I love to read especially in the summer by the pool. When I finished “The Girl on the Train,” I let my friends know that if they wanted another good read like “Gone Girl” or with more likeable characters to give it a go. It turned out that many friends were looking for more good reads like “Gone Girl.” Three suggestions came in and I ended up reading two, both great reads.
That’s the power of referrals for you.
(The third sounded too scary, but I might give it a chance after re-reading the synopsis.)
According to Infusionsoft’s Small Business Market Research Sales and Marketing Report, 72 percent of new business comes from referrals and word of mouth. In another study, Nielsen has found that 84 percent of its respondents say that recommendations from people they know is the most trustworthy of all advertising.
Of course, you’d like your clients to refer their colleagues and friends to your small business. But they’re just not coming in.
How can that be? Your client is happy with your work. You get along well. You may even be friends.
Where are the referrals?
Here’s how a typical referral happens
Think about your daily life. You’re busy with your company, your personal life, taking care of yourself, and whatever else. Have you been referring others? Most likely not. You’re wrapped up in the day-to-day stuff that it doesn’t dawn on you that someone may need one of your vendors’ services.
With dead plants and sprouting weeds, my flower bed looked embarrassing. I had been trying to do something about it for a long time, but never got around to finding the right company to clean it up.
A light bulb went off. I contacted a friend who has been an officer of our neighborhood association for years. I figured she knew someone.
Sure enough, she did. This was a proactive referral. I directly asked for the recommendation.
Most of the time, a referral isn’t proactive. Only a couple of people knew I wanted to do something about that mini-jungle. I’m sure many of my friends know talented lawn service providers. I didn’t think to ask them and they didn’t think to make referrals. That’s life getting in the way.
After the lawn service did the job, I could actually stand to look at the front of my house again without cowering. My mom knew about the yard work and mentioned it to my siblings in passing. I also posted before and after photos on Facebook.
My sister asked for the lawn service’s contact information as did a couple of friends who saw the Facebook post. While these aren’t direct referrals, they happened because I brought it up. You could say it was a referral of opportunity.
Since then, I have not referred the lawn service. No one has asked me. And I don’t know of anyone who needs one.
The dark side of referrals
There’s the other side of referrals you may not have considered. The fear of making a bad one. You know, anything can happen on any given Sunday.
Like Serena Williams losing to an unseeded player in her quest for a calendar Grand Slam.
A restaurant having an off day when the food critic comes.
An employee having a bad day.
Here’s one that happened to me.
I had heard about the movie “Goodfellas” many times. It was coming on TV, so I recorded the movie.
My older son happened to finish watching “The Godfather” series and liked it. When it was just the two of us, I asked him if he wanted to watch it. To my amazement, he agreed.
Neither one of us liked the movie. (Please don’t write me off because of this.)
Watching a movie with him rarely happens. And I blew it. Now he’ll probably never agree to another movie offer again.
Some people fear if they refer a business and it doesn’t go well, it’ll hurt the relationship. My son is stuck with me for life as we’re related. Friends and colleagues, on the other hand, are not beholden.
How you can feed the referral machine
I’m busy with my everyday activities that I’m not thinking about the great lawn service. Well, except for when I water the new plants or need a story for an article like this one. I don’t have time to be an evangelist for every company that does a good job.
There’s another instance in which I may recommend the lawn service. Perhaps, if they had offered a $25 gift card for every successful referral. Maybe I would work a little harder to mention them.
If you find out a client has referred someone to you, don’t miss the opportunity to encourage the client to do it again. As soon as the referral is made, surprise the client with a gift card, a treat, or something that would be appreciated.
A client who hadn’t used my service in a long time referred someone to me. I emailed a thank you as soon as I connected with the prospect. After she became a client, I sent a treat with a note as a thank you.
So what can you do to compel your clients to refer you?
6 ways to get referrals
- Maintain an email list. Email this list on a regular basis to stay top-of-mind with your clients. Mention you welcome referrals.
- Take advantage of all transactions. For example, add a note or insert in all your invoices that you reward for referrals.
- Offer a reward for successful referrals. Mention it on your website and in your email signature.
- Ask clients. Try this: “Who else do you know that has a similar challenges as you did that we can help?”
- Ask prospects who they know might be a better fit. You may not have been able to close because you weren’t a fit or they didn’t have the budget.
- Ask people in your personal life. Next time you get a haircut? Ask. Next time you attend a PTA meeting? Ask.
Once you get a referral, thank the referrer right away.
Direct referrals and referrals of opportunities don’t happen often enough. To make the referrals work for you, it needs to become a system. You want to make it a regular process like creating accounts receivable to invoice clients, paying accounts payables, and reviewing financial reports.
You most likely have a process for all of these. Referrals are no different. They need to be a part of doing business.
What other ways can you make referrals work for you?
Image credit: Tony Harrison