Don’t expect any Business Referrals unless you follow these 5 rules

business referrals warning

In today’s world, your most powerful salespeople are no longer the one’s you pay the big money to close the deals. You’re most powerful salespeople are your advocates – your customers that are generating business referrals and positively raving about your business to their friends and associates.

These customers are helping you grow your business by drawing potential leads away from the dark mass of your competitors and towards your bright light of hope.

Jeff Bezos, famous entrepreneur and investor once said, ‘If you do build a great experience, customers teach each other about that. Word of mouth is very powerful.’

Researchers have backed up Jeff’s thoughts with research finding word of mouth (WOM) has a greater impact on consumer behavior than traditional marketing methods. In other words, customers are more likely to listen to their mates recommendations, than a stranger on the web, TV or radio trying to sell them something.

Here are five rules you must follow to help generate business referrals:


1. Give customers a reason to refer you

It’s an undeniable truth the person who cares most about growing your business is you. So why should customers care about generating you business referrals?

Customers feel valued when you give them the best, targeted products, exceptional customer service, and blow their expectations out of the park. In addition,  researchers have found interpersonal relationships between employees and clients are significantly correlated with WOM behavior. So if you build a rock-solid foundation of efficiency, empathy and good service with your client, they’ll trust you and want to help you.

The key here is to outdo the client’s expectation of you that it makes them want to bring you to their network of peers as a solution.

See also: Struggling to generate business referrals? Try Increasing Customer Satisfaction using these strategies.


2. Ask customers the right way

Many businesses know ‘who’ to ask, but they don’t know ‘how’.

If you scour the Internet, you’ll find scores of advice on the ideal time to ask for business referrals. But the truth is, there’s no ideal time to ask. Instead, integrate asking into your sales process from the very beginning, so customers are already thinking about your best traits. Remind them throughout, and request politely after they’re fully satisfied to jog their memory.

When asking for the referral, don’t limit yourself by saying, ‘Do you know anyone else who might want my product?’ Instead, broaden your question and your potential service list, i.e. ‘Do you know of anyone who has similar issues to you, which I can help with?’ Mention you’d be happy to reciprocate, and don’t be afraid of looking desperate.

Asking for WOM business referrals is a lot less embarrassing than relentless in-your-face ad campaigns, because at least you know the people at the end of the communication chain are actually listening.

See also: Client Heartbeat is a tool that surveys your clients, asks them for testimonials, and shares them across LinkedIn, Facebook and Twitter.


3. Resolve customer issues quickly

As soon as a customer notifies you of a problem, plead forgiveness. Then work tirelessly to fix the problem and send regular notices regarding progress to keep your customer in the loop.

According to Newell-Legner, ‘It takes 12 positive responses to make up for one unresolved negative experience.’ If you leave the problem too long, you’ll have to work extra hard to repair that relationship. However, resolve the issue promptly, and that person will tell 4-6 other people about their positive experience.

If you want WOM, make every experience a positive one. Counter your client’s disappointment with out of this world customer service and you’ll be the latest news amongst their friends.

See also: 12 Customer Retention Mistakes that are hurting your business


4. Use social media to generate business referrals

Since your customers can now consult each other over the Internet, the days of your voice being expert on your business’s abilities are gone. The fact is, ‘People trust friends and family more than virtually any other information source, and pay 2x more attention to recommendations that come from friends than other sources.’ This is why social media platforms like Facebook, Twitter and LinkedIn are such an asset to your client acquisition strategy.

Many clients would happily write a business referral, but don’t know how to go about it. According to American Express, 48 per cent of Internet users tell other people ‘all the time’ about a good customer service experience with a company. You can make these testimonies timeless by setting up a social media page and having them ‘share’ how much they love you with their friends. Not only does this provide you with a permanent, published list of written business referrals, you also get a throng of free salespeople selling your product for you.

See also: How to ask for a testimonial


5. Remember to say thank you for every referral

Always express your gratitude when a customer refers you. While it’s true clients who refer you aren’t looking for a medal, everyone likes to feel appreciated. A basic thank you letter, verbal thank you, or reciprocal referral is enough encouragement to keep people spreading the word.

Maritz Research found 85 per cent of customers were delighted to receive a public response to their comments on social media regarding a brand. Remember to stay in touch with these customers because you never know when they’ll need additional services. It’s basic stuff, follow through with every business referral, and contact your customer to say thank you to keep those new leads pouring in.


Referrals done right can fuel business growth

Business referrals can be explained with this simple analogy. Customer service is like a steak. If you go to dinner and have the best damn steak you’ve ever had, you want to take your friends. Deliver the most exceptional service that client has ever had the pleasure of experiencing, and no doubt you’ll be seeing your client’s friends after the steakhouse.

Client Heartbeat surveys customers and asks for Client Testimonials. Use these testimonials to drive new business referrals.

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Gordon Tan

Gordon Tan is an entrepreneur based in Australia who has started and sold multiple technology companies with a combined value of $150m. This included a client satisfaction benchmarking platform which gave him first hand insight into the best practices of over 6,000 businesses. After retiring at 35 he is now a recognised thought leader on winning and retaining clients - His two passions: making clients the heartbeat of a business no matter what the product or service and this blog.

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