According to Smallbusinessforum.com, the likelihood of signing a new customer from a referral is 60% versus a non-referral which is 10%. As a matter of fact, these days, referrals are one of the most effective ways to generate new business for companies of any size. And it makes sense – potential clients who are referred by someone they know, and whose judgment they trust, are more inclined to use your products or services than those who aren’t.
Unfortunately, many local businesses are not getting nearly as many referrals as they could. Few local businesses actually have an organized method of getting referrals for their business. While some local business owners may ask for referrals, they only do so passively and do not follow up with their clients.
In addition, a common misconception about referrals is that good customer service alone will warrant referrals. However, these days people expect good service and are therefore not inclined to mention it to others unless it goes above and beyond expectations. So how can you start getting more referrals for your business? Here are some helpful tips to make referrals a part of your regular sales routine:
Asking for Referrals Directly
Don’t be afraid to be direct about asking for referrals throughout the sales process. When you first get new customers, after their first transaction with you, or when they call to book a second appointment are all great opportunities to talk to a customer and maximize the amount of referrals you can get.
Another great technique is to view every client you work with as though your sole purpose is to get a referral. This will not only keep you constantly thinking about getting a referral, but it will make you more service-oriented as well. You can even train your staff to think about every client they encounter as an opportunity to sign up a new possible referral partner.
Creating a Referral Program
It’s a good idea to offer service credits as an incentive to your clients who send you new business. This can be a discount on their next service or a credit to their account. Although it might feel like you are spending money on something you could get for free, your goal is to get more than just one referral. Incentivizing your current clients with discounts each time they bring you new business will help you both grow your business and build a relationship with current customers.
Additionally, send a description of your referral program to all of your satisfied clients. It also doesn’t hurt to send it to all past clients; it’s not only a great way to get referrals, but you can also renew old working relationships! You should also talk about your referral program in any existing or ongoing communications you have like a newsletter, invoices you mail out, or catalogs.
Using Other Items or Tools
Providing your clients with some form of collateral about your business will make referring easier for them. Brochures, postcards, and coupons are great promotional items to use. You can also take advantage of social media tools like Twitter (Yodle) and Facebook (Yodle) to encourage your current customers to share information about your company with their friends online!
Realizing Potential Sources of Referrals
Your referral program shouldn’t be limited to customers. Friends, family, the local gym, banks or hospitals are all great potential sources of referrals. You can also work with anyone in a business that sells a service complimentary to your own. And, referrals can work both ways. The local auto repair shop sends potential customers to you, while you suggest their oil change services to your customers.
Finally, if you are asking a client for a referral, chances are they’re very satisfied with the services you’ve offered them. Why not ask for a testimonial from the client? They are great for building trust through your business website!
In order to get more referrals, it’s important to incorporate these tips into your sales routine. Once you begin receiving all of these referrals, you can provide them with the type of service that brought them to you in the first place!
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