Customer retention is one of the building blocks of any healthy business, but new clients are of equal or greater importance to ensuring your company’s success. According to the Wharton School of Business, a referred customer costs a lot less to acquire, and has a higher potential for retention and loyalty.
Unfortunately, requesting referrals can be uncomfortable and an unfamiliar process for many business owners for a variety of reasons. At ActionCOACH RGV, we’re all about helping you grow your business by increasing revenue and improving cash flow through all possible methods, including obtaining meaningful referrals.
Below are some useful suggestions and tips to help you overcome any fears and help you begin securing quality referral requests.
As with all things in life that create anxiety or uncertainty, it’s important to overcome fears by using the right mindset. Zeroing in on what you hope to achieve opens the doors for success.
With referral requests, your mindset will change when you remember most people enjoy helping others, even if there’s no benefit to them. Reminding yourself that the worst response you may receive is ‘no’ will help eliminate any roadblocks to pursuing referrals.
If your concern is avoiding awkward segues, consider making the referral ask part of your project routine. Most projects will involve a final meeting with your client and this opens itself to an ideal opportunity to request a referral.
Look at your client base and find established customers who could serve as potential advocates. Allow organic (and requested) customer feedback to serve as a referral growth engine.
Using different metrics can help you gauge customer loyalty, and help you to develop strategies for referral requests. For example, consider something as simple as sending out a single-question survey to your customers asking: “How likely are you to recommend our company/product/service to a family member, friend, or colleague?”
Respondents may rate their experience on a 1-10 scale; those responding favorably are likely to be better advocates and helpful in securing referrals. This also signals your enthusiasm for growth and opportunity, and can likely spark greater interest from clients wanting to help you attain it.
A recent study from Amplifinity reported that verbal referrals produced the best results, offering a 32% success rate. This could be based on the idea that personal interaction is favored over general requests that may seem scripted and unappealing.
Because not all business owners may have the ability to make in-person requests, perhaps due in part to logistics based on the company size or structure, other options could include using a lead form, email, business cards, shareable link, or social media to request referrals.
It’s important to note, however, that social media offers the least opportunity for referral conversion at only 1%. Still, while a verbal referral is best, don’t shy away from using the other forms mentioned.
Referral requests can become part of your email and social media marketing campaigns, and diversify the ways you look for new business opportunities.
As you prepare to ask for a referral, here are some best practices to increase your odds of success:
1. Request referrals face-to-face. Traditional ways of doing business may be seen as a show of respect to your clients. It also tends to be more successful. If a request for something is made by a person standing in front of you, face-to-face, the person will probably be more willing to help.
2. Offer an incentive for successful referrals. Compensation in the form of monetary rewards, such as gift cards, can act as an effective incentive for referrals that lead to sales or new business. Another option would be to offer a discount or merchandise for your company’s products, goods, or services.
3. Avoid asking for a referral when presenting a bill. A client may feel bombarded, and you’ll want to avoid risking the appearance of requesting too much at such an inappropriate time.
4. Ask for a client testimonial when asking for referrals. A short endorsement from your clients can be used on your company’s website and in other marketing materials. Requesting a referral can be a precursor for building greater trust and can help you secure a favorable testimonial.
Whether you’re launching a startup, working hard to carve the career of your dreams, or developing a global organization, ActionCOACH RGV can support your endeavors through our full suite of exceptional programs, tools, and resources through Founders U.
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