Most businesses recognize that sustaining a business over the long run requires loyal customers. So, smarter businesses invest in referral marketing programs in order to grow their businesses. But it is possible to make mistakes in referral marketing which can make one look clueless. How can anything go wrong with referral marketing, you ask?
Well, referral marketing, just like other marketing efforts, is managed by people. And people are bound to make mistakes. Avoid the following mistakes if you want your referral marketing program to succeed.
Failing to ask
The number one reason people in professional services businesses fail to get referrals is that they don’t ask. We don’t want to be seen as pushy or sales-y, we don’t have faith in the process, or we simply don’t know how. These are normal human excuses for not asking, but they are excuses after all. We all know that if you don’t ask you don’t get.
Not rewarding your customers for their referrals
You must make it a point to thank your customers – as soon as possible after they give you the referral. Incentivise them to refer you even more business by offering them a special coupon or savings on your existing products/services. They are already a customer, so they’ll always appreciate a special offer from you. These tangible benefits will be welcome.
Asking at the wrong time
Asking for referrals is all about timing. And, to get this timing right you need to set the scene with your client and sow seeds along the way. Initially it is imperative that you position yourself as a referral based business in their minds. This means preparing the ground with a client and providing reminders throughout your service delivery that giving referrals is an integral part of your marketing strategy. Then, and only then, when the ground is set and when you have built a high degree of confidence in your capabilities is it okay to get ready to ask. I say get ready because this is when you prepare your client and avoid putting them on the spot.
The time to ask usually comes after the completion of the work you are doing, or perhaps 2/3 of the way through a big project. This is the time to remind your client that you are going to ask for a referral. Clarify the kind of businesses you are looking to meet, and let them know that next time you speak you would like to ask. This gives them the opportunity to think about potential referees, and then when you speak again, ask. Not farming referral leads. Just because someone is not interested in your services via a referral immediately does not mean that this person is not a serious potential prospect for you. You need to build a hopper system to nurture your referrals.
Not being consistent with your efforts
If you ask someone to refer you and they don’t get to it right away, don’t feel that there is no chance of this person ever being a referral source for you. Maintain consistency with your efforts so you can target the same audience again and again. You never know when they will come across someone who will be a great referral for you – and you will be top of mind when that moment happens! Know that referral marketing requires consistent effort and action on your part.
Using the wrong media
Sometimes people want to make a referral system so automatic that they don’t do any work. Can this work? Yes, but sometimes a referral system will involve you picking up the phone and actually calling people to ask them for referrals, or who they might know.
Not sending out the right message
It’s critical that your message is geared towards the recipient. Keep this principal in mind as you are crafting your message: What’s in it for them? Focus on the benefits they will receive by purchasing a product from you or engaging your services; not just the features of what you offer. Many small business owners are guilty of not sending out the right message in a simple, effective way. Review your messaging structure and evaluate if it’s working or not. If it’s not working, change it. Remember that no one can refer business to you if they’re not clear on what you do, how you do it and why you’re different!
Referral marketing is an effective marketing method when done the right way. Follow the above tips to avoid making mistakes in the process – and watch the referrals roll in.