Try these 9 Steps To Generate Worthy Referrals!

We all know that enthusiastic referrals are among the very best ways to grow a company. Few things in business are more valuable than heartfelt referrals and being able to honestly say that “our customers are our best sales people”! Well-known Fortune 500 firms such as Costco and eBay have grown principally through word-of-mouth referrals, not advertising or traditional marketing. They find that referred customers cost less to serve because they’ve already been coached by an enthusiastic ‘promoter’ about their company. We know that trust, generated by excellent service and customer satisfaction is the bedrock necessary to fuel such activity. But it’s also clear that the marketplace is saturated with a flood of ‘spamming’ referrals and networking that often serve to irritate and erode customer trust.

There’s much we can do to maximize the likelihood that satisfied customers, employees and other colleagues will refer us. A few beneficial practices:

■ Have a Baseline: Identify incoming customers that select your firm based on
reputation or referral, so that you can actually track the progress you make in
improving your company’s “referability.”

■ Referral Generation Plan: Create a plan that formally enlists your employees, key
trade associates, and suppliers, complementary business serving the same markets,
and known ‘promoter’ customers. Even though superb performance earns you the
right to ask, with many potential referral sources you’ll still need to ask. Identify
specific points in the customer management process where you’ll routinely ask for
referrals from those who are highly satisfied. This must become ‘second nature’
and happen like clockwork as a normal part of our business process. Request their
answer to The Ultimate Question and then follow through appropriately to leverage
or salvage the relationship, depending on whether they’re positive or negative.

■ Make it Easy: Make generating referrals easy by providing helpful information and
aids. Give your best customers and promoters something of real value to offer to
friends and associates (e.g., coupon, gift certificate, easily forward-able email pieces
that emphasize the benefits they gained by buying from you, etc.). Sometimes, financial
incentives can be appropriate for the referring customer (e.g., discount on a
future purchase or a gift certificate), especially if they’re likely repeat buyers. This can
help to build your long-term relationship as well. Many businesses can build their referral
‘system’ right into the transaction. Social media can help here. Tell your referral sources
specifically what you’ll do with their suggestions and be sure to thank them.

■ Target Customers: Consider tailoring collateral materials specifically for referral purposes
(e.g., business cards, brochures, website, newsletter, e-newsletter, postcard-sized
invitation, personalized letter on your behalf, related educational materials, etc.) so that
your target customers (i.e., the 20% in your ‘strike zone’ that generate 80% of your profit)
receive a compelling message that takes them to their own special call-in number or
landing page on your website. Doing business with the ‘wrong’ customers slows us down,
as marginal customers still utilize the same resources as the best-paying customers and
can eventually dilute our focus and cause employee burnout.

■ Key Relationships: Specifically use the relationships you have with your best and/or most
influential customers since they carry lots of weight and know others like themselves who
would be high quality referrals. Also consider strategic affiliations with complementary
companies and organizations that also have your ideal customers as a target and can refer
you, perhaps based on a reciprocal agreement, based on historical experience and trust.
Consider co-branding ‘white papers’ for technical sales.

■ Vivid Company Values: Buyers are increasingly looking for suppliers with worthy values,
not just faceless marketers. Young & Rubicam, an ad agency with the world’s largest
consumer attitudes research data base, reports that kindness and generosity are among
the qualities customers increasingly demand most from business. Last year, Hyundai’s
buyer reassurance program, which promised that customers that had lost their jobs could
return their car, grew company sales 12% in a dismal market. We, of all people, shouldn’t
be timid in sharing our values as a basis for doing trustworthy business.

■ Consider Timing: With some businesses, it may be better to wait awhile after the sale,
until customers have had time to experience the benefit of the purchase, or after they’ve
become repeat buyers, before you ask for referrals.

■ Training: If your staff receives referrals from customers, train them in precisely how to
script their customer interaction to properly refer to the referring client. Be sure that
those answering phone, web, and email inquiries are able to quickly reference previous
customer records so they can smoothly handle incoming calls while knowing your
historical experience with the referring client. Provide relevant customer testimonials and
your sales logic to both internal and external referral sources. Be ready to request faceto-face
meetings with both high-energy referral sources and high-potential prospects.

■ Track and celebrate: Keep a referral activity scoreboard (e.g., initial leads, completed
connections, actual orders booked, NPS trend, detractor ‘turnarounds’) and recognize
departments, product lines, and sales territories that do a great job. Personally pitchin
to help establish or rekindle key client relationships. Remember, we’re creating a
referrals culture based on high customer satisfaction. Generating referrals is just the first
step. Next is converting them into actual client relationships that beget future referrals.
Be clear in conversations and marketing materials that your goal is to grow by referrals
and that highly satisfied customers are your best salespeople. Consider hosting referral
appreciation lunches with your best clients and creating an ‘inner circle’ focus group to
generate more ideas to expand and refine your appeal to target segments.

Consider these Top Types of Lead Sources
■ Existing regular customers
■ Previous, but inactive, customers
■ Prior known contacts/prospects from your database
■ Passive leads – coming from ads, web searches, PR, trade shows, direct marketing, third
party lists based on target customer attributes, campaigns, coupons, etc.
■ Referrals – generated by customers, employees, friends, suppliers, trade associates,
complementary businesses serving same customers, or prospects
■ Networking – personal associations, groups, and intentional face-to-face encounters (e.g.,
chambers of commerce)
■ Publications and directories – print and online industry and community news and
information (e.g., Thomas Register, local phone and community directories).