Updated: Jan 15
Referrals are one of the best ways to grow your business, but they don't happen by accident. You have to put in some time and effort. In this post, I'll show you how to get more referrals from your clients by following a few steps that will help increase the likelihood that they will refer you in the future.
What is a referral?
A referral is a client who refers you to someone else. This is great! Why? Because they have already been happy with your services, and so they're likely to refer you for more work.
Not only does this mean that referrals can be a great source of income, but it also helps your business grow. You can expand faster than if you were relying only on new clients coming in through ads or online marketing campaigns.
Plus, the more people who know about your company and its good reputation (thanks to those happy clients), the more likely it is that new prospects will come across your business in some way—and potentially become customers themselves.
92% of consumers trust word-of-mouth recommendations from people they know over all other sources ~ Nielsen
Referrals are one of the best ways to grow your business.
Referrals are one of the best ways to grow your business. They’re more likely to be happy with your service, they’re more likely to refer you, and they are more likely to buy from you. Plus, referrals cost less than other forms of advertising.
Here's a quick overview:
Referrals work—more than any other lead source. According to a study by Nielsen, 92% of consumers trust word-of-mouth recommendations from people they know over all other sources. And we know that if someone is happily using your product or service then there's no better way for them to tell others about it.
It's less expensive than advertising! The average referral costs about $10 per sale (it varies based on industry), compared with advertising which can cost anywhere from $20-$50 per sale depending on what type of media you use (direct mail vs newspaper vs radio ads, etc).
The lifetime value of an existing customer is almost always greater than that of a new customer through advertising channels.
How to get referrals from your clients
1) Just ask. But be sure to ask at the right time.
Just ask. But be sure you also ask at the right time. An appropriate time to ask for referrals is when you are in a position of strength with your client.
For example, when they have just received something they wanted from you or when they've had a good experience with your products or services.
You can also use specific events as an opportunity to get referrals from clients: whether it's an anniversary or some other special occasion for them (and thus for you). You could even offer some sort of incentive if this is something that would motivate them (e.g., "As a thank-you gift for being such an awesome customer, here's $20 off next month’s invoice").
Another tip that works well is asking your clients if there are any friends or family members who might benefit from what you offer and then passing along their contact information—just be sure not to come across as overly pushy.
2) Partner up with complementary businesses in your area.
The business you partner with should be complementary and not competitive.
The partnership should be mutually beneficial for both parties, as well as the customers each serves.
The business you partner with should be in the same industry but not the same market. For example: if your company is an accounting firm, you could partner with a law firm that provides estate planning services or other complimentary work (but not direct competition).
3) Create a unique and relevant rewards program
Rewards programs can be used to motivate your clients to refer you. You can give them a discount on future purchases, or even create a referral rewards program that gives them points they can use to get gifts.
Rewards programs can also be used to thank the person who referred you, both financially and non-financially. This could mean making sure your client feels appreciated for having recommended you, or it could mean rewarding them with something special when it comes to their next purchase.
In addition to these benefits of creating an effective rewards program (both for the client and for yourself), doing so will also make your company appear like an organization that appreciates its customers’ loyalty—which is exactly what every good business wants.
Be sure to set an incentive program that is two-sided. And have fun with it. Test out different incentives to see which ones are most appreciated or better yet have a list of items people can choose from.
4) Be Social
Of course, social media is an excellent way for businesses to connect with potential customers and generate referrals. Be sure to invest in your social media presence and use it as an opportunity to generate referrals.
Promote your referral program in your social media channels (and all your touchpoints like email, your website, etc).
Share client testimonials (with approval from the client of course). While not a direct referral, this is a great way to build trust and credibility with your followers and encourages someone to reach out.
Encourage clients to post on social about your business. If they do, send them a thank you note and share it. \
Or better yet create a surprise and delight program and send your top customers gifts when you send them their orders or when they are signing papers. The focus here is surprise. They should not be expecting it.
5) Make referrals easier with a special promotion.
Offer something special or unique that your competitors don't have—a special promotion or exclusive offer for example. This will help differentiate you from other businesses in your industry and give your customers an incentive to come back again and again.
6) Be helpful.
One of the best ways to generate more business is by being helpful.
You can earn referrals by offering to help online, even if you're not directly connected with the people needing the help. When you share helpful content on LinkedIn
If you're willing to answer people's questions, even if they don't need you specifically, your helpfulness can go a long way toward building trust and making potential clients feel comfortable asking for your help when they do need it.
Here are some ideas for being helpful:
-Share helpful blog posts on LinkedIn, Twitter, and Facebook—wherever your audience is likely to see it. (And make sure they're written in a way that makes it clear they're meant for everyone.)
-Answer questions on forums or in comments sections of articles related to your area of expertise. Just be sure not to spam other threads with your own links or ads.
7) Try affiliate marketing
Depending on your business you can try affiliate marketing. Affiliate marketing is where a business pays a commission to a blogger, influencer etc. for sales (or website traffic) generated for their business. This is usually done through an affiliate link on the blogger's site or in their social media post. There are a number of free and paid affiliate programs out there so be sure to do your homework before choosing one.
Reminder: Allow clients to say no.
You should always ask for referrals, but the way you do it is just as important.
You don’t want to be pushy. You’re already going to be asking your client for a favor by asking them for a referral, so there's no reason to come across as demanding or insincere.
And you also don't want your prospective client to think that you're unprofessional by being too casual; so if they're talking about their kids' football games, don't ask them what school their kids go to or when their next game is (even if those questions are on your mind).
On the other hand, you also don't want them feeling like they can't trust you because they feel like they're being interrogated; so stay away from overly-specific information unless the person specifically asks where else has worked before (and even then only answer in general terms).
Be sure to show appreciation to those who refer you.
This one is critical. By saying thank you, you help clients feel appreciated.
Host a thank you dinner. A great way to show appreciation is by hosting a thank-you dinner at your office or another venue. This can be especially useful if you’re in a business that involves food, like restaurant consulting or nutrition counseling. But this is also great for real estate or investment professionals.
Give them a gift. If your client has referred someone who ends up hiring you, give them something as a token of your gratitude. Consider sending something unique like an eco-friendly candle or something classic like a pen and journal. There is a lot of boring swag out there so be sure to stand out with this one so your item is appreciated and used often.
Invite them out for drinks with colleagues from both sides of the referral relationship. You can also do this during lunchtime one day as a break from the office.
In conclusion, we hope you’ve gained some insight into the power of referrals. They can be your most effective tool in growing your business and generating more revenue. Looking for other marketing ideas? Be sure to read our recent post on How to Use Digital Marketing for High-Net-Worth Individuals or How to Effectively Use Social Media Marketing for Real Estate.