Why You Need a Formalized Referral Process
The value of a good referral should not be underestimated. Not only do they help you acquire a new prospect without the typical marketing investments you would otherwise make, but they also typically enter your marketing funnel much closer to the purchase point than the average lead does.
However, don’t make the mistake of thinking that referrals will start flowing in without some effort on your part. Let’s discuss the processes you must adopt to encourage your clients to provide you with referrals.
Why You Can’t Rely on Organic Referrals
If you treat your clients well, they will probably talk about you to their business associates, maybe even friends. That’s a pretty safe assumption to make. If they find out that another business is suffering from the same problem that you’re actively helping them avoid, they very well might mention your company to them.
The key word here is might. They might mention your business.
Wouldn’t you prefer that your client would definitely mention your business, or even better, give that associate your contact information or mention that associate to you directly? Of course, you would.
The problem is that there is no incentive for your current client to do so. You may have built up enough goodwill with a few of them for them to actively vouch for your business, and that’s great, but can you say that about all of your clients?
Simply because your client isn’t the one invested in the problem at hand, you can’t assume they’ll take the initiative to help solve it. So, how do you fix that?
It’s simple: formally incentivize your clients to generate referrals.
Now, the word “formally” is important in this context. It isn’t enough just to reward successful referrals—you need an established process to help coax your clientele to take the initiative. Otherwise, you may leave many leads and prospects on the allegorical table.
So, how do you go about creating this process?
How to Encourage Referrals
Your first step is to have a page on your website that is simple and easy to access to collect these referrals. In addition to the form to collect the necessary contact information, your referral process should be outlined on this page to clear up any questions your potential referrer may have. Once this page is running, you must drive your clients to it. Educate them about your referral program and the incentives you should have for participants. These incentives need to be specifically described, with all stipulations clearly outlined. For example, if a client refers a business, they may get x-service for free, but only if the referred business signs a contract or invests so many dollars into a service. Alternatively, your program could have tiered reward levels, based on what services are referred or the size of the referred business. Whatever you land on, these stipulations need to be outlined in full, but concisely.
How You Can Push for Referrals
We recommend nudging your happy clients toward giving referrals whenever possible. For instance, any opportune time during a phone call or service visit should be capitalized on, and the same goes for your quarterly business reviews with these clients. You can (and should) also use other marketing efforts to push for referrals. You might:
- Share your referral program on social media
- Email your clients about your program
- Include a blurb in your newsletter explaining your referral program
- Dedicate a letter or postcard to it and its features
Whatever course you take, you should include a link directly to your referral page for convenience.
How to Capitalize on Your Referrals
In addition to the process you create to encourage referrals, you need to have a process to fully take advantage of any you receive. Otherwise, you could lose your new prospect through various factors, whether in the form of a slow or lacking response to them or miscommunication between your staff members while the prospect is onboarded. You might also want to involve the referring client in the process, to reinforce your gratitude and ensure they know they helped make a difference. They aren’t trying to replace themselves as clients, either, so don’t leave them hanging as you focus on the business they’ve referred. Communicate the next steps of your process when they submit their referral and when you’ll check in with them next. The important thing is that you keep the referral process as smooth and straightforward as possible. Otherwise, you’ll not only have a hard time taking advantage of the referrals you get, but your current clients will be less inclined to refer businesses to you.