The Secrets of Getting Your Clients To Refer You New Business

According to guerrilla marketing guru Jay Conrad Levinson, it costs you 6 times more to sell something to a new customer than to an existing customer.  Regardless of your business, continuing to rely on new customers to support you is an extremely expensive endeavor, one you don’t even need to take part in.  There truly is a better way, one which not only saves you a fortune in customer acquisition, but improves your reputation at the very same time.

The easiest, least expensive and most effective way to get more customers like those you value most, are to get the ones you value most to get them for you.

But how?

Follow the guidelines below and you’ll soon turn your best customers into your best salespeople!

The First Rule of Referrals

Right now, your very best customers are probably already referring you more customers on an irregular basis.  Even better, these referrals are quite likely to be very similar to your best customers in several ways: similar interests, desires and buying habits.  If you truly want more of this type of customer, you have to revere what you do and really believe that you are providing a beneficial product or service that improves the lives of your customers.  If you don’t believe that, why should someone else?

4 Easy Steps For Building A Custom Referral System

1. Let your best customers know how much you enjoy doing business with them and their importance to the success of your business. Tell them you realize they probably spend their time with other people who share their same values and qualities.
2. Let these same customers know that you’d prefer their referrals over any other source of customers or clients.
3. Next, help these customers understand exactly what kind of people or businesses they know that would benefit from your products or services and how they’d benefit from doing business with you.  Be specific and help them see a clear picture of who they know that they could refer.
4. Lastly, extend to them a risk-free, no obligation offer to their referral.  Let them know that you’ll consult with their referral without expectation of purchase so as to advise them of the best solutions to their needs.

Revere the benefits you provide for your customers, follow these steps with each of your best customers and very soon, you’ll have a healthy stream of new, happy customers enjoying the products and services you offer.

3 Ways To Make Your Referral System Even More Powerful

While the steps above will earn you plenty of new referrals, there are a few other ways to increase the power of your referral systems.  Here are three:

1. Offer a Special Incentive – Provide a discount, special bonus, free sample or some other gift to your customers for referring their family, friends or other businesses.  You can also a reduced rate available only to those who are referred to you.  Your customers are even more likely to refer people if they can approach them with an insider’s deal available strictly through their referral.
2. Organize a Preferred Customer’s Club – Open your business at special hours or invite special guests to speak to exclusive members, say those who are most active in your referral system.  Allow your referrers to invite guests of their own, thereby expanding your referral network. 
3. Try More Than One System – Brainstorm different ways to generate referrals, then rank each one by likelihood of actually getting referrals.  Then once you have established one system, go ahead and implement another, then another.  There is no limit to how many referral systems you employ.  If one doesn’t work as planned, get rid of it and replace it with another. 

Over the next week or two, call five or ten of your best customers and tell them how much you appreciate their business.  Take them to lunch or organize a get together.  Let them know you’re trying to find more great customers just like them and that with their help, it would really improve your business and allow you to provide them with even better products or service. 

Remember, the customers that are referred to you will buy more and more often than a customer you gained through advertising or some other marketing effort.  They’ll also refer more customers and buy from you for a longer period of time.  The benefits of taking the time and putting in the effort to build your custom referral systems are endless.  Don’t let the opportunities of building these systems into your marketing plan pass you by.

6 Action Steps You Can Take Right Now To Get Referrals

Setting up your referral systems is not enough. Like everything else in life, success depends on action.  To get you started, here are 6 action steps you can take right now to start getting referrals today.

1. Make a list of the names of your ten best customers
2. Contact each person on your list and ask them to recommend you to their friends, family, etc.
3. Offer an incentive to those customers who send you a referral
4. Ask other business owners and professionals to recommend you to their customers
5. Offer special discounts or other incentives to businesses that send you referrals
6. Use holidays as a time to offer special incentives for giving you referrals

Use this promotional calendar (PDF) to pinpoint holidays and special events you can use to ask your customers to send referrals or to create special events.  Once you look over this promotional calendar, you’ll see the truly wide-ranging and great deal of occurrences you have an opportunity to ask your best customers to refer business to you or to create special events to create preferred customer clubs.  The only limitation is your imagination.

6 Tips For Optimizing Your Referral Systems

Now that you’ve got your referral systems set up and have taken some time to ask your best customers to recommend their family, friends and other businesses to you, then next thing you’ll want to do is optimize your systems for best performance.  Answer the following questions as thoroughly as possible to maximize the benefits of your referral systems.

1. Who are your ideal prospects?  What type of customers would you like to have many more of?
2. What benefits do your ideal prospects want or need?
3. What does your competition provide that you don’t and what do they do better and worse than you?
4. What benefits do you provide and what things do you do better and worse than your competition?
5. What problems do your ideal prospects have that are not being met and how can you help them solve them?
6. What are your goals and how can more of your ideal prospects help you accomplish them?

The key to making these questions work for you is to answer them as completely as possible.  Use as many specifics as you can think of, then take a break and come back and add as many more specifics as you can.  Once you’ve answered these questions to the best of your ability, you’re ready to turn your referral systems into massive rewards.

To help you answer these questions, use these guidelines to get your mind in the habit of thinking specifically.

1. What are the demographics of your ideal prospects?
• Income
• Financial Worth
• Gender
• Type of Business
• Marital Status
• Age
• Ethnic Group
• Geographic Region
• Hobbies
• Political Views
• Religion
• Memberships in Associations/Groups
• Automobile Type
• Magazine/Newspaper Subscriptions
• Type of Investments
• Physical Health
• Mental Health
• Buying Preferences
• Alcohol/Smoker
• Other
2. Who can refer these prospects to you?
• Your vendors
• Your customers
• Your employees
• Your competitors
• Your relatives
• Your prospects
• Your unconverted prospects
• Your neighbors and friends
• Your church members
• Your association members
• Other businesses and professionals in your area
• Other businesses and professionals outside your area
• Leaders/celebrities your prospects respect or trust
• Magazine/newspaper editors and writers
• Special interest groups
• Businesses your prospects do business with before and after doing business with you
3. Prepare for getting referrals.
• Make sure you have a valuable product or service
• Revere what you do
• Reposition yourself to stand out from your competitors
• Show interest in other people
• Educate prospects why your products or services are of better value
• Be professional
• Thank referrers and referrals
• Explain why your customers should give you referrals
• Make giving you referrals a condition of doing business with you
• Give incentives for referrals
• Have referrers call or directly contact referrals
• Keep in constant contact with people who have provided referrals
• Ask for referrals
4. Help your best customers locate referrals for you by asking them who they know who fits the descriptions above.  Referrals will usually come from one of two groups:

1. Group 1 – People They Interact With on a Regular Basis
• Current and past vendors
• Current and past customers
• Current and past employees
• Current and past competitors
• Relatives
• Prospects
• Unconverted prospects
• Neighbors
• Church members
• Association members
• Other businesses and professionals in your area
• Other businesses and professionals outside your area
• Community leaders
• Special interest groups
• Friends
2. Group 2 – People Certain Events Remind Them Of
• People that come in their office
• People they meet in their professional circle
• Someone who is retiring
• Someone who is getting married
• Someone who is having a child
• Someone who is getting a divorce
• Someone who has bought something (house, car, boat, etc.)
• Someone who has sold something
• Someone who has moved
• Someone whose children have moved
• Someone who has had a death in the family

Referrals are by far the best way to increase your business, and with the ideas and guidelines above, you’re well on your way to starting some successful referral systems for your business. 

Need a little help to get started? 

Bonus Tips To Help You Get Started Right Now

Some effective techniques for securing your first referrals:

• Write satisfied customers a letter telling them you are about to make a major marketing effort for new customers, but before you take it to the public you’d like them to have first chance to tell their friends/family/associates
• Offer incentives to customers for bringing you referrals
• Offer incentives to their referrals on their first purchase
• Offer to perform a free service or consultation for any referral prospect
• Provide clinics, seminars or training sessions for your customers and their invited guests
• Offer free service for one month to your referrals as a gift from the referrer

These ideas are sure to get a few new “best customer” types in your door in a hurry, but if you’re ready to take your referral systems to the next level, we’ve included one last section for the bold.  Or perhaps you’re out of customers to ask for referrals, or you’re a new business and didn’t have many to start with.  If this is the case, follow the advanced tips below and you’ll see just how powerful a custom referral system for your small business can be.

Advanced Referral Technique

Whether you’re the type to really take action or simply don’t have any customer left (or any to start with) to ask for referrals, there’s still one more great way to get your custom referral system off the ground and new business in the door.  You might be wondering how you can ask for referrals without customers and the answer is actually quite obvious:  go to complimentary businesses in your area (or even outside) who don’t compete with you directly and persuade them to allow you to send a letter to their customers, written on their letterhead and signed by them, making a preferential offer to them as a reward for their valued service.

How do you go about convincing another business owner to take this seemingly odd action in your favor?  You’ve got four options, depending on your situation:

1. If you’ve got customers of your own, you agree to reciprocate and endorse them to your customers.
2. Whether you have customers of your own or not, you can offer to rent their list for a fee.
3. You can trade your products or services to them for the right to mail an offer to their list.
4. Even if you don’t have customers of your own, you can offer them a percentage of the business that is created from the mailing.

This may all sound confusing at first, but hopefully you can begin to see the power a custom referral system can have on the future of your business.  Even if you’re just starting up, you can use one of the ideas above to get your very first customers and grow from there.  Maybe your business is stagnant and you need a boost.  Implement one of the ideas above and inject new life into your business with a very small investment you can control. 

Don’t Procrastinate, Get Started On Your Referral System Today

With the information provided in this article, you should be able to quickly and easily start your very own successful referral systems within a week and start enjoying a flood of new customers within a month.  Remember, the most important things to keep in mind are to revere your products and services, to truly believe you are offering a valuable benefit to your customers and to actively ask them for their referrals so that you can provide the same level of service to their family, friends and associates.  Then once you’ve got your first referral system in place, start another and another until you are happy with the amount of new customers you are getting. 

What other techniques have you used to earn referrals for your business?  If there’s something we’ve left out here, please leave a comment so that we can add more resources and ideas to this guide to share with others and help them grow their business.

How To Lead People The Way They Want To Be Led

“Managing Without Authority” was the hot topic at the 9th CCWN Business Connection workshop last night at The Clubhouse in San Luis Obispo.  A group of over 30 local business women got together over dinner to discuss everything from the latest in home culinary technology and tips on today’s most effective business attire to new ideas on leading groups of people towards a common goal.

To lead things off, Amy O’Kane displayed her passion for handmade handbags and accessories, custom-made for your next special occasion.  She was followed by Pampered Chef consultant, Mary Anne Duarozan and Tess Krukow of Equilibrium Club Fitness.

After the initial introductions, guest speaker Patricia Borgardt of Mobility Therapy in Grover Beach took the floor and educated the audience on the virtues of developing a leadership strategy that earns the best from others instead of demanding it. She spoke on topics such as opportunities to influence people and how to spot the best members for a winning coalition and made an excellent case for giving up power instead of abusing it.

Interesting Notes:

9 Faces of Leadership

1. Charisma – A leader must be able to earn the respect of his or her followers.  Natural born charisma goes a long way towards reaching this goal.

2. Individual Consideration – Good leaders recognize and acknowledge the accomplishments of the individuals around them.

3. Intellectual Stimulation – Great leaders are also adept at stirring the intellectual curiosity in others, thereby maximizing their contributions.

4. Courage – All people, especially leaders, must make hard decisions in life.  Good leaders make these decisions with confidence.

5. Dependability – People will only believe in you so far.  If you don’t follow through on your word, you can’t expect the people you lead to either.

6. Flexibility – One of the best traits of a leader is being able to listen to the good advice from those they surround themselves with.  Build a gameplan, and adjust accordingly.

7. Integrity – Leaders are the moral compass of their organizations.  With a leader lacking character in charge, don’t expect that organization to go far.

8. Judgment – In business, hundreds of decisions need to be made each day.  More often than not, the person calling the shots needs to have make good judgment calls to succeed.

9. Respect For Others – Just because you are in charge, doesn’t make you more important.  Embrace diversity and you’ll excel.

Leadership Strategies

1. Empower Yourself – To be a leader, you must assume the position of leader.

2. Share The Vision – Your vision and follow through are key components of your leadership.  Help people buy into your vision by sharing it with them.

3. Build The Team – Few organizations get far without a solid team behind the scenes.  Use your skills to find the right people for the right jobs.

4. Determine Boundaries – Let everyone know exactly what you expect from them.  Set defined goals for each member of the team.

5. Emphasize Benefits – Every job has benefits.  It’s up to you to show your team what they will get from doing a good job.

6. Use The Word “We” – No one wants to work for a dictator.  Share responsibilities and rewards with your team and make sure they know they are a part of it.

7. Celebrate Victories – How can you expect to succeed if you aren’t prepared.  Keep a cold bottle of bubbly on hand for even small successes.

To end the evening, Sabrina Haggie of Bella Image Consulting gave her expert advice on how to dress for success in today’s marketplace.  Though directed towards a female audience, putting more thought into what we wear to work is sound advice for all of us.

Thanks again to Jacky Lopez for a terrific evening and all the speakers for another successful business networking event.

SLO Business Owners: Learn To Harness The Power of Social Media

Our good friend Jacky over at the Central Coast Women’s Network has been working her butt off creating events to help local business owners network and grow their businesses and she’s at it again.  Tonight, Monday, 6, 2009, at the KCBX Training Center on 4100 Vachell Lane in San Luis Obispo, Jacky is providing a workshop for those of you interested in learning about social media and how it can help you grow your business.

Mainly focusing on leveraging Facebook and LinkedIn, this 2.5 hour workshop will go over ways to help you increase sales and improve customer loyalty.

Some of the things you’ll learn are:

* How to set up Groups and Pages for your business

* How to brand your profile

* How to manage and share your posts

* How to search for contacts to promote yourself, your products and your services

* How to create discussions about your products and services

* How to upload and share files, including pictures and videos

* How to bring your groups and events together on Facebook and LinkedIn

The cost to participate in this workshop is $45 for members and $55 for non-members and all Prevail PR clients get the member discount.  If you’re looking for new ways to grow your business without spending a fortune, this workshop is for you.  Join us tonight from 5:00 p.m. to 8 p.m. and start putting the power of social media to work for you tomorrow.

25 Marketing Tips To Grow Through Lean Times

While there is no such thing as the perfect marketing plan, there are some things you can do to continue growing, even during a sluggish economy.  Instead of throwing your hard-earned profits away on expensive display ads, implement as many of these 25 recession-proofing tips as possible and watch your sales grow overnight.

Tip #1 – Work Your Past & Current Customer Lists: Depending on your business, it cost you tens to hundreds of dollars for each of the names on your customer list.  Combine this with the fact that the easiest sales you can make are those to your past customers, and this tip alone can help you get more sales today.

Create a special offer just for the customers on your list and send it out.  Be sure to include a call to action!

Tip #2 – Eliminate Your Ineffective Advertising: Ineffective ads are one of the quickest ways to sap your company’s cash.  Try some of these tips to improve your ads, hire someone to help or give them up altogether.

Test your ads immediately and focus on understanding your perfect customer.  By knowing exactly who these people are, you will have a better idea of which publications and media to place your ads.

Tip #3 – Follow Up On Your Offers: After each offer you send out, simply follow up with a phone call or email to see if the prospect received your offer.  Use this opportunity to provide some free advice instead of putting all the pressure on the prospect to make a purchase.

The phone can be your best friend.  Try to call 5 or 10 prospects a day to offer your advice.  Thank you letters are also a great way to keep in contact with your customers.

Tip #4 – Keep Following Up With Your Prospects: After each and every contact with a prospect, it is wise to make some effort to follow up.  Whether they have come into your store, sent you an email or called your office, get back to them as soon as possible to thank them for their interest.

Create processes for following up with prospects and customers.  This will save you time and energy and systematically help you follow up with everyone.

Tip #5 – Use Risk Reversal In Your Offers: In all transactions, someone has to assume the risk.  Typically the risk is placed upon the consumer, but watch your sales grow by taking the risk upon yourself instead.

Test out different risk reversal ideas with some of your best customers and see which ones they prefer.  Then roll these ideas out to all your prospects.

Tip #6 – Upsell After Each Of Your Sales: Any business can benefit from upselling.  In fact, sales often increase more than 30% just by asking someone who has just bought from you if they’d like to buy another complimentary product or service.

Create products or services you can upsell at the point of purchase if you don’t already have any.  You can also look into selling someone else’s products or services and earn a commission.

Tip #7 – Sell To Your Buyers Again: After you’ve made the sale, send another offer within the next three weeks.  A good percentage will buy again and you’ll develop a closer relationship with the rest.

Make your follow-up offers work for you.  Use this contact to allay buyer’s remorse, solicit referrals and include information that will help your customers use your products or services better and more often.

Tip #8 – Increase Your Profits With Endorsements: If you are doing you’re job right, your clients and vendors appreciate and trust doing business with you.  You can help them even more by endorsing other products or services that would improve their lives. You can also find other businesses that might be interested in endorsing your services to their lists.  Either way, work out a revenue agreement and enjoy the profits.

Look at the services you already use and trust and ask them if you can set up an endorsement campaign.  Handle as much of the work as possible so they can just collect their money and you’ll have a winning long-term deal.

Tip #9 – Use Your Competitors Resources: Finding qualified leads is expensive; converting them is even more expensive.  That doesn’t mean you can’t make a little money from the leads you don’t convert.  Sell them to competitors you trust and respect and know will get the job done the way the client deserves.

Figure out your average cost per lead then offer to sell your unsold leads for a price less than that amount.  If your competitors have a similar average cost, you’ll be doing them a favor.

Tip #10 – Offer Extended Guarantees & Incentives: Sometimes, the guarantee of a specific benefit or the addition of valuable incentives make the difference in the sale.  Put as much value as your product as possible and then back it with complete confidence.

Find out what guarantees and incentives your direct competitors offer and then match or surpass them.

Tip #11 – Lock In Your Sales In Advance: Just about any type of service industry have the ability to lock in sales in advance for consistent growth.  This way, you’ll also lock out the option of buying elsewhere.

Provide a portion of your services free up front in exchange for agreeing to continue doing business with you in the future.  You can also provide a lower-fee in return for an upfront payment.

Tip #12 – License Successful Concepts: Know something your competitors don’t?  You may not want to share this information with those in your direct market, but if it wouldn’t hurt you to share it with those in outside markets, license this information and market it to them.

Write a sales letter and mail it to businesses similar to your own in non-competing markets.  Be sure to entice them with specifics on how your process will improve their business.

Tip #13 – Break Even On The Front End: Do you know how much it cost you to make a sale?  Do you know how often your customers buy from you again? Do you know how long they continue to buy from you? You should. Only then will you know exactly how much you can afford to “buy” a customer.

Once you have calculated this number, give away your products or services at the lowest price you can afford and then proceed to provide constant customer service and satisfaction to increase the length and frequency of your sales cycle.

Tip #14 – Test Your Prices: Testing your prices will help you understand how valuable your goods are to the marketplace.  Many times, business owners shortchange themselves early in their business and never think to raise prices higher than their comfort zone.

Split-test your prices by creating multiple landing pages on your website.  Also, use Google Adwords to put your tests to a larger market.

Tip #15 – Reposition Yourself As An Expert: People love to be led and admire leaders. Learn as much as possible about your industry and act as a filter to provide valuable information and service for your clients.  Consumers prefer to buy from those they believe are the best at what they do.

Launch a blog on your website if you don’t already have one.  Use this space as your soapbox, but make sure you are bringing a new angle or you’ll risk looking like you’re following your competitors instead of standing out from them.

Tip #16 – Buy Lists From Closing Businesses: For a variety of reasons, many companies go out of business every day. These businesses may find it very beneficial that you’re interested in buying a customer list they may not have placed value in any more.

Use Google Alerts to keep an ear out for businesses quitting in your industry or market.  Then offer to split future profits made from their list with them.

Tip #17 – Decrease Your Overhead: Keeping your overhead down could be the key to staying in business and could be a huge “profit center” in and of itself.  Look for wastes and excesses in your business and eliminate them.

Sell off or trade excess inventory, trim unneeded staff, cut ineffective advertising from your budget and farm out overload work to other companies and/or share costs with them.

Tip #18 – Don’t Burn Your Bridges: Even when cutting staff or apologizing for a business error, you can use the opportunity to build that relationship.  Offer to hire the staff back when possible and provide referrals for staff and departing customers.  You never know who they know and it’s just good business karma to take the high road.

If there is a bridge you’ve burned, it’s not too late to rebuild it.  Give the person a call or send them a hand-written letter with your sincere feelings and ask them if there is anything you can help them with.

Tip #19 – Don’t Let Your Head Get Too Big: Even if you provide the best product or service in the world, other businesses are going to continue to try and entice them away from you.  Don’t assume you are the only option and you’ll increase your chances that you will be.

Make sure to contact your customers from time to time and ask them for their feedback and ask them if there is anything you could have done better so that you can do it better next time.

Tip #20 – Get Responses To Your Ads & Sales Letters: Use the AIDA checklist before paying for any of your ads or sales letters if they don’t pass this checklist, you’re probably wasting your money. Get your prospect’s Attention, follow that up by piquing their Interest by building upon their Desires and lastly, ask for a specific Action you’d like them to take.

Sending out a sales letter to a targeted group with a special offer on your excess inventory is a great way to make some money immediately.  Be sure to make your offer time-sensitive.

Tip #21 – Make Your Headlines Pull: Figure out what makes you, your product or your services stand out from the competition and then promote this information in a benefit-driven headline.  You’ll get much more attention this way.

Make sure to test your headlines.  Remember, your headline is the most important part of your ad, so spend some time figuring out the best ones.

Tip #22 – Analyze Your Results: The real gold is in the results of your testing.  Categorize and crunch these numbers and study their trends over time to maximize your future campaigns.

Create an Excel database of your advertising and sales letter campaigns.  Include the cost of each campaign, results, what was tested, the offer, what media you used and any other relevant information.

Tip #23 – Don’t Rely On One Source: Diversify your product or service line, who you advertise with, where you get referrals and your vendors.  Slow economic times have a way of shaking up the marketplace and it’s your duty to identify and work with the best.

Discover new niches that compliment your services.  By expanding your services to cater to these niches, you will create new streams of income.

Tip #24 – Get Your Customers To Give You Referrals: The “cheapest” way to get new clients is to have your current ones send them to you.  By giving you their stamp of approval, referrers are presold and highly likely to buy from you.

Create a referral system that benefits your referrers, too.  Make sure to recognize their efforts whether you make the sale or not and follow through on any compensation you may have promised.

Tip #25 -  Recognize & Identify Your Hidden Assets: If you’ve been in business for awhile, chances are you have some assets that you aren’t even aware of.  Do a thorough audit of your business to identify these assets and then brainstorm ideas on how you can leverage them.

Think outside the box or hire a marketing consultant to help you uncover the hidden assets in your business.  Develop these assets to create new streams of income and grow your business on a consistent basis.

Slow economies are notorious for shaking out the weak businesses in every industry.  Use these recession-proofing tips to make sure your company isn’t one of them.

Got an idea to help others market through these hard times?  Share them below.

Despite a slipping economy, the Central Coast Women’s Network (CCWN) is experiencing predictable growth and if you knew Jacky Lopez, you’d understand why.

Jacky, Director of the more than 60-member-strong network, can be found at just about every local networking event you can think of and luring strong businesswomen with her passion to help them succeed.  After all those networking events, Jacky has also mastered the art of throwing great networking events herself.

If you’re looking to do some serious networking and learn how to improve your marketing to grow your business locally or beyond, do yourself a favor and attend CCWN’s next event, next Friday, March 20th at The Inn At Morro Bay.  The keynote speaker will be Starr Hall, PR Specialist and Founder of 2 Point Media.  She will explain how to “Unlock The Power of Social Networking” to grow your business.

For more information, visit CCWN, or download the (pdf) event flyer here.

Directions.