Author: Charlie Lawson, National Director BNI UK & Ireland.
Why referral marketing?
I’m going to start this piece assuming you’re keen to generate new business and that you want to do this in the most efficient way possible.
Typically finding new business is tough. You need to find prospective customers, reach out to them, find out what they need, tell them how you could help them, build trust, provide quotes, compete with other suppliers, remind them, call them…the list goes on and the commitment required can be significant.
Think about the last product or service you purchased of reasonable value and the amount of options you researched. If a friend had told you about a fantastically positive experience they had with the same requirement, how much more likely were you to listen to them, skip the extensive research and talk directly to that provider? I’m going to guess you would have been delighted to receive a recommendation and skip the trawling of review sites and magazines!
Flipping this – the benefit of this referral to the supplier was also huge. They didn’t have to spend all that time finding you, getting on your radar and demonstrating that they could do the job. Whilst they still needed to put the effort in, their chance of success was a lot higher and path to conversion a lot quicker than going down the ‘cold-calling’ route.
I’m sure you’re with me if I conclude that generating new custom through referrals is, by far, the most efficient method.
The benefits are multiple:
- You generate new business quicker
- The customer feels more comfortable, as they have been referred a trustworthy supplier by someone they trust
- The referrer feels good and has enhanced their own reputation (if you deliver well)
- Everyone creates a stronger network
- If you deliver well, you increase the chance of receiving more referrals
There are probably more, but let’s move on to how you can make the most out of referrals you receive.
Making referrals pay
Whilst referrals are the best way to generate new business, the job isn’t done once the customer’s details have been passed. You still need to understand the customer’s needs, prove competence and build a relationship…it’s just that this will be a lot easier than any other approach.
Below are 5 simple steps to consider when handling any referrals received. These help you not only convert the referral in question, but also to increase the opportunity of receiving more in the future.
1 - Thank the person who recommended you in the first place
A simple thank you and assurance that you’re following up with the prospect demonstrates your professionalism and your gratitude.
2 - Get in contact with the prospect promptly
If a prospect is in the market for a service you offer, they may not be for long, so you don’t want to miss out. Also, from the point at which your name has been mentioned to them, they are assessing your credibility and professionalism.
3 - Take the time to focus on the prospect’s needs
The best way of establishing trust and proving the faith that has been placed into you is to provide solutions that serve your prospect’s needs. The only way of doing this is to listen first and ask questions. Forget talking about your business or what you’ll do until you’ve found out about them.
4 - Follow-up with solutions that address the need
The method of follow-up will vary from business to business, but be prompt and ensure your proposed solution addresses the challenges your customer is facing. If you can further enhance your credibility with a relevant case study or a small piece of introductory work – fantastic.
5 - Update the person who recommended you
They put their faith in you and reputation on the line by recommending you. By updating them and thanking them once more, they will know that you have treated their contact with respect and professionalism. They are now far more likely to refer you again.
The details of these steps will vary from business to business, but the fundamental principles are common across all organisations. Whilst some steps may seem obvious, it is amazing how often people forget to follow them – it is often true that companies treat referred business with arrogance, assuming they’ve already won.
If anything, the opposite is true. Your reputation will have been built up through the recommendation and one false move could bring your reputation back to zero. Tackle the opportunity well and you can eliminate the competition.
Take the time, listen and repay the faith shown in you and the returns will be well worth it. Perhaps you’ll never need to make a cold call again.
Author: Charlie Lawson, National Director BNI UK & Ireland.
