How to Generate More Revenue and Customers Through Referrals

18 Oct
Generating More Revenue and Customers Through Referrals

This is a guest post by EGF Consulting Corps member Lisbeth Calandrino.

Referrals are the lifeblood of all businesses, large or small. The challenge is to create referrals with efficiency and regularity.

According to global data analytics company Nielsen, “84% of consumers say they either completely or somewhat trust recommendations from family, colleagues, and friends about products – making these recommendations the information source ranked highest for trustworthiness.”

My experience leads me to believe that most businesses spend more time seeking new customers rather than working with current customers. The stats tell us that current customers are inclined to buy again, trust you, and are less likely to quibble about price. According to research done by Frederick Reichheld of Bain & Company, previous customers will also send you a customer who is pre-sold!

Could it be that selling is more about “the hunt” than making money?

I often hear salesmen brag about the size of the sale. I rarely hear them talk about the process to get the sale. If you want to build your business, you will have to ask the customer how they found out about your business. If a current customer sent them, make a note and be sure to thank them. It’s one of those instances where quality matters.

The best salespeople don’t rely on store traffic. They rely on their ability to create relationships that will continue to bring in more customers. I remember speaking with a store owner whose best salesperson was a part-time employee with customers that were all referrals. She treated them as if they were family. On her days off she socialized with them, played golf, and joined them in pickle ball at the gym. Creating relationships was second nature to her.

So, what can you do to increase this profitable aspect of your business?

First, ask and you will get—maybe! Are you worthy of a referral? You wouldn’t ask for a referral from a customer who’s not happy or had a bad experience, would you? When the customer tells you how grateful they are for your help, thank them and ask if they would leave you a written testimonial or tell a friend. This can only happen if you’ve “done right” by your customer. If you're not sure how you did, just ask them.

Don’t forget to ask for an online referral. You may be computer literate, but that doesn’t mean your customers are. When you ask for a testimonial, explain to the customer where they can leave their comments; don’t assume they know how to use technology. If they don't, offer to show them.

At the end of the sale, you can thank them for agreeing to leave a comment online for you, and let them know how much it means to you and your business.

Give your referred customer the recognition they deserve. Greet them with a real smile, let the corners of your mouth touch your ears! (That’s how a little girl in kindergarten described a smile to me.) When you get a customer who says your friend from their yoga class sent them, show some genuine enthusiasm. If you want referred customers to get you new customers, give them respect and recognition. Show interest, and chat up your friend who gave you the referrals. The idea is to continue reaching out to potential referrals.

Revenue and referrals go together. You don’t have to own a business to understand the expense of advertising. Even social media marketing can add up; forget the cost of print and television. Referral business, or word of mouth, is cost-effective and most efficient.

Reach out to your customer after the sale and thank them! Send a note to the person who made the referral. A friend of mine is a top salesperson at a high-end car dealership, and his secret is that he sends all customers a thank-you note on personalized stationery. He feels that text and emails are too impersonal. He’s convinced this is his edge.  

Research your customer base. What hobbies do your customers have; where do they hang out online? To understand more about the importance of the customer's journey, refer to Google's The Zero Moment of Truth. In order to understand your customers, you will have to follow them on their journey, and intervene before someone else does. Therefore, it's important to have as many satisfied customers as possible. You never know when you’ll have to use someone’s name!

Hold events in your business and invite all your customers. Customers love to feel special and want to have fun! This isn’t just an opportunity to showcase your products, it’s an opportunity to celebrate. If you want to expand your customer reach, consider working with a non-competing business to hold a joint party. Options can include a cooking class with a local chef, a game night, or bringing in a golf pro for a workshop. The idea is to add creditability and excitement to your brand.

Be community minded. Many of your customers have a favorite organization. Consider hosting a charity event and donate part of the profits of sold merchandise that night to the organization’s cause. Ask your customers to send invitations to their customers as well. Collaborating with a non-profit organization will improve your referrals and strengthen your brand. A friend of mine runs a large jewelry store; if a not-for-profit wants to raise money, he’ll provide the food, wine and venue. His brand and his mailing list continue to grow due to his generosity.  

Building your referral base shouldn’t end after the sale. These days you have the tools to keep in touch with your customers online. There are a variety of resources; I suggest you start with LinkedIn. It’s the most professional of social media sites and will increase your credibility..

Remember, referred customers are worth their weight in gold!

 

Lisbeth Calandrino considers herself a ‘game changer’ when it comes to developing serious networking skills and strategies to improve your bottom line. To learn more about Lisbeth, link to her website, www.lisbethcalandrino.com or meet her on social media in all the usual places.