Everyone appreciates a good recommendation because of its potential to benefit all parties involved. A referral for a business or service is a low cost and effective marketing tool. So how can you utilize referrals to build your business? There are many ways to build a business with referrals, but a few key things deserve special attention for individuals and companies seriously contemplating this strategy.
Be a Business Worth the Referral
While it should go without saying, it’s worth the bullet point to note how important it is to build the business first … before the referrals start flying. Making sure your company can handle new clients is something that should be known long before any referrals are made. Consider that a recent graduate who builds websites for his friends probably won’t (and shouldn’t) be commissioned to redesign Google based on a referral.
Before referrals are made, make sure your company has established itself as one capable and ready. A business’ ready-for-a-referral plan will have a few key aspects:
- A solid business strategy in place, with chain of command and business plan well established
- Professional and knowledgeable staff with solid customer service skills
- Business operations thoroughly set
- Finances in place to accommodate new business
- A solid marketing and customer relations team
You can read more on successful business aspects here:
- Here’s Why Even the Greatest Business Ideas End up Failing, by Feris Rifal
- Where Are the Great Companies?, by Jim Champy
Have a Referral Strategy
Once it’s been established that your business is ready for referrals, it’s time to start making a plan. While being a good business can potentially earn some spontaneous references from customers, if one is really invested in building a business based on referrals, a strategy is needed.
One of the primary ways to get new customers through recommendations is implementing a referral strategy with incentives. It’s not a good idea to simply expect referrals; being proactive is always a better strategy. One way to show businesses you’re interested in referrals is by offering incentives for giving them.
Referral incentives can include:
- Monetary rewards for successfully bringing in clients
- A drawing for cash incentives
- Discounted rates on services
A word of caution: Always follow through with incentives. No one likes false promises! Also, make sure the rewards are something the company can handle.
Market ALL Services to All Clients
Another simple and effective way to get referrals is simply by making sure you market all of your services with new and existing customers. Sometimes a customer may use only some of the services you offer, but that’s no reason for them to remain in the dark about everything your company can do. A staff that is knowledgeable about all the company does and can share that information with clients and customers is a genuine way to get referrals.
Even if a customer doesn’t need a particular service, they may know someone who does. By making them aware, your business may get a mention (especially if the aforementioned solid business plan is in place).
Quid Pro Quo
When it comes to marketing a business by word of mouth, it’s important to acknowledge other businesses as well. To be a company that gets referrals, you want to be a company that gives them in return. Referrals are like anything else in business; it’s a reciprocal process. Be willing to give what you receive.
As with all things in life, it’s important to be grateful and recognize those who are helping your business. Be thankful and generous in your appreciation of those who have stuck their neck out for you. A referral is sign of trust in a business. Don’t let down those who have helped you, and never forget to say thank you.
For more information on referrals and help to get your referral strategy started, follow the links below: