Systems are the key to a predictable business and, just like other parts of your business, you need to have a system in place for referrals. It's not enough to say that you want referrals — you need an entire culture of referrals in your business.
There are 5 keys to putting this system in place.
- A strategy
- A talkable difference
- An understanding of who your ideal end user is
- A process for handling referrals
- A network of loyal customers and strategic partners
Building a referral strategy takes several things into account. First, you have to truly understand who your business serves, what value it brings to those people, and why someone would want to refer you. Part of putting together a strategy is understanding what you want to accomplish — what are your goals? Goals could include the desired number of customer referrals per month, a specific number of new partner referrals, or a set amount of revenue gained from referrals. Your strategy is your overall plan for having a business that is referral-worthy.
A talkable difference
Jeff Bezos said, “If you do build a great experience, customers tell each other about that. Word of mouth is very powerful.” TOMS did it by being philanthropic; Apple did it by turning the computing world on its head. There are so many ways to stand out from your competition — it's just a matter of making a decision to be different. How about offering an incredible guarantee or a customer experience like no other? Look at your competition and see what you can do that they can’t. Study businesses from other industries to see what they do differently. The very best way to understand what makes you different, though, is to ask your customers why they chose you and not someone else.
Once you decide on your difference, make sure your organization is consistently providing it. If you aren’t consistent, people won’t refer you.
Knowing your ideal customer
Who does this difference serve best? It’s not just any end user — when asking for referrals you have to describe exactly the kind of person or business you best serve. Without knowing this, people don’t have a context to look for referrals in. What would it look like if they needed your product and services? What is the common frustration? You have to describe the value you bring this ideal end user and you have to provide that value – again, on a consistent basis.
A process for handling referrals
The first step is believing that you deserve referrals, that you are the best company to offer the products and services you provide. If you don’t have this mindset, any process you put in place will fail. Your entire organization — from your receptionist to your implementers to your tech support — needs to have this deep-seated belief. You need to create tools to help people understand what your ideal end user looks like. This should include who your ideal end user is, what value you provide them, how you are different, all of the things your company does, and how you handle a referral once it is given.
Referrals are the most sincere compliment someone can give you, so treat them like gold. Your follow-up should be impeccable and you need to regularly share where each client is in the sales process with the person who referred them. When you close the sale, do something special for the person who gave you the referral. Money is not usually the biggest motivator to refer, so consider giving to a charity of their choice, buying them tickets to their favorite sporting or cultural event, or treat them to a fabulous restaurant (not a gift certificate, but give the restaurant your credit card and let them have anything they want on a specific night). The options here are endless — just make it memorable!
A network of loyal customers and strategic partners
“Loyal customers, they don’t just come back, they don’t simply recommend you, they insist that their friends do business with you.” — Chip Bell. Building a network of clients who are evangelists for your business takes doing everything right with them from start to finish. This begins with the moment someone experiences your business and doesn't end until the customer goes out of business or no longer has a need for your products and services. Every touch point is important. You should always exceed expectations. Make your existing clients feel that they are important to your business. There is nothing worse than being a customer and finding out that the new people are being enticed by an offer that you didn’t get (for example, cable TV or cell phone services). Build an advisory board of existing clients. Let them know you truly value their opinion.
Building a strategic partner network is important to your referral success. In this case, you want to look at the other vendors that serve your ideal client and the people you see as potential competitors. In the case of people you see as competitors, they may provide services that actually compliment what you do and vice versa. These people are part of your indirect sales team, which can be as structured or unstructured as you like. The key here is to refer them first. Find a way to let your existing clients know that you believe in these people and that they will do the best job for them. You will want to meet with these people on a regular basis; you can do this individually or form a group that meets weekly or monthly to help each other’s businesses grow.
Building a culture of referral is important to your business. It's not hard, but it is complicated. If you have any questions about how to do this, contact us, we can help!