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The power of referrals

It is a well known truism that the best customer is a happy customer. It follows that the best leads are referrals from happy customers. Referral leads are almost always the best prospects because a recommendation from one customer to another provides credibility, a positive impression and reduces doubt in the prospect's mind. And a bonus for you is that is an incredibly cost-effective means of generating new business!

Some common misconceptions about referrals that I've heard from my clients:

  • Customers don't want to give referrals.
  • You can't plan or influence referral business - it just happens on its own.
  • Advertising and sales requires too much of our attention; there aren't enough resources for a referral process.

The truth is that customers do want to give you referrals. They like to see themselves as an authority, a helper or someone "in the know." And you can plan and influence the amount of referrals in much the same way you do traditional leads. Once you realize the value of referrals, you won't want to take a passive approach.

From the EMyth Point of View, generating a referral is a Lead Generation activity that occurs at the end of your Lead Conversion process.And, since referral leads are typically highly-qualified leads, the process will be simpler and probably more cost-effective than your traditional Lead Generation methods.

Don't be shy

You'll never get referrals unless you ask. Yes, it can be that simple. In fact, asking for referrals can be a natural part of the sales process.

Often the best time to ask is right after you've delivered your product, service or solution and your customer has experienced the value they were expecting — and more. For example, one of my clients simply asked for a referral in the signature line of their confirmation e-mail.

Referrals are important to us. If you know of anyone who would benefit from our services, please contact me. We would appreciate the opportunity to work with them.

By asking your customer for a referral, you are not asking them to take a risk. Instead you are asking them for a factual observation. You're not asking them to qualify or pre-sell the referral; you're simply asking them if they know someone who could benefit like they have.

Treat them like gold

Another key to a continued and successful referral process is to thank and reward those who refer you. Everyone wants to feel acknowledged and appreciated. How you do this depends on your type of business, the image you want to project with your business and the value of each prospect. Many service providers use small cash rewards as a token of appreciation incentive to drive referrals. An alternative could be a bonus such as free additional services, a small gift or a gift certificate to a local restaurant or theater. Remember, generosity needn't always be monetary, be creative in your approach.

The referral, too, needs to be acknowledged and appreciated since they too have the potential to be a ready source of referrals for you. Reciprocating the generosity of referrals is key to keeping the cycle going and building the goodwill and relationships that will help your ongoing Lead Conversions. Your Lead Conversion approach for referrals should be tailored for them.

Get them talking

Satisfied and delighted customers are your unpaid sales force. Along with these you can include family, friends, old classmates and faculty, vendors, suppliers and other service providers who share your target market. Educate these potential advocates about your products and services by providing them with information and news about your business. Encourage them to talk about you and to "spread the word."

Expanding awareness of your company is easier and less expensive today than ever thanks to the Internet and the ever-growing variety of online tools. But don't overlook the power of simple "word-of-mouth." The goal is to get people talking about their wonderful experience with you and your company — and to actively and intentionally send people your way!

Share your story

How have you implemented a referral system into your Lead Conversion process? What worked, what didn't? Post a comment and tell us about it.

EMyth Team

Written by EMyth Team

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