The 3 Keys to Boosting Your Referrals

• Customers Don’t Know How to Value Your Services
It is not enough for your customers to be content with your services; they need to value them enough to recommend you to someone they know well. If you provide just a “me-to” service or product, why would they want to refer you?

Does this customer or colleague value your products and services enough that he or she would recommend you to someone important in his or her life?

In many cases the people you do business with do not know how to value the services they receive. You, therefore, need to let them know the value before, immediately after and occasionally after you deliver your services.

• They Don’t Know What You Do
Do your customers fully understand everything that you do, or just the specific services you provided to them? Next time you are talking to a customer, ask them what they know about your services. It should be eye-opening for you.

While it is important for your customer and other potential referral sources to have a thorough understanding of the services you provide, don’t tell them everything. People can normally associate only 1-3 things about a company, product, person or service. The more you tell them, the less they will remember. So pick the most likely services that they might refer and focus just on those.

• They Are Uncomfortable
When someone makes a referral, they are putting their reputation on the line. So this ties directly to how they value your service. They not only need to feel good about your service, but also feel that the person they refer will also get good service. Reassure your customer that you will provide the same excellent level of service to the referral.

Say “Thank You”. Another part of feeling uncomfortable is if they referred someone in the past and you did not thank them. Don’t just thank them when they first give you the referral — Also thank them after you meet the referral. Your customers and other referral sources need to feel appreciated. Make it personal. Send a hand-written note, a fruit basket, a book (nothing so lavish as to be thought of as a bribe). Make yourself memorable.

1. It makes them feel good (emotional) or
2. They have an incentive to do so (logical).

The approach you take will depend upon the nature of your relationship with your customers. If you have a personal relationship, you should use the emotional approach. This has an added benefit of reinforcing in the customer’s mind that they like doing business with you. Professional services businesses are good examples of this.

Would you be more likely to refer your accountant because he offered you a discount on your tax return or because he always saves you money? (Note: This is different than the accountant providing you a surprise discount as a “thank you” after the referral.)

If your business is more transactional in nature, then an incentive would normally be more effective. Here is how to set up the incentive:

• Know what you can afford.

Calculate your Customer’s Lifetime Value so that you know how much you can spend to acquire a customer through referrals.

• Tie the incentive to the referral becoming a customer.

You don’t want to give something of value away to a random list of referrals that will never convert.

• Make it a win-win for both your customer and the referred person.

Consider also giving an incentive to the person being referred. This way both parties gain from the referral beyond doing business with a company they trust. For example, if your neighbor’s trash pick up service offered them one month’s free for referring you, you might think (a) the only reason they referred you was for the money and not because it was a good service and/or (b) you should be getting a similar discount.

• Select an incentive that would motivate multiple referrals.

Offering a free cookbook, for example, might be a great one-time incentive to Tupperware buyers, but unless it is a series, people will not want more than one. (A series would actually be a great incentive as it would motivate customers to make referrals to collect all the books).

A word of caution — if not done correctly, an incentive can actually backfire; the customer might be offended because you have made the referral a transaction instead of something the customer wanted to do to feel good.

• Let them know you are looking for new customers

Most of your customers have no idea that you are looking for new customers. You need to let them know that you are looking to grow your business by taking on new, quality customers. Make it a habit of asking when you see them and in all your communications.

• Show them how to make introductions

Don’t assume your clients know how to make an introduction. 9 out of 10 times they would simply give your contact info to that person and assume they will call you. If you want them to send an introduction via email, give them sample verbiage to use and ask to be cc’d.

• Let them know whom to refer

How can someone make a referral if they don’t know who would be a good client for you? Describe to them what an ideal customer looks like.

• Remind them

While getting new business is always on your mind, it is not on your clients’ mind. You need to continually communicate this information without being overbearing. The best time to ask, of course, is right after you have just delivered outstanding service.