Referrals: The Secret to Building a Better Business Faster
Ask successful small business owners where their best customers come from and many will say the same thing: someone told them about us. A referral arrives with built-in trust, costs little and usually converts better than a cold lead. Yet most businesses leave referrals to chance.
Why Referrals Work
People trust recommendations from friends, colleagues and other professionals more than they trust advertising. A referred prospect has already heard something good before the first conversation, so the sale is easier, price objections are fewer and the relationship often lasts longer.
Deliver First, Then Ask
Referrals are earned by doing excellent work. Before you try to build a referral program, make sure your service is dependable, you communicate clearly and you fix problems quickly. Customers will not put their own reputation behind you otherwise.
Make Asking a Habit
- Ask at the right moment. The best time is right after you have delivered a result and the customer is pleased.
- Be specific. Rather than "know anyone who needs us?" try describing the kind of customer you serve best, such as "owners of small restaurants who are outgrowing their bookkeeping."
- Make it easy. Give happy customers a short note, a card or a link they can pass along.
- Follow up. Thank the person who referred someone, and let them know the outcome when appropriate.
Build Referral Partnerships
Other professionals who serve your customers, such as attorneys, bankers, insurance agents and consultants, are natural referral partners. Offer to refer business to them in return, and keep it genuine. Do not offer payment for referrals before checking the rules that apply to your field. Some professions restrict referral fees, and fees can create problems with clients.
Say Thank You
A handwritten note or a small gift is usually enough. If you offer discounts or rewards, keep them modest and legal. Business gifts have tax limits, so ask us before you plan an elaborate program.
Track Your Sources
Record where every new customer comes from. You will learn who your best referrers are and can invest more time in those relationships.
Keep Your Network Warm
Stay in touch with past customers through newsletters, check-in calls or events. People refer businesses they remember.
Want to talk about growing your business? Reach out to our firm and we will be glad to help.
This article is general information, not tax, legal or investment advice for your specific situation.