Are you getting enough new business from existing customers? Customer advocates are the heart of any successful, growing business because they help send you referral leads, for free.
A study by Wharton School of Business 83% of satisfied customers are willing to refer products and services. But only 29% actually do.
Today, I’ll show you six ways you can turn customers into advocates. These strategies will be backed up by real examples and give you actionable takeaways that you can use inside your own business.
Before getting stuck into the strategies, here is some research and findings to demonstrate why customer advocates are so important to a successful, growing business.
Why customer advocacy is so important
- A referral customer costs a lot less to acquire and has a higher potential for retention and loyalty. In fact, a referred customer has a 16% higher life-time value. (Wharton School of Business, 2012)
- Referral leads convert roughly 30% better than leads generated from other marketing channels. (Tony Nissen, R&G Technologies, 2013)
- Referral leads take a shorter time to close than regular leads. (Tony Nissen, R&G Technologies, 2013)
- Word of mouth is a primary factor behind 20 to 50 percent of all purchasing decisions. Its influence is greater when the products or services being bought are relatively expensive or need people to conduct detailed research. (Mckinsey, 2010)
- People trust friends and family more than virtually any other information source; they pay 2x more attention to recommendations from friends than other sources. (Mckinsey, 2010)
Now you why creating customer advocates is important in driving business success, let’s look at six ways you can turn customers into advocates.
1. Build stronger customer relationships
Building customer relationships is important in showing that you value your customers business. Stronger relationships lead to better trust between you and your potential customer advocate.
When it comes to business referrals, your customers are being put in a position where their reputation is on the line. If they recommend your services, and you don’t deliver, guess who loses? Yes, you might take a hit, but more importantly, your customer will have their reputation damaged.
To bring some perspective to the point, let’s take a look at an example. You ask a business coach (let’s call him Mr. MC Hammer) to recommend your services to his clients. The business coach has a number of different services he recommends and over years of doing business, has earned the trust of his clients. Each client knows that whatever service is recommended, it will deliver because in has done so in the past.
Guess what happens when MC Hammer recommends a stinker. MC Hammer recommends an SEO company that doesn’t deliver. His reputation is damaged, trust and influence is tarnished because of a bad recommendation.
This is what makes getting referrals hard. Through stronger customer relationships, you can build trust with customers and earn their referral.
2. Use customer satisfaction surveys to identify potential advocates
Identifying potential customer advocates is a challenge. There’s no secret formula to determining who they are, but there is something you can do to help; customer satisfaction surveys.
Customer satisfaction surveys give you the opportunity to ask customers what they really think of your service. To find out if a customer is a potential advocate, I recommend you ask this question in your survey:
How likely would you be to recommend us to your friends or colleagues?
- I would go out of my way to recommend <your company>
- I would recommend <your company>
- I wouldn’t recommend <your company>
This is a question we use in our surveys at Client Heartbeat. It also draws on some theory from the popular Net Promoter Score. The idea is that if someone would ‘go out their way to recommend your services’, you could assume they were pretty happy with the service or product you were delivering.
Leverage this insight to reach out to specific customers. R & G Technologies uses Client Heartbeat to identify their potential customer advocates.
“By leveraging the data from inside Client Heartbeat to identify our advocates, I’m able to ask the right clients for referrals. This has helped us grow over the last 12 months as the referral leads I get convert at around 90%.” – Tony Nissen, National Solutions Manager at R & G Technologies
3. Every communication with a customer is a referral opportunity
“I tell each of my employees to treat every interaction with a client as if they were going to ask for a referral at the end. This helps encourage a high level of customer service.” – Gordon Tan, R&G Technologies & Client Heartbeat
Every engagement with a customer is an opportunity to impress them and build a relationship. It also provides a great opportunity to ask for a referral.
Think about it, after you complete some work for a client and they’re really happy with it, you’ve got them in a high emotional state. Provided you delivered a good level of service, they’ll be more open to recommending some other companies that might find your services valuable.
This beats just calling customers out of the blue and asking for referrals.
Next time you engage with a customer that you think might be a potential advocate, just ask them; do you know any other companies that would find out services valuable?
4. Offer incentives (no cash money)
Referral programs are pretty popular. The standard way this works is you pay a flat fee, percentage fee or ongoing commission based on each referral that buys. The problem with offering cash based incentives is that sometimes company’s aren’t interested in money.
The solution here is to offer incentives that are not cash based. What I recommend you do is try get referrals over the line by focusing on adding value to your customers.
You can add value to your customers by offering extra training on new products, putting on a lunch for their staff, or even taking them out for a day Go Karting. Each of these examples shows that you are investing in the relationship and you care.
This speaks volumes when it comes to asking for referrals and creating customer advocates. You go a long way to building trust and your customers will feel more comfortable referring others to you. They’ll think to themselves – “If Ross invests this much time into me, I know Tony’s Accounting will definitely get some value out of his services.”
5. ‘WOW’ your customers by focusing on the experience
Zappos CEO Tony Hsieh demonstrates this best:
“We really don’t think that customer service is an expense that you should try to minimize, it’s really an investment in your brand. The telephone is one of the best branding devices out there. If you wow [customers] during that interaction, that’s something they’re going to remember for a very long time and tell their friends about.” – Tony Hsieh
Creating a customer experience that WOW’s your customers is something money can’t buy. People value service that goes above and beyond their customer expectations, and they tell others about those experiences.
It’s not every day you get a bouquet of flowers (read more), or you can return products that don’t fit, for free. Those little things build an experience that creates customer advocates. Zappos doesn’t have to ask for referrals, they just get them by keeping customers happy.
What can you do to WOW your customers?
Firstly, I recommend thinking about what your customers expect from your product or service. The easiest way to wow customers is by exceeding expectations. Think about some initiatives you can implement today, that will make your customers sit up and say, whoa that was great.
Drawing on a personal example, recently I was speaking to an Optus customer service rep via Twitter. They mucked up my delivery address and as a result, I hadn’t received my latest bill. Craig, the customer service rep offered to give me an extension on the bill and waive the late fee. This was unexpected, and as a result it WOW’d me.
Well done Craig, well done Optus. Thanks for exceeding my expectations.
What are you doing to exceed your customers’ expectations?
6. Don’t be scared to just ask for referrals
Asking for a referral can often be as intimidating as asking a woman out to dinner
Even with all the strategies in the world, some of you will still sit back in your office and not identify your advocates and ask them for referrals.
My challenge to you is just ask. Pick five of your loyal customers that you think might have some customers interested in your services. Next time you have a scheduled call or quarterly business review with them, put it in your notes to ask for a referral.
Use this line if you’re stuck for words:
Hey Bob, do you know any companies that would find my services valuable?
Customer advocates will help you grow your business through referrals
Referrals are warm leads that convert better and faster than any leads generated through online or offline marketing initiatives. Creating customer advocates and harnessing them to drive more referrals is a key component to all successful, growing businesses.
Turning customers into advocates doesn’t have to be hard. Studies show that you have customers that want to send you referrals but just don’t know how. Use the strategies I’ve suggested today to start identifying your potential advocates and encouraging them to refer you new leads.
I recommend these articles about creating customer advocates: