Who doesn’t love referrals? It feels like a gift on Christmas morning when you get a new customer without having to do any expensive marketing or selling.
Referrals are great for business because the customers or clients you get through referrals generally represent a 16 percent higher lifetime value than your average customer. But even though referrals are valuable, you can’t rest on your laurels and just hope that they come in.
Instead, you should take a proactive approach and employ these unique strategies to get great referrals on a consistent basis.
1) Make it Part of the Agreement
There’s almost no better way to get referrals than when it’s formally agreed upon in writing! Your agreements with a client or partner may center around details like payment and expectations, but you can include anything you want in a contract, as long as the other side agrees to the terms.
Is it premature to ask for a referral before any work is done? Not necessarily.
This approach shows that you are confident in your own abilities, and also that you’ll be determined to do what it takes to satisfy your client.
With that said, it’s important not to go overboard. Make it clear under what circumstances you expect qualified referrals from the client, such as meeting the first defined goal by an agreed upon deadline. Building referrals into your contract will start off the relationship with the understanding that you expect referrals for a job well done, which makes it a lot easier to actually receive them on the other side.
2) Give a Referral First
Have you heard of Robert Cialdini’s instant classic called “Influence: The Psychology of Persuasion”? In the book, Cialdini details six rules that can help you get a “yes” response out of someone else.
One of those rules is the Rule of Reciprocity, which states that we are bound to repay all of our debts. If someone offers to get the check when you go out to eat with them, you feel inclined to get the check the next time. It just doesn’t feel right to “owe” someone, almost on a gut level.
You can play off of this psychological principle with referrals by simply striking first. If you want a referral from a great client, start by referring them new business (as long as the referral is relevant and appropriate).
Then, make sure you bring it to their attention that you’ve been referring them business, and mention that you’d appreciate the same. While there’s no guarantee, you’re much more likely to get referrals from companies you’re currently referring business to. It’s the Rule of Reciprocity at work.
3) Use Referral Links
If your business has an email list and an online store, you have the perfect setup to ask for countless referrals automatically. Get comfortable with the “shameless plug” of asking your current customers to share your content or emails with their friends.
Thank you pages are also a phenomenal place to include referral links. After all, your customer has already opted in or made a purchase, so they’re most likely to feel that you have something valuable to offer. A “mailto” code can make it easy for those customers to email friends directly from a webpage. In emails themselves, just ask if they would forward the email to a friend.
Along those same lines, social sharing buttons for Facebook, LinkedIn, and Twitter can help you reach your customers’ friends and connections for some great online word-of-mouth. Individual online referrals may be less reliable than one-on-one referral requests, but the sheer numbers can easily make up for that.
4) Offer a Referral Commission
I know, we made it sound like referrals were completely free, but bear with us. Acquiring any new client or customer costs money, whether it’s through a marketing campaign, an ad, or the salary and commission of your full-time salesperson.
So, why should referrals be any different? It’s definitely nice when they come to you for free with no effort on your part but if you want consistent referrals, you might have to up the ante a bit. Referral commissions are just what they sound like: a fee or incentive given to anyone who sends you a referral.
A referral commission might sound like it costs too much money, but ask yourself this: Would you have gotten that referral if you hadn’t offered a commission? In some cases, the answer is yes, but often you’re providing an incentive for someone to take the action to refer when they otherwise wouldn’t bother.
The percent you pay depends a lot on your industry, but make sure it’s large enough to be worth their trouble, and that it’s competitive with what your competition may offer. Lastly, don’t neglect to give them a “thank you” on the phone or send them a personalized note to show you appreciate them.
Note: For referral commissions or fees, make sure it’s legal for you to offer this in your industry. In real estate, for example, it’s legal to pay fees to brokers, but not to others in that industry. You don’t want to get into issues of conflict of interest, so use your discretion!
5) Use a Referral Template
You’ve just finished a job for a great client, and everything went well. You hope the client will turn around and send some referrals your way, but you can’t know whether they’re going to.
Fortunately, you have a referral template and a calendar reminder to reach out to satisfied clients with a referral request. If you have a CRM like InfusionSoft, you can even automate this process.
In the template, simply send them an email with a script they can fill in and forward to their referral. It can look something like this:
I’ve been working with [salesperson/company] for the past [amount of time]. I’m really pleased with what they’ve done for us so far, and I thought they could help you too.
I hope you guys can touch base.
Talk to you both later!
Email a script like this to your client as a gentle nudge to give you a referral. Remind yourself to check back in a few weeks to see if they sent anything. If not, it’s best not to press the issue too much — but at least you’re making it as easy as possible on the clients who really want to send new business your way.
BONUS: Be Referral-Worthy
You probably noticed that extra “half” way to get great referrals mentioned in the title of this post. Well, it’s kind of an odd duck, but this little half-reason is crucial for these five referral strategies, as well as any others: Be referral-worthy.
No amount of referral marketing or begging will get clients and customers to send you referrals if your product or service is poor quality, your prices are too high, or your customer service is lacking. In fact, just being good — or even great — isn’t always enough to justify a referral these days.
Always be looking for ways to exceed expectations and blow people away. Make it impossible for them to ignore your excellence, then implement the unique strategies above — referrals are sure to follow!