Six Steps To Growing Your Business With Referrals
Do you have enough customers? Here’s a better question: Do you have enough of the right kind of customers?
Do you agonize and strategize over the marketing plan you’ve designed to position offerings in front of your profile prospect? What’s the right message, platform, frequency, etc.? And do you then pray that the precious cash you’ve committed to marketing crosses over that pivotal line from expense to investment?
Agony and prayer; not a great strategy, right? But if this sounds familiar, you’re in good company. Marketing legend, John Wanamaker (1838-1922) once lamented, “Half of my advertising budget is wasted; I just don’t know which half.” It’s true, marketing metrics have come a long way since Mr. Wanamaker’s time, but that emerging science has been somewhat marginalized by increasing pressure from the digital marketplace. Indeed, getting customers on the proverbial dotted line is still challenging in the 21st century, especially for small businesses.
Beyond marketing, perhaps the primary reason for our customer acquisition challenge can be attributed to a human trait that’s at once primordial and unfortunate: We make things harder than they have to be. There are many examples, but arguably one of the most dramatic is also one of the simplest to fix: failure to ask for referrals.
Business referrals are now and have always been there for the picking. And they’re as old school fundamental as they are new school relevant. So why don’t more people take advantage of this low-hanging fruit? It’s that can’t-get-out-of-my-own-way thing. Too many salespeople and organizations don’t have a referral strategy and teach referral practices.
Even though getting referrals is fall-off-a-log easy, there are specific practices to follow. Here are six I recommend to help you get started with your strategy.
1. Spend as much time developing a referral strategy as you do a marketing strategy. When you do, two things will happen very quickly: you’ll gain new customers you weren’t getting from marketing, which will take performance pressure off of your marketing plan.
2. Identify existing customers who like what you do. Each one is that valuable asset called a center-of-influence (COI).
3. Explain – in person – that you need their help and how they can help you. For example: “Mr. Smith, thank you for your business over the years. We’d like to have more customers like you. I’m sure you ask your customers for referrals and would like to ask if I may do the same with you.”
4. Ivan Misner, founder of Business Network International (BNI) furnishes the next critical question: “Who do you know who …has your high standards?” “…uses the products we offer?” “…you would like to help do business with good companies like ours?” (Your “Who do you know who …” here.)
5. When you get a referral, thank the COI profusely before, during, and after the subsequent contact, especially if you get the business. One thing I always say to my COIs is, “If a referral is a friend (or customer) before I contact them, I promise they will still be after I talk with them.”
6. For millennia, business referrers have been paying it forward. As Ivan Misner says, “Givers gain.” The best way to have a sustainable referral strategy is to be an active referrer yourself. It’s much easier to ask someone for a referral to whom you’ve just given a referral.
If you’re still not sold on referrals, look around and you’ll see many successful businesses that grow only by referrals – essentially no marketing. There’s one primal reason why referrals can be more productive than marketing: People are hard-wired to want to help other people when they’re asked.
Get out of your own way and make a full commitment to creating and executing a referral strategy.
Write this on a rock ... Referrals are low-hanging fruit just waiting for you to harvest.
Jim Blasingame is the author of The 3rd Ingredient, the Journey of Analog Ethics into the World of Digital Fear and Greed.
