How Can You Grow Your Business Through Referrals?
Do you actively encourage people to refer your business to others, or do you just wait for a nice referral to come along? Are you doing anything to encourage more people to recommend you, or are you one of those people who doesn’t like to ask?
Referrals are one of the best ways to promote your business and yet too many small business owners don’t make the most of them. As part of the on-going series looking at the best marketing for a service business, based on what works for us at Appletree, this issue of Scribbles is all about referrals. Read on to find out how you can use them more effectively.
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How Can You Grow Your Business Through Referrals?
When you’re looking for a new service provider, how do you go about doing it? When you need a new accountant, IFA or someone to service your car, how do you find them? Chances are, you ask people you know to recommend someone. Why? Because someone won’t recommend a business to you unless they trust them. If they trust that person with their finances, their pension or their car, you can be pretty sure that yours will be in safe hands too.
You may also have noticed that people who have been recommended to you are much easier to sell to. They’ve already been told great things about you by their friend or colleague, who they trust, so turning them into one of your clients is relatively easy.
However, rather than just waiting for referrals to come along – or hoping that they will – what can you do to encourage more of them? Let me give you some examples.
How do Referrals work for our clients?
Barry runs a number of fun, energetic camps for children
during school holidays. The camps are currently held at a number of private schools around Oxfordshire, which have really good facilities. The children who attend the camps regularly go home fitter and healthier after a week of camp, than when they arrived. They get to take part in a huge range of activities, including swimming, archery and canoeing.
The vast majority of new clients – the parents of the children – find out about the camps because their friends recommend them. Happy parents, whose happy children come home tired and well looked after, are happy to recommend Barry and his team to their friends. The business runs a referral scheme, where anyone who refers a friend, whose children are then booked into camp, can receive free days for their own children, or a bottle of champagne. There are some children who have had many weeks of free camp, as a result of all the referrals that their parents have made to their friends and their children. The referral scheme is advertised in the weekly newsletter that the business emails to clients; and it is on their website too.
However, there are also many parents who turn down the bottle of champagne or the free days of camp. Why? When they’re asked, they usually reply “Please just look after my friend’s children as well as you look after mine.” They want their friend’s children to experience the same fun, energetic camp that theirs enjoy. This means that the best way for Barry’s business to encourage more referrals is not by asking them, but by focusing on the quality of the service that they provide.
Can you encourage more referrals by providing the best possible service and by really looking after your clients?
How do Referrals work for Appletree?
Nearly half of the new clients who come to Appletree come because we have been recommended to them. (Nearly half come from networking. We know this because we measure our marketing – more of that in another newsletter.)
Last year we made a number of changes to the way we work at Appletree. I’d taken my eye of the ball with a few clients and then found out that they weren’t that happy with the service they were receiving. So I spent a lot of time on the phone and meeting clients, to talk about what they really wanted from us and whether our ‘new look’ service would suit them – or not.
One client I spoke to at this time, told me that actually he didn’t like what we were doing and that he was close to leaving us. I was devastated as I hadn’t realized how bad it had become. It took a number of long (and not particularly easy) phone calls and a meeting to work out the best solution for him. In the end, we agreed to carry on working together, with us providing exactly the service he wanted.
Having a happy client was the result I was looking for, but the benefits were better than that. Not long after sorting out these issues, this client recommended us to another business who needed some marketing help. I went to see them and within a short meeting, they had booked us to do lots of marketing for them. “Do you want to know more about Appletree and our credentials?” I asked them. Their reply was “No, because if Simon has recommended you and is working with you, we know that you’ll do a great job for us too.” How good was it to hear that!?
How can you turn your clients into raving fans who recommend you?
When is the Best Time to ask for a Referral?
Many people are wary of asking for referrals, thinking that it might sound a bit pushy. There is a very comfortable way to ask for referrals. The next time someone thanks you for helping them to solve a problem, ask they who else they know who might be looking to solve the same problem.
You can do this with both clients and potential clients. They ask you a question – “How can I encourage more referrals?” You give them the solution – “The next time someone says thank you.” They say “Thank you very much for helping me.” You say “Who else do you know who needs help getting more referrals?”
When someone thanks you for helping them, they think you’re great because you’ve just saved them some time or money. They appreciate what you’ve just done for them, so they will be quite happy to spend some time thinking about who they could recommend you to.
Give it a go and let me know how you get on!