ATTRACTING PROSPECTIVE CUSTOMERS through referrals is a very powerful way to build your business.

The person who comes via referral is already convinced of the value of your product or service because someone else has done all the work for you of educating, persuading and recommending. That makes it the best form of advertising possible.

And it costs you very little.

One of the biggest obstacles to making a sale is the underlying tension between the buyer and the seller. When the tension is high, the feeling of trust is likely to be very small.

However, when a prospect comes to you through a referral, tension is usually very low or non-existent.

Referral marketing leads to tension-free selling. You’re attracting people the way they want to meet you—through a trusted friend or business associate.

When a prospective client comes to your website through a referral, the referral source has already done much of the hard work on your behalf. They have put their reputation on the line by recommending your product or service. The endorsement and testimony of the referral source make the prospective client feel more comfortable about doing business with you.

How to get more referrals

Provide customers with memorable experiences if you want to become more referable. The higher the level of service you give customers and the stronger the relationships you form, the more likely you will be to stay referable.

You need to commit to delivering a high standard of product or service and an exemplary level of customer service, not just the first time the client buys from you but for the entire relationship.

Find out what your customers expect

To meet and exceed customer expectations, you need to know what those expectations are. Talk to prospective customers to find out what they want and expect. Find out how they’ve been treated by your competitors and by businesses in other industries or markets.

Ask them why they are thinking of switching their custom to you.

Make a habit of asking your customers at every point of contact what you can do to improve the quality of the service you provide. Don’t ever allow your customers to feel as if you’re taking them for granted.

Once your customers like and trust your business, they will refer others to it.

If you are not currently getting many referrals, you need to look at the service you provide and the relationships you establish with your customers. Talk to your existing and past customers to find out what they believe you need to do to improve. You may need to offer them an incentive to agree to answer your questions.

The key to earning the trust of your customers (and therefore the likelihood of referrals) is service. People trust those who serve them well and who appear to do so with sincerity. Part of that is delivering what you say you will on time.

Put a system together to generate a steady stream of referrals.

Offer referrals

Demonstrate your belief in referrals by giving referrals to your network of contacts.

Thank your customers

Deliver an outstanding service or product so that customers want to recommend you to others. When they do that, thank them for the recommendation—people like to be acknowledged. You don’t have to go over the top to demonstrate your gratitude: a simple phone call or personal note will have a big impact.

But if you have the budget for bigger rewards, then offer something more.

Offer a guarantee

You can overcome your prospective customers’ fears by offering a satisfaction guaranteed claim. Tell your customers that you offer the guarantee because that will encourage them to recommend you to their customers, colleagues or friends.

Ask for referrals

People will often be flattered to be asked for a referral. But choose your timing carefully. The best time to ask is when they’re clearly delighted with your product or service (usually just after you’ve delivered it).

Ask in writing

Ask for referrals at the end of your printed material, in emails and on your website or blog.

Send referral letters

Send a letter to your customers and ask them to refer a colleague or friend. Sweeten the deal by offering a referral reward such as a bonus or incentive.

Reward customers for referrals

Show customers how much you appreciate them referring their customers, friends or colleagues by rewarding them. Rewards can range from a free estimate, sample, or consultation to a discount on future purchases or extra goods or services at no additional cost.

Note: don’t pay beyond what the referral is worth—experts suggest a reward worth no more than 15% of a project’s revenue.

Offer a ‘finder’s fee’

Try to offer customers or other businesses a reward for the referrals they send. Offer a set fee or a percentage off their next purchase from you when that referral becomes a paying customer.

Offer discounts for referrals

If you can afford it, offer discounts on future purchases to those who refer your company to others. For example, offer the referring customer 10% off the next job order if they refer someone to you and that individual uses your services. Offering discounts is a great incentive for many to refer companies to potential customers.

Swap referrals

Exchange referrals with businesses you deal with. Concentrate on businesses whose customers are likely to need your service or whose service your customers might need.

Establish a way of tracking the referrals you send and receive. Give leads in return. It’s one of the best ways to get referrals. Kick-start the process by providing referrals to other businesses and customers. Only recommend businesses that you know will deliver a quality product or service because your reputation is on the line too!

Remind your suppliers

Ask your suppliers for referrals. Send out brochures or samples of your work to your suppliers and remind them that when your business prospers, so does theirs.

Use your website as a referral tool

On your website, have a ‘click here to earn cash’ button which takes customers to a page that explains how they can earn rewards by providing referrals.

Use ‘invite your friends’ or ‘send article to your friends’ buttons on your website.

Contact prospective customers

If you can, contact prospective customers who’ve decided not to do business with you. Even if they don’t want your product or service, they might know others who will so do ask them for referrals.

Train all your employees

Train your staff in the value of referrals and how to get them. Offer bonuses and rewards for those who think of new ways to get referrals.

Track your referrals

Monitor where most of your customer referrals are coming from. By tracking referrals, you will know what works and what doesn’t work. Reward those customers who make the most referrals. Find out why and how they make their referrals. Use the information to increase referrals from other customers. You could also consider setting up an affiliate programme in which you pay a set fee for referrals.