With the internet came proliferation of choice like never before. With so much choice in the market, small business owners need effective marketing strategies to reach and retain clients. Referrals are one of the most effective marketing strategies for small businesses and nonprofit organizations. This is because most people typically trust recommendations from people they know.
When a client is satisfied by your services, they typically feel inclined to tell their family and friends about it. One referral can lead to a chain reaction of additional referrals and the ultimate growth of your business.
Why your business needs referrals
References have become an important currency for small businesses for the benefits they offer which include:
- Cost-effectiveness: Unlike costly marketing campaigns, requesting referrals cost little to no money and time
- Client retention: Clients who refer to your business are mostly loyal and enthusiastic.
- Improved conversion: New clients from referrals already trust those who referred them and are likely to advance through the sales process faster.
- Referral chain reaction: As more satisfied clients refer your business to their family and friends, the chain grows improving the chance of receiving more clients.
- Expanded client base: As more potential clients are referred to your business by people they trust, your client base grows.
How to Get More Referrals for your Business
As highlighted above, the instant credibility that your business gets from having your clients as your advocates has many benefits. Business owners should be using this marketing strategy extensively. Unfortunately, referral marketing is harder than it looks.
Most clients only provide low-grade referrals. For a high-quality referral, you need a client to provide more than just your business name and email address. Your client should actively talk about your service and bring the prospect to the door. Here are strategies to secure more and better referrals for your business:
Ask for referrals
Referrals are not automatic. While some clients may take initiative to refer your business after a terrific experience, you should not assume that a good job will generate referrals by default. Ask for referrals and you will receive. While you may get some pushback from some clients, most of them will be open to telling their family, friends, and associates about something they have discovered.
With referrals, your clients market your business without getting any direct benefit. Nobody likes to work for free. Your clients need to get something from the arrangement to keep them engaged and committed. In addition to expressing your appreciation via email, phone call, or handwritten note, you need to offer a tangible incentive.
The incentive will depend on your business. It could be service credits, discounts, upgrades, or a freebie to entice clients to give quality referrals. Test different referral incentives to find one that works best.
Network with existing customers and other businesses
Once you’ve acquired a new customer, you should not assume that they will remain loyal. You need to nurture the relationship by keeping them engaged. Stay in touch after the sale to build a long-term connection. Continue to provide value through check-ins, informative content, and additional offerings.
Effective business networking is not about asking for favors. It involves creating trusting friendships and relationships. Part of building a strong business network is partnering with other businesses for cross-promotion. You should help other businesses by referring them to your customers, providing testimonials, or promoting their business in other ways. Keep these relationships alive by reaching out a few times a year.
Create a form for referrals
You need to be cognizant of how busy your clients are. You cannot simply ask for referrals and hope that they will follow through. A more proactive approach to ensure that you get referrals is providing a fillable template to eliminate some of the heavy lifting.
An effective referral program can take your business to the next level. Use newsletters, blog posts, customer mailings, emails, or any other communication means you have available to market your referral program to your customers.