Get More Clients by Developing a Referral System

Of all the marketing methods that work to increase sales, none is ever more effective than “word of mouth”. And it’s easy and costs nothing. So how do you get referrals?

When I owned a very successful restaurant in New York, we went out of our way to get customer referrals. We rewarded people for “gossiping” about our restaurant and we had a formal rewards-for-referrals program. And referrals continue to be very important in my coaching business. Do you have a formal referral system, or are you leaving it to chance as most small and solo business owners do? You are sitting on a goldmine of new clients and you don’t even know it!

When someone you know or trust refers you to a business, you immediately become a warm prospect for that business. You probably wouldn’t have received a referral if you hadn’t expressed a need that prompted the referral in the first place. We all know this, but many small business owners fail to ask for referrals from their clients and subscribers because they don’t have a system in place and so they just plain forget.

If you develop a clear referral plan and system here’s what will happen:

  • the number of warm leads coming into your business will increase significantly
  • your marketing costs will be reduced
  • your conversion ratio–converting prospects into customers–will increase a lot
  • profits up, costs down!

Remember that it took a lot of your hard work, time and money to get each client you currently have. Why not greatly increase the value of that client through the referrals they provide.

So, what is a referral plan and how does it work?  

  • When to ask 

First you must decide when you will ask clients for referrals. You should ask them at the point when they experience the highest level of trust and satisfaction with your product/service. If you’re selling a tangible product, you might want to ask at the time of sale. If you’re selling information or knowledge, you might want to wait until the client has experienced working with you or your material and is convinced it has real value. Then continue to ask for referrals on a regular basis. if you’re keeping in touch with your database. 

  • How to ask

There are many ways to ask for referrals—through e-mail, direct mail, by phone or in person. One of my favorite ways is the 3-in-1 Survey. Create a simple Customer Satisfaction survey. At the end of the survey ask if that person would recommend you and if they know anyone who has a similar problem or need to the one that prompted them to hire you. Then ask if you can use their answers as a testimonial. Survey-Referral-Testimonial: 3-in-1.

Find a way to ask that works best for your business and then make it a HABIT! Make sure you ask every happy client.

  • What to do when you get a referral 

Track your referrals. You’ll want to know who gives you a referral and if they’ve become a client. If someone consistently gives you referrals who never convert you might gently tell them more specifically the specific kind of person you’re looking for—your ideal clients.  Follow up methodically with all referrals and inform your client of the results.

  • Referral motivation plan 

In order to motivate clients and prospects to send referrals it’s important to offer an incentive. Give them something of value for sending a referral--a coupon, a gift certificate, a free product or service. Then send them a thank you note. This is crucial. Even if the referral doesn’t become a client you need to thank them. Then if the referral does become a client, send them a small gift. The more clients they generate, the bigger the gift. People need to feel that they are valued and appreciated for their efforts to promote your business.

Make this a system that works automatically and you’ll have a nice new stream of leads.

1 Comment
  • Karen
    Posted at 15:03h, 23 October Reply

    Awesome ideas!

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