Before ordering a book on Amazon.com, potential buyers can read reviews written by other customers who have read the book. On eBay, sellers live and die by their customer feedback ratings. And in more than 120 cities in the U.S., people can find a plumber, carpenter, carpet cleaner and a host of other services through something called Angie’s List, which is like an online service directory with reviews that consumers pay to access.
Reviews, feedback, ratings … it all may seem very 21st century, but really, these are just new words for an age-old business concept, “the referral.” Potential customers have always trusted those who have already bought something to tell them if a product or service is worth their money. In short, people trust previous buyers more than sellers.
Would you select an eye surgeon based on a noisy “two-eyes-for-the-price-of-one blowout sale” radio advertisement or your sweet grandmother’s testimony that after her surgery she can read the fine print on her prescription bottles from 20 feet away and she never felt a thing during the procedure?
GRANDMA KNOWS BEST
Clearly grandma is more credible to you because you’ve known her your whole life and she’s never steered you wrong. And that’s the beauty of referrals: when a customer refers you to their friend or relative, your business gains immediate credibility, even if the friend has never heard of your company before.
Good old word-of-mouth referral is the cheapest form of marketing there is. And effective too. But for as long as referrals have been around, business people have had hang-ups about them. Mainly, they just expect them to happen, are confused when they don’t, but are shy about asking for them.
Referrals work because they don’t just blanket a wide, general audience; they go directly to individuals who actually need your particular product or service. For example, if a company does a great job painting my house, I will refer that company to the guy across the street whose paint is peeling. He’s a definite prospect for the painter.
However, if the painting company does a mass mailing of flyers, at least half the flyers might go to people living in homes with vinyl siding. This doesn’t mean businesses don’t benefit from other forms of advertising and that flyers might not be helpful. But referrals are targeted marketing at its finest and free on top of it, and therefore should not be left up to chance.
Here are some ways to make sure referrals happen for your company:
Bring up referrals early in your relationship
Discuss the possibility early on in your relationship with a customer. There is no harm when agreeing on contract details to throw out a request for referrals when the job is done. For example, you might say, “Our service people will check on the restrooms at your event twice a day to ensure they are clean and well stocked. We hope that if you are happy with the service we provide, you’ll refer our company to others.” It’s really another way of saying how serious you are about providing good service. You are telling the customer the restrooms won’t just be clean enough to get by; they will be clean enough to make them take notice and tell people about it.
Ask
While it is the essential first step, doing a good job isn’t always enough to get referrals. When you’ve successfully completed a job, it helps to specifically ask the client if they know anyone else who could use your services. Don’t do it in a desperate sounding way, but in a we-just-want-to-be-helpful sounding way.
Supply extra materials
Give a happy client more than one business card and more than one brochure. That way, they have something physical to give their associates when referring your company, and a constant reminder on their desk to actually make the call and refer you to someone.
Offer incentives
This is where referrals stop being absolutely free, but an incentive may inspire repeat customers to give you referrals. If you offer 10 percent off their next bill for every new client a customer refers to you — and who signs on the dotted line — they might think longer and harder about who else could use your services.
Think beyond customers
Referrals don’t just come from existing customers. Ask vendors, suppliers and acquaintances for referrals, too. If your accountant’s brother’s daughter is having a huge outdoor wedding, guess which portable restroom company will pop into his mind over drinks when he’s consoling his brother who is overwhelmed by the burdens of being the father of the bride?
Join a group
In many communities there are organized networking groups. Typically, only a single company representing each profession is allowed in the group: one plumber, one lawyer, one electrician, one portable restroom operator, etc. Everybody gets a chance to talk to the group about his or her particular company. Often members end up hiring others from the group when they need the particular services a member’s company provides. Group members also refer the businesses of fellow members to people they know outside the group.
Say thank you
Even if you don’t have a formal referral incentive program in place, it’s good form to send a personal letter on company letterhead thanking whoever it was who referred you to a new customer. If they think they went through the trouble of referring you and you didn’t even notice, they aren’t likely to do it again. A small acknowledgement can go a long way toward securing future referrals from an individual.
FINISHING TOUCH
One last thing. The referral system should not be a one-way street. Don’t just think in terms of who can be a referral for your business; also think in terms of who you can refer your customers to. That’s a system even more ancient than the referral system. It’s called karma.
