Transform Your Sales Process with Referrals

Published on April 27, 2012 by Tracey Fieber

If you don’t already have a referral system in place in your business, it’s time to set one up. And if you have a referral system that isn’t leading to many actual referrals, it’s time to rethink the mechanics of that system.

For small-business owners, referrals are one of the most powerful tools for increasing revenue without expending very much effort or (or very many marketing dollars). Here’s a look at how you can set up your referral system to attract more ideal clients to your business—easily.

Referral Techniques that Work

A referral works well because it yields a win-win situation: you win by getting in touch with a new ideal client, and your new client wins by getting in touch with you, the person who can solve his or her problems, without searching.

The secret to creating such situations is to make them win-win-wins, meaning that your existing client (who does the referring) also gets something out of the transaction. Here are some suggestions.

  • Establish discounts or bonuses. When existing clients know that they will receive a tangible reward for connecting you with a new client, they’ll be more likely to make the effort. Consider offering a discount on future services, a free “upgrade,” a bonus service or product, or any other enticement that makes sense for you and shows your appreciation to your clients. Remember, any money you “lose” on such offers is likely more than compensated in the money you saved from not having to advertise to land your referral client.
  • Send thank-you notes or gifts. Even if you offer a business-related bonus, it’s a nice gesture to demonstrate that you appreciate that your client went the extra mile for you. Thank-you notes will never go out of style, and warm, personal touches are always a nice way to show your clients how much you value their business.
  • Make referrals effortless. If you ask offhand whether a client might be able to refer anyone to you, chances are you won’t get great results. But if you’re prepared with a document that includes specific questions (e.g. “Do you know anyone who could use help training new hires?”) and has a place to enter a referral’s contact information, you raise those chances significantly. Take some time to prepare your referral material so that it takes almost no effort on your clients’ part to complete it.
  • Establish an action plan for referral follow-ups. It’s important to know what you’ll do when you get referrals. Contacting them promptly is essential, as is following up with both the referral and your existing client. Sitting too long on such recommendations could lead to confusion and might even cost you a sale.

Even in the age of the Internet—and perhaps more so now than ever—we still rely on word-of-mouth communication to inform many of our purchasing decisions.

Channel this powerful force to build your business by introducing or beefing up a referral system in your business!

Published in Business