7 ways to generate referrals
Many small businesses rely on referrals to generate new business. We spoke to Heather Townsend, author of ‘The FT Guide To Business Networking’ and ‘The Go-To Expert’, to find out how you can get the most out of referrals.
What do we mean by a referral?
A referral is when someone recommends your services or products to a potential client or customer who’s actively looking for the services of someone like you.
Why are referrals so important to small businesses?
Referrals can be the easiest way to win business for a small business. Essentially referrals are more likely to convert into new business than any other route to market for a small business.
Firstly, the client has declared a perceived need for your service. Secondly because another person is recommending them to you, they are more likely to trust that you can help them. The other person has, in effect, endorsed your credibility to do the work involved. This means you normally don’t have to work so hard to close a lead that has come via referral as opposed to a lead which has come from a telemarketing campaign.
How does a referral actually happen?
Many small business owners think that referrals happen because you ask for them, but outside of a structured networking group this might not work.
In fact if you ask for the referral it can be embarrassing and relationship-damaging moment for both parties. A referral happens because someone sees an opportunity. The referrer finds you memorable and they’re satisfied this is a good opportunity for you – you’re credible, and they want to help you by providing the referral.
Where does SERVICE come into all of this?
The SERVICE framework is a referral generation framework which you can use to structure your marketing and/or networking plan, maximising the number of referrals you receive from your marketing activity.
It is no accident that the framework is called SERVICE. After all, if you don’t deliver great service time and time again to your existing clients and customers, you will drastically reduce your ability to generate referrals.
SERVICE stands for specific, extraordinary client service, relationships, visibility, initiative, collaboration and educate.
Many businesses make the mistake of telling people that they can be all things to all people. Unfortunately this will limit your ability to be referred. The people who are more memorable and more referable will be very specific about the type of work they do and who they do it for.
Have a niche or focus on just one particular type of client when you network. After all, if you think back to how people make a referral, the person giving the referral will put their own credibility on the line when they give a referral. Therefore, it makes sense to recommend the person who you know is best suited to the work. These are the people who are typically either the expert or are known for this type of work, i.e. they are specific about the type of work they do and who they do it for.
Extraordinary client service
So many businesses want ‘word of mouth’ business. However, these days delivering a good service is expected, if not the norm. If you want to get people talking about your business to others you need to deliver either bad service or extraordinary client service.
Luckily extraordinary client service can be delivered very cheaply with a little bit of forethought. For example, do you keep umbrellas in your office to walk your clients to their cars when it is raining? Do you send handwritten thank you cards when a client places a big order? Do you phone ahead when a client is due to visit to get their hot drink order? Normally extraordinary client service is defined by being very personalised, thoughtful and valuable to the client. It is not a one-size-fits-all approach.
As the saying goes, people buy from people. The company you keep will have a huge impact on the number of referrals you can generate via your network. Ideally you want to make sure you have a strong and trusting relationship with people who can and will regularly refer you to your ideal client. These are often called ‘introducers’, but can often be your own clients.
Before someone will give you a referral they need to recall you and realise that you are the best person for the referral. This means you need to keep in touch with the people who matter – your introducers and existing clients. To remain consistently visible means having processes and systems which help you stay in touch. This could be through regularly posting on social media, frequent phone calls or face-to-face meetings, helpful emails etc.
You need to work proactively in order to generate referrals. This means putting in place a networking routine and plan to maximise how you can generate more referrals using the SERVICE framework. It means being alert to opportunities to refer other people. After all, if you refer someone they are more likely to refer you back.
Proactively get in contact with people via LinkedIn or ask for an introduction. If you expect your sales team to network their way to more business, what are you doing to set the expectation they will deliver on their networking plan? For example, are you sitting down with them regularly to talk about their key relationships and next steps for those relationships?
There will be other non-competing businesses out there who have a similar ideal client to you. Collaboration is all about how you can join forces to go to market together. This could be as simple as guest-blogging for each other. The most successful collaborations are built on a bedrock of mutual trust and closely-aligned purpose and values.
Referrals don’t just happen. You need to educate your network as to the type of clients you want. This education can happen informally through the type of content you create and share, the company you keep or the types of conversations you have with people. Or this can happen far more formally when you sit down and discuss with your network exactly what type of clients you want and how they can spot them for you.
Reliably generating referrals means delivering a consistent level of activity when it comes to networking and keeping in touch with your introducers and clients. By using SERVICE, you can make sure you are maximising your ability to get referred to the right type of clients – week in, week out.
About Heather Townsend