5 Steps to Getting More Customers With Referrals This Month

Using referrals is a great way for small business owners to tap into the network of their customers’ business colleagues, friends and family. But many entrepreneurs are shy about asking for referrals or simply don’t think of doing so. That’s a big mistake, because referral marketing is a low-cost (or even no-cost) way to get highly qualified leads. Here are five steps to getting more customers with referrals this month:

Know what type of referral you’re looking for
There are different levels of referrals. On the most basic level, you might ask a client to give you the name and email address or phone number of someone who might be interested in doing business with you. This is a fairly low-value referral. On the mid-range level might be a customer who discusses your business with the potential referral and can attest that he or she is interested in learning more. Finally, the highest level and most valuable referral would be a customer who actually introduces you to the referral or arranges a meeting between the two (or three) of you. Depending on your industry, you might seek one or all of these levels.

Develop a system
The most important step in the referral process is making sure that asking for referrals isn’t just an afterthought, but something that’s built into your sales cycle. For example, you may want to ask for a referral when you are invoicing the client for completing the job, or do it later as part of your post-sale follow-up.

Time it right.
Figure out the optimum time to request a referral and make it part of your sales and customer service process. It’s important to ask for a referral when the customer is feeling positive about your company. If you unwittingly ask a frustrated or angry customer for a referral, your efforts can backfire—so make sure the time is right.

Offer rewards.
Discounts on your products and services are a great reward for customers who refer others to you. You could provide a reward simply for giving a referral, such as a 15 percent discount off the next purchase for providing a few names and emails, or make it contingent on the referral actually purchasing (a free month’s worth of services if you refer someone who becomes a customer).

Follow up in a timely fashion.
The biggest mistake small business owners make with referrals (besides not asking for them) is getting them and then not following up. Build a timeline into your system so that you follow up within two weeks of getting the referral. Otherwise, the prospect could forget about you, could buy what you sell somewhere else or could simply turn from a hot lead into a cold case.