Really…I can’t think of any business that wouldn’t want more referrals.
Studies have shown that people referred by others are not only more likely to convert into customers, but they are also more likely to refer even more business to you. Sounds pretty good, right?
Many businesses struggle with getting referrals, however. It would seem that with the amount information freely available this wouldn’t be the case.
Until you look at the information…
Most Advice You Get Is Wrong
…Well, it’s not wrong per se. It’s more like incomplete.
When you search out “how to get referrals” you’re going to get a lot of advice like:
- Provide an exceptional product or service
- Be likable
- Take care of customers
All great. Though not very actionable.
Quite frankly, providing a great product or service is the price of entry. While you’ll get some referrals naturally, it won’t really “create” any referrals for you. And that’s what we’re looking for here, right?
And “asking” for referrals (as most advice will have you do) can be a bit awkward. Plus it’s a bit self-serving.
But there’s a better way once you get down to the root of the issue…
The Underlying Issue with Referrals
The problem with relying on referrals for most business is…well…you can’t.
Referring people to a business is generally a passive activity.
In other words, it’s not something that people normally (or actively) do. And although current customers are often your best source of referrals, this is not something that “providing a great service” will solve.
If you have a great accountant, chances are you’re not going to go raving about them to all your friends. In most cases you won’t talk about your accountant unless someone asks you if you know a good one.
And then you’ll recommend yours because of their great service.
But what if no one asks you?
So the job of any business that wants more referrals walking through the door is turn the activity from a passive one into an active one. One where people are going to talk about your business even when they haven’t been asked about it.
What the Cable Companies Know
Nothing turns passive into active as well as an incentive.
If people can benefit from an action, they are certainly more likely to take that action.
Cable and Dish companies certainly know this. That’s why you often see them running promotions where you get a certain dollar amount for every person you refer to them. On top of that the person you refer will also get some sort of dollar incentive.
Everyone wins (especially the cable company).
You don’t have to flat out bribe people with money, however. You can offer savings – for example, 10% off next month’s bill for each referral.
You can get creative. But incentivize.
A lot of businesses already do this. Yet they still seem to struggle. And that’s because they are missing this one critical piece…
Stay “Top of Mind”
An incentive can only get you so far when people don’t think about it.
You not only need to provide people with a reason to refer business to you, but you also need to constantly remind them of that reason.
This is why people normally recommend you “ask” for referrals. But again, this isn’t the best route to take. Plus asking over and over again is annoying.
Here’s a better way…
How to Build Your Referral System
Instead of straight up asking for referrals, gently remind your customers that referrals are appreciated…and of course that they can benefit from referring new business to you.
The best way to do it is to “passively” remind them of the idea on a consistent basis in your communications. But to do that you have to have communications first.
For example, over at ProfitCrunching (one of my other businesses) I offer a done-for-you newsletter service for accountants. Realistically this newsletter can be used by anyone who has a business-minded clientele. But it is marketed specifically to accountants for a reason (and you can see the reason in my free mini-course here).
The key to sending out a newsletter like this is actually have people open it and read it (something most accounting newsletter fail at miserably). Your gentle reminders will do you no good if no one sees them.
When you provide value on a consistent basis like this, you are going to stay in the minds of your customers. Plus, you will stand out from your competition and any service they may have been signed up for before. So they are more likely to remember your referral bonus.
This option is not an “alternative” to something like the newsletter I mentioned above, but rather an “in addition to” type of thing.
In fact, I’d label this as mandatory
You’re building your email list, right?
Sending out follow-up emails to your list of clients and prospects is a cheap and effective way to stay “top of mind.” And you can actually automate the entire process with tools like Aweber if you want to write out the emails sequence ahead of time.
When you send emails to clients, remind them that of the benefit of referring others to your business.
When you send emails to prospects, remind them that they should become your customer in the first place :) .
The Hidden Value of “Top of Mind”
It’s pretty clear how constantly reminding your clients of your existence can benefit you in terms of referrals. But referrals (and big referrals) can often come from unexpected places.
Steve Gordon recently sent out an email describing a very surprising referral source.
You would expect that most of referrals would come from existing clients (or strategic partners). But Steve does an incredible job with email marketing.
So much so that he received a referral for a pretty big business deal from someone subscribed to his email list that wasn’t a client.
This happened because Steve stays “top of mind” with not only his clients, but also his prospects, by utilizing email marketing.
In fact, you’re hearing about this story, and about Steve, because I’m on his email list.
1. Leave your thoughts in the comment section below.
2. If you’re not building your email list yet, make sure to start now (I personally use Aweber).
3. If you’re in the accounting or financial services industry, check out my newsletter service.
4. If you want to know the marketing strategy I used to launch two businesses in 2013, check out my free mini-course.
I think that’s enough homework for now :) .
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