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How to Get More Customer Referrals

You want more business. That’s a no-brainer! But if you’re thinking that the best way to get it is through paid advertising, think again.

The truth is that even in this electronic age, word of mouth advertising is worth its weight in gold. That’s why online reviews are important. 97% of all consumers read online reviews prior to patronizing a business – and most often, they’re reviews from strangers.

Referrals from friends and colleagues carry even more weight. In fact, they convert 30% more often than leads that come from other sources.

That’s why you need to set up a referral program to encourage customers to send their friends to you.

But wait… won’t happy customers just refer their friends as a matter of course?

Some might – but most won’t. You need to ask. So, let’s talk about some simple things you can do to get more customer referrals.

Step #1: Identify Potential Referral Sources

Referrals can come from many places. Before you decide on the parameters of your new referral program, you’ll need to think about who can provide you with the kind of qualified leads you want. Here’s a run-down of the most likely sources:

  1. Existing customers and clients are a great source of referrals. They know you and your products, and that makes them uniquely qualified to point likely customers your way.
  2. Employees are another potential referral source. Like your customers, they know the company and what it does. They can also provide potential leads with detailed information about the benefits of working with you.
  3. Vendors may be a source of referral business. They know what it’s like to work with you. Even if their experience is with a different side of the business than what customers would see, they can still talk about your products and services knowledgeably.
  4. Joint venture partners are another potential source of referrals. These arrangements may have a quid pro quo element to them, but they can be very effective.
  5. Finally, don’t forget your friends and family. Even if they’re not customers, they can still point people in your direction when the opportunity arises.

The techniques you use to attract more referral business are similar regardless of the source you focus on. Now, let’s talk about what to do to attract referrals.

Ask for Referrals

The first and most obvious way to get referrals is to ask for them. A lot of businesses skip this step and they miss out on valuable referrals as a result.

Are you wondering why you need to ask? This statistic might explain it. A study at Texas Tech University found that 83% of consumers were willing to refer acquaintances to a business after a positive experience. But – and here’s the corker – only 29% of them did!

Why the gap? It might have something to do with not being asked.

There are lots of ways to ask for referrals. Here are just a few:

  • Send a follow-up email to customers asking them to refer a friend if they’re satisfied with their experience.
  • Hand out referral cards or business cards to people who visit your business.
  • Attach a small supply of business cards to outgoing correspondence and stick a few business cards into the brochures you give out, too.
  • Touch base with your customers by phone. After verifying that they’re happy with your product or service, ask if they know anybody else who might be interested.

Sometimes the simplest solutions are the best – so don’t forget to ask! And don’t just ask your customers. Put the word out to vendors, employees, friends, and family members, too.

Pinpoint Companies Who Share Your Target Audience

One of the best ways to get referrals is to start with your audience and work from there. In other words – when was the last time you identified local businesses who target the same consumers you do?

Let’s look at a sample audience to illustrate the point: parents with young children. Here are some businesses targeting that audience that might be able to refer customers to one another:

  • A children’s party planning service
  • A martial arts school that offers kids’ classes
  • A toy store
  • A kids’ book store
  • A tutoring service

Those are just a few options, but you can see how quickly an audience-based referral service could grow. Try reaching out to other businesses with the same audience as you and suggest a mutual referral program.

Attract Referrals with Shareable Content

Whether you’re writing a blog post or creating an infographic to share on Pinterest, you should create content with referrals in mind.

Think about it this way. When people share your content, they’re also sharing information about your company – even if only indirectly. Any person who sees your content might be a potential customer.

Create content that provides clear value to the people in your target audience – and then encourage your existing audience to share it. Again, asking is the key. Some people might share your content, but many will only do it if you ask them to.

Incentivize Referrals

In a perfect world, customers, friends, and family would refer you out of the goodness of their hearts. But… we don’t live in a perfect world.

The solution is to give people a reason to give you referrals, something that goes beyond doing a good deed for you or a friend. It’s perfectly acceptable, and even desirable, to incentivize your referral program.

Here’s an example. I knew a factoring company that offered existing clients one month of free factoring if they referred a new client who signed up. That was potentially a big incentive – factoring isn’t cheap! But the owner of that company got a lot of referrals from clients as a result.

If you decide on this type of referral, make sure to specify under what circumstances you’ll pay out the incentive. A small incentive, like a free basic product or a coupon, might go to anyone who offers you contact information, whether the referral comes to fruition or not. But, if you’re offering a big prize, like a bonus or a free service, you might want to require that the referral turns into a customer before issuing the prize.

Referrals are a great way to grow your business…

And they can help you build up a lot of good will with the people around you. Instead of hoping that people will refer new customers to you, go out and make it happen. A coherent, consistent referral program will help you increase your profits.


Other articles in this edition:

What’s the Definition of a GOOD Website?
7 Smart Ways to Grow Your Email List
How to Increase Sales on a Shoestring Budget

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