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Thinking Bigger Business Magazine

6 Simple Strategies for Generating Business Referrals

(As originally published in Thinking Bigger Business Magazine.)

As business leaders we have often been taught that our best source for new business is referrals from happy customers and clients. There is no better lead than one that has been sent your way through a strong referral. The challenge has always been how to get satisfied customers to actively promote your business.

Here are the six simple strategies for generating referrals that every smart business should consider implementing.

Have a plan. The old saying “if you fail to plan, you plan to fail” is true in life, and it’s also true when it comes to generating referrals. Referrals are not automatic. Some just happen, but most occur because you do something to trigger it. A well thought-out plan for reaching customers at the right time, with the right message, generates the types of referrals that will help your business grow.

Some business owners assume that a great product or terrific customer service will generate referrals by default. Not so. You have to learn to ask and make sure employees are on board as well.

Ask for the referral. Most customers are open to being asked for referrals. Some even appreciate the opportunity to tell friends, family and associates about something good they’ve discovered. It seems simple, but too many businesses either forget or are afraid to ask their customers for a referral. If you are doing a good job for your customers, and you are delivering on what you’ve promised, then you should always assume your clients would be happy to refer you, so ask them to.

Involve your employees in the process. Help your employees understand the value of a referral. Explain how each referral can help the company grow and become stronger. Teach them when and how to ask. For example, when a customer provides positive feedback, it is the perfect time to request a referral.

If you regularly survey your customers on performance and delivery, take that opportunity to encourage happy customers to refer you to another customer. One of the best ways is to follow-up a sale with a personal call within 72 hours. If the feedback is positive, it is the right time to ask for the referral. If not, it is a great opportunity to address any issues and build the relationship for a future referral.

Remind them to refer you. You should be talking to current and past customers regularly. Many would be happy to refer you, but often they do not know how to present you and your service to others. The best time to ask is immediately after delivering excellent service. The worst time to ask for a referral is at the cash register or when you present a bill. Look for opportunities earlier, or later, in the process when customers are more receptive.

Make it really easy. Happy customers want to help, but they don’t want to be inconvenienced. The first step is to let them know you welcome (even encourage) referrals. If you offer any incentives, make sure your clients know. Put slips in with newsletters, or provide them when you are delivering your products. Another opportunity to simplify the process is to include a form on your website and social media pages where customers can provide you with a name and email (or standard) address.

Don’t forget to stay compliant with the CAN-SPAM Act in your marketing to these referrals. Always be 100 percent transparent when it comes to the purpose of your message and honor opt-out requests promptly.

 Finally, always say “thank you.” Saying thank you may seem simple, but doing so is important and powerful. In many businesses, expressing thanks may be limited by law to a verbal “thank you.” In other situations, though, you can offer financial incentives. If you do want to offer a reward for a business referral, keep it simple. Any reward or incentive should be inexpensive and relevant to the size and number of referrals. The reward needs to be about your business and the customer’s experience, not about the gift they receive. Remember, most referrers are motivated to help you because you helped them, not because they expect a reward.

Generating referrals is not rocket science, but make sure it is a part of every touchpoint you have with your customers. Soon, it will become second nature.

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