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 Secrets of Getting Your Clients To Refer You Boatloads of New Business
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.
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
- 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.
- Let these same customers know that you’d prefer their referrals over any other source of customers or clients.
- 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.
- 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:
- 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.
- 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.
- 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.
- Make a list of the names of your ten best customers
- Contact each person on your list and ask them to recommend you to their friends, family, etc.
- Offer an incentive to those customers who send you a referral
- Ask other business owners and professionals to recommend you to their customers
- Offer special discounts or other incentives to businesses that send you referrals
- 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.
- Who are your ideal prospects? What type of customers would you like to have many more of?
- What benefits do your ideal prospects want or need?
- What does your competition provide that you don’t and what do they do better and worse than you?
- What benefits do you provide and what things do you do better and worse than your competition?
- What problems do your ideal prospects have that are not being met and how can you help them solve them?
- 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.
- What are the demographics of your ideal prospects?
- Financial Worth
- Type of Business
- Marital Status
- Ethnic Group
- Geographic Region
- Political Views
- Memberships in Associations/Groups
- Automobile Type
- Magazine/Newspaper Subscriptions
- Type of Investments
- Physical Health
- Mental Health
- Buying Preferences
- 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
- 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
- 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:
- 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
- Unconverted prospects
- Church members
- Association members
- Other businesses and professionals in your area
- Other businesses and professionals outside your area
- Community leaders
- Special interest groups
- 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:
- If you’ve got customers of your own, you agree to reciprocate and endorse them to your customers.
- Whether you have customers of your own or not, you can offer to rent their list for a fee.
- You can trade your products or services to them for the right to mail an offer to their list.
- 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.