Nearly all publications that surround the topic of increasing referral business stress the importance of one strategy: how to ask your valued clients for more referrals. Methods include warming up your clients, effective communication techniques, when and where to ask, how to overcome the jitters, and so on. Contrary to this line of thought is what we at Rocket Referrals believe; that with a consistent referral strategy your company will grow via word of mouth organically, without the need to ask your customers for anything.
It’s important when choosing a referral strategy to understand the difference between an external and an organic approach for your business. An external approach focuses on identifying referral sources (promoters, valued customers) and employing a strategy to ask them for referral business in a calculated way and time. Whereas an organic approach focuses on organizing your business so that all communication to clients and prospects is referral-centric; meaning referrals are cultivated with targeted and consistent dialog so that they evolve without the need for asking. To move closer to generating referrals organically consider the following suggestions.
It all starts with your mindset. The ultimate goal when growing referral business organically is to cultivate your customers from the beginning so that they will feel compelled to refer you down the line. This entire process is exactly that, a series of actions or steps taken in order to achieve a particular end (more referral business). The starting point for this result is the mindset of your company; it is necessary to commit to a consistent strategy from the ground up and stay true to the course. Think of it as planting seeds, watering them, monitoring their growth, and then..eating them. Of course, we don’t eat our referrals, but we do grow our business from them. Understanding that referrals are a result of both great service and consistent, effective communication over time summarizes this first step. If you keep this up and track your progress while making adjustments when necessary, you will certainly gain much more steady business from referrals.
Adjust your language with your clients. This is the part where you plant the referral seed in your clients. When you communicate with your customers make sure they understand that referrals are integral to your business. If they understand that your growth comes by the word of mouth it will subconsciously set the expectation in their own minds to refer down the line. In addition, if you show how your company has grown through referrals in the past then it tells the story that you must be doing something right. There are several techniques you can take to achieve this. We mentioned one in an earlier blog post. That is, when you hear from a new prospect simply ask the question “may I ask you who referred you to us?” Bingo, you’re setting the expectation I spoke about with that simple line. Another technique is briefly mentioning referrals when prospects or clients ask you a question. For example, assume a customer asks you about an aspect of the product you offer. Answer by saying “That is a great question, actually a new client of mine who was recently referred to us brought up that very thing…” In addition, don’t feel shy about telling your customers how much you value referrals whenever possible. Before too long they will themselves understand the importance of telling their friends and do just that.
Have a consistent approach to communicating with your clients. Now it’s time to water those referral seeds. Similar to the external approach, you’ll first need to target which customers to communicate with and tailor the message accordingly. We mentioned before how to identify your promoters with the Net Promoter Score. But there are other factors you should consider beyond customer satisfaction. We will talk more about this in detail in a later post, but for now, I’ll outline a couple of other variables. Depending on the type of business you are in there are groups of customers that are more likely to refer than others. For example, if you sell insurance consider targeting customers with multiple policies. Or if you sell a product, categorize customers based on total revenue gained from a particular client. Repeat business certainly correlates to happy customers (and thus those that are more likely to refer). After you group your customers, contact them with a tailored and personal message that nudges them even more to make referrals. For example, send referral cards to your promoters so that they can more easily recommend you to their friends and family. Or, thank your long-term customers for their loyalty and tell them how much you value their word of mouth. Thank those that already referred and let them know that you would love to serve even more of their friends. Ask your best customers for testimonials so that they further prove themselves socially and tell more people about you. Whatever the approach, if you stay consistent with the communication and personalize it to your clients the referrals will naturally follow.
Analyze your progress and adjust when necessary. You guessed it, this is where you monitor the growth of your referrals. Choosing which clients to contact and what message to send will yield variable results over time. It’s your job now to adjust your strategy to the most effective in gaining new referrals. This could only require minor tweaking or a complete shift in who you contact. Over time you’ll see which targeted group has brought you the newest business. That is, only if you are tracking and analyzing this data. For this to happen you need to have a consistent approach and a database that is able to sort through the data so you are able to make a correlation between communication and realized referrals. This will allow you to determine what type of message is most effective and to whom. In addition, you’ll see which group of clients are actually giving you referrals. With this information, you’re able to adjust your message and hone in on specific clients to generate the most effective results for your money.
Finally, you’re able to eat your referrals. After all, that’s what we have all been waiting for, isn’t it? The bottom line here is that if you are employing these techniques from the organic strategy of gaining referrals you are able to skip the “picking” altogether. No need to ask for referrals when the expectations have been set and your clients are eager to refer you.