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If you’re running a small to medium-sized business, you've probably said to yourself, "I know I should be selling and finding new clients, but I'm just too busy taking care of business.” Besides, you're not a sales person. You imagine the horror of the dreaded cold call. “If only new clients and customers would knock on my door, I'd be set!" Most of us don't properly employ the most effective sales force we have, OUR CURRENT CUSTOMERS. By nurturing the relationships that we have with our customers we are able to turn our customers into our sales force and develop a thriving referral network. Some strategists believe that a mature business should be able to sustain itself through 80% referred leads and business from current clients. If you're operating on a limited staff, this is especially important considering that 50-60% of referred leads will become customers compared to only 15% on a non-referred lead, (cold call).
If you're waiting by the phone, hoping that Joe, (your best customer), will call you with a referral, you may be waiting for awhile. There is a formula for developing and maintaining a referral network. It doesn't just happen, even if your product or service is excellent. If you're not generating referred business, I would ask yourself these important questions:
1. Have I developed relationships with my current clients or customers?
People buy people first. Think of the last time that you gave the name of a friend to a business. What elements had to be in place before you would release their names? There's an element of trust involved with the referral process. Have you earned the trust of your clients and therefore the right to a referral?
2. Do I know what's really important to my customers, or am I only there when it's time to sell or handle a problem?
This goes beyond knowing that they like billing quarterly. Do you know what their outside interests are? What's happening in their business and industry? Do we thank customers for seeing us on short notice, or for paying on time? Do they welcome your calls or hesitantly accept them?
3. Have I let my customers know that I want referrals?
Don't assume that your clients will automatically give them to you. You need to ask. In asking for referrals, be sure to narrow the field for them. If you ask them a question like, "Do you know of anyone else who may be interested in my service?", you've given them too much to think about. They start visualizing their spouse, aunts, neighbors, etc. Get the client to visualize a specific group that may be potential clients for you. A more effective question may be, "Do you know of anyone in your professional organization that would be interested in our service?" Be sure to include easy to use referral forms on any newsletters or correspondence you have with your customers.
4. Do I reward referrals and give frequent feedback?
Thank you is often enough. So often we are given referrals and forget to communicate with the person who gave us the lead. Let them know what's happening with the referral, even if you haven't been able to make contact. Your client will appreciate your concern for the referral and this will help to build trust for future referrals. Most importantly, do you actively refer business to those who give you referrals? This will truly make the difference between receiving one referral and developing a referral network.
5. Do I participate in a "Swap Meet" or other referral network?
Swap meets are simply a planned effort to meet with persons who have the same potential customer base as your own, but are not direct competition. Swap meets can be very effective, as long as the members are team players. Hand pick whom you want to be on your team. Choose the winners, top performers in their fields.
6. Do I make sure that every experience my customers have is a positive one?
Make customers so happy they want to shout about it. On the average, a customer with an exceptional experience will tell three others within a month, while a customer with a bad experience will tell 11 in a week. Those 11 will tell three others. Our challenge in customer service and sales is to have more people experience the exceptional. If you have a problem, fix it fast. Customers accept that there will be problems. What's more important is how you handle the problem.
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