as a formal referral.

Finally, you can ask satisfied customers if they would be willing to take part in a case study for your company or for the particular product or service they obtained from you. Marketers understand that a well-crafted case study can be a highly effective tool for your company, more effective than other forms of written content by far. A case study does not require a customer to do anything other than be willing to go on record and talk about how your service or product helped them better their business or their life. 

Referrals are a powerful tool that have a high rate of converting potential customers into paying clients. Although it may be initially uncomfortable to ask for referrals, the benefits and return on investment make overcoming your resistance worthwhile. Make sure your business is taking all the necessary steps to garner customer loyalty as a first step to increase referrals. Next, train yourself and your employees on how and when to ask for referrals. Reward your clients by implementing a referral program and be prepared to offer them a variety of alternatives should they decline the request for referrals. In the event that these strategies don't produce referrals, they may well produce loyal customers and open avenues for additional marketing tools that will benefit your business in the future.