Referrals from friends and colleagues carry even more weight. In fact, they convert 30% more often than leads that come from other sources.
That’s why you need to set up a referral program to encourage customers to send their friends to you.
But wait… won’t happy customers just refer their friends as a matter of course?
Some might – but most won’t. You need to ask. So, let’s talk about some simple things you can do to get more customer referrals.
Step #1: Identify Potential Referral Sources
Referrals can come from many places. Before you decide on the parameters of your new referral program, you’ll need to think about who can provide you with the kind of qualified leads you want. Here’s a run-down of the most likely sources:
Ask for Referrals
The first and most obvious way to get referrals is to ask for them. A lot of businesses skip this step and they miss out on valuable referrals as a result.
Are you wondering why you need to ask? This statistic might explain it. A study at Texas Tech University found that 83% of consumers were willing to refer acquaintances to a business after a positive experience. But – and here’s the corker – only 29% of them did!
Why the gap? It might have something to do with not being asked.
There are lots of ways to ask for referrals. Here are just a few:
Pinpoint Companies Who Share Your Target Audience
One of the best ways to get referrals is to start with your audience and work from there. In other words – when was the last time you identified local businesses who target the same consumers you do?
Let’s look at a sample audience to illustrate the point: parents with young children. Here are some businesses targeting that audience that might be able to refer customers to one another:
Attract Referrals with Shareable Content
Whether you’re writing a blog post or creating an infographic to share on Pinterest, you should create content with referrals in mind.
Think about it this way. When people share your content, they’re also sharing information about your company – even if only indirectly. Any person who sees your content might be a potential customer.
Create content that provides clear value to the people in your target audience – and then encourage your existing audience to share it. Again, asking is the key. Some people might share your content, but many will only do it if you ask them to.
In a perfect world, customers, friends, and family would refer you out of the goodness of their hearts. But… we don’t live in a perfect world.
The solution is to give people a reason to give you referrals, something that goes beyond doing a good deed for you or a friend. It’s perfectly acceptable, and even desirable, to incentivize your referral program.
Here’s an example. I knew a factoring company that offered existing clients one month of free factoring if they referred a new client who signed up. That was potentially a big incentive – factoring isn’t cheap! But the owner of that company got a lot of referrals from clients as a result.
If you decide on this type of referral, make sure to specify under what circumstances you’ll pay out the incentive. A small incentive, like a free basic product or a coupon, might go to anyone who offers you contact information, whether the referral comes to fruition or not. But, if you’re offering a big prize, like a bonus or a free service, you might want to require that the referral turns into a customer before issuing the prize.
Referrals are a great way to grow your business…
And they can help you build up a lot of good will with the people around you. Instead of hoping that people will refer new customers to you, go out and make it happen. A coherent, consistent referral program will help you increase your profits.