When it comes to client referrals, is this you: “I know it’s important and I just don’t know how to get my clients to refer others to my business??”
As you know, I always say that data and numbers are really important and here’s why **:
- 84% of buyers now kick off their buying process with a referral.
- 9 out of 10 buying decisions are made with peer recommendations.
- 92% of buyers trust referrals from people they know
and then here’s the one that I find absolutely staggering ...
After a positive experience 83% of customers would be happy to provide a referral.
And people are just not asking — SO only 29% of customers end up giving a referral.
What do we do?
“OK, Ingrid, I get it – referrals are important. The thing is I don’t know HOW to do it”
My coaching clients often tell me “I need to get more clients”
When we talk about asking for referrals – most do not know how to do this.
As the data above indicates – most businesses are “hoping” their clients will refer them.
Hope Marketing is not a viable marketing plan
In 2020 this doesn’t work – it’s not enough to have “hope marketing” as your marketing plan.
It’s critical to be active, to have a system, a plan, a process for asking our clients to refer for our business. The data tells us, the numbers tell us!
The benefits of designing and implementing a formal referral program:
- The leads you acquire will trust you more.
- The leads you acquire are more likely to buy from you.
- The leads you acquire are more likely to remain loyal customers.
The 3 steps to follow
Here are the 3 steps to take to generate client referrals in your business
- Design and develop a system to ask for referrals
- Implement the system
- Measure and tweak
It’s simple and yet not easy. Like most things in business – you just need to know HOW!!
If you’d rather listen to me talking you through what you need to do, I covered this on my podcast episode E143 Setting up a Referral System in your business
Or you can continue reading right here in this blog post
The most important ingredient of a successful referral program
Before we get into the 3 steps – One of the key ingredients to a successful referral program is providing exceptional products and services.
When what you offer is outstanding and what you do makes a big impact – people will be more likely to recommend you to others – and often without any type of incentive.
Can you think of a hairdresser, a physiotherapist, a Pilates studio or a vet or another business that you would happily refer others to.
I see it in FB groups all the time: “Looking for recommendations for …” and dozens pf people giving their recommendations.
How would you like to be consistently recommended by your clients when someone asks? What would that mean to your business?
I’ve interviewed business owners for my So You want to Start a Business podcast who have built their entire business on word-of-mouth referrals. This comes from being passionate about the results your clients achieve from your product or service and as one person put it “making people at least 200% happy”
There is something very powerful about being deliberate about the experience you’re providing – whether that is in how your product is delivered or how you provide your service.
What outcome do you want from referral program?
Building a referral program is more than “more sales” – it can be to:
- Build brand awareness for your business
- Increase customer loyalty to your business
- Drive customer acquisition
- Other
When you know what the goal is – then you can measure and tweak.
Step 1 – Design a system to ask for referrals
Here are a few things to consider when it comes to designing a system to ask for referrals …
Create your messaging
What language will use to talk to your existing client to ask for referrals?
What will you say?
When will you say it?
Who says it to which client? Customer? What would happen if, say at a dental practice, everyone asked the same client for referrals during their visit?
Will you ask your existing clients/ customers? OR will you create relationships – with other businesses either physically local or online.
For example: I went to my local café recently and the barista was telling me about a new barber who has opened. They came around and offered everyone 2 cuts for the price of 1 as an introduction.
You can imagine the barista looks good and customers ask and they tell everyone “Oh this is that new barber” – that’s using referrals.
What about Google reviews?
And other social reviews and testimonials – FB and LinkedIn and on your website – these are all forms of referrals.
Do you jump online to read reviews before you make your buying decision?
Research shows – and again I love the data here – the average consumer reads 10 reviews before they begin to trust a business. Think about it this way – positive reviews are a good influence on your potential customer.
Make it easy for your clients to refer you to others
There are different ways to do this – social media of course, emails to your clients, physical collateral – e.g. samples to share
Recently we had our gutters cleaned and the gutter cleaning man gave me 2 business cards – one for me to keep and one for me to give away to someone else who needs gutters cleaned and other handyman tasks.
Will there be rewards?
I know this can be a touchy subject for some business owners – and I absolutely respect that.
Many clients will refer you to others – because as we said earlier you give 200% satisfaction and more. Raving fans is a term used for someone who just Raves about you and is happy to send people in your direction.
Have you ever referred someone to a business and later they send you a “Thank you”?
It can be a lovely surprise – especially if they “get it right.”
I once received a bottle of nice wine for referring a client – and it was a lovely surprise. Wine however, can be risky if someone doesn’t drink.
When it comes to rewards, there are a few things to consider:
(i) What to reward?
Think about your clients – what do they value the most?
A food business – maybe samples of new products or 2 for the price of 3 or free shipping?
B2B company – free credits or free access to a paid feature?
Does your reward make sense for your business? A dentist is not going to send sugary soft drinks or sweets …
Would your reward be monetary or non-monetary? Coupons, gifts, discounts, store credits?
One of my dental clients sends a shopping voucher and a handwritten Thank you note for every referral. For many people the handwritten note is much appreciated.
You’ve probably come across companies which have active campaigns where they offer an incentive for referring someone – “Take $$ or %% off your next purchase when you refer a friend”
(ii) Who gets the reward?
There are 3 ways to look at this:
- One-sided rewards or
- two-sided or double-sided rewards – you may be interested to know that this type of incentive usually has the highest engagement or
- no reward.
Every business is different and every reward system will be as well.
Example: I love what Tesla have done for their rewards program. Example – tour of the factory, access to a specific model release – only for referring customers. Tesla has generated a relentless spirit of evangelism around their vehicles and they have a tiered system of rewards – so many wonderful examples once you start looking into what’s possible and appropriate.
So all of that is Part 1 – Design and develop a system to ask for referrals.
Part 2 – Implement the system ….
Once you’ve figured out what you are going to do the next steps are:
- Set a time frame to implement
- Train all your team
- Create any collateral
- Start talking to clients/ customers
Part 3 – of course it’s all about The Numbers! Measure and tweak ….
Measure the incoming referrals – and track them
For every new client – ask “How did you hear about us?”
When they tell you who – make a note so you can Thank the person who referred you and also so you are tracking which part of your referral system is most effective.
Here is a bonus tip – if the person isn’t coming from a referral – remember according to HubSpot report mentioned earlier and a Nielsen report says “84% of people see referrals as the most trusted and influential form of advertising.”
You have the chance to say something like:
“We find that many of our clients come from being referred by an existing client, in fact about 85% of our new clients come to us this way. People love us and tell their friends … “
You are planting the seed with your new client that referring others to your business is normal.
The way to know what your referral rate is is by tracking and measuring.
Create a spreadsheet or a dashboard or maybe your booking software has the ability to track referral numbers and then it is important to look at them every week or every month – identify any trends.
Where will referrals come from?
Because referrals truly can come from anywhere – a happy client, another local business, maybe even a celebrity endorsement – the key is to harness the referrals into a well-designed system that incentivises and builds customer loyalty – it’s worth the effort.
This is so much more reliable than “throwing spaghetti at the wall” with social media advertising. And again this is where understanding the numbers comes in. If you’re going to spend $25 per day on social media = $175
What could you do with $175 in your business to reward your clients for their referrals?
$175 goes a long way …
The benefits of designing and implementing a formal referral program:
- The leads you acquire will trust you more.
- The leads you acquire are more likely to buy from you.
- The leads you acquire are more likely to remain loyal customers.
What’s happened in the past does equips you for what happens in your future
If you want more clients – if you want more referrals
You truly can have whatever you want.
Get really clear about what you want
Get really clear about what you need to do to get it
Do the work
Stay consistent.
If you want more of your clients to refer your business to others … make the decision, take action, do the work, stay consistent. You can do this!
** This is from the HubSpot 2021 Sales Enablement Report
My guess is you are here because …..
My guess is that you are here because you are a business owner and what you really want – is have a successful business – whatever that means to you.
Maybe that means feeling confident when it comes to talking about the money side of business.
Having a successful business might mean making business decisions with reliable information – facts & data as well as your “gut feel.”
… ultimately you want to do what you do best AND have a successful business AND make a difference.
I’m here to help you.
Everything I do in my business, every decision I make is based on this question:
Will this make a difference? Will this help you, my listener – will this help you to build your business? will this help you to create your successful, viable and robust business so you can achieve Financial Independence?
This is why I do what I do
There are 2 ways you can access all my best material:
I regularly run webinars on a range of money related topics:
- Managing Cash Flow so you never run out of money
- Understanding where your money goes – getting those expenses sorted out
- Understanding the Profit First book
- Pricing – getting it right for your studio
- The things you need to know before signing a commercial lease
- How to make more money
- … and many other topics
If you’d like the replay of any of these recent webinars, please email me ingrid@healthynumbers.com.au and put “Replay” in the subject and let me know which one you’d like to watch. I’ll send you the link to the replay
AND
Read my book! It is a Business 101 and can answer pretty much all your business questions.
This book is designed to help you build your business – whether you are starting from scratch and creating something new or you have been in business for a couple of years and want to build from your foundations.
The book is your step by step guide to building a business smarter and faster.
“So You Want to Start a Business”
Order your copy now from Booktopia, Amazon or Book Depository
It’s so exciting to be sharing it with you.
If you prefer the kindle Head straight to Amazon
Happy reading!
What is your biggest question right now? Let me know – click here.